Median Wealth in the U. S. is Down 20% from 1984

Via Real-World Economics Review Blog

A NYT article reported on a study from Russell Sage reporting that median household wealth 36 percent lower in 2013 than 2003. While this is disturbing, an even more striking finding from the study is that median wealth is down by around 20 percent from 1984. Continue reading–>

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Upward Mobility Eludes Many Children in the Southeast

There are few goals in American society which exceed the goal of upward mobility. A study by the Equality of Opportunity Project examined absolute upward mobility in nearly counties in the U.S.

Absolute mobility measures where a typical child who starts out in a family in the bottom half of the income distribution will end up in the income distribution among people his or her age when he or she grows up.

The following map depicts the outcomes, where darker counties have less mobility, and lighter counties have more:

Absolute Mobility in the US

Notice the lower economic mobility associated in Southeastern parts of the U.S. Children from families in the lower socio-economic groups of the income distribution in the Southeast are, on average, staying in those lower socio-economic status groups. 

Reference

Kiersz, Andy. (2014). The American Dream Is a Myth In These Parts of America. Equality of Opportunity Project.

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Dual Enrolled Students are More Likely than Their Peers to Finish High School, Enter College and Complete a Degree

Research shows that students who participate in dual enrollment are more likely than their peers to finish high school, enter college and complete a degree. This means dual enrollment can greatly benefit students in rural areas, which report lower college-going and postsecondary attainment rates than other locales.

Reference

Michael Andrew Koicich, Texas Tech University, The Effects of Rurality on College Access and Choice, presented at AERA 2014 Annual Meeting, April 4, 2014; National Student Clearinghouse Research Center, National College Progression Rates: For high schools participating in the National Student Clearinghouse Student Tracker Service,
October 15, 2013; Soo-yong Byun, Judith L. Meece and Matthew J. Irvin, Rural-Nonrural Disparities in Postsecondary Educational Attainment Revisited, American Educational Research Journal, June 2012, Vol. 49, No. 3, pp. 412-437; Southern Rural Development Center, “College degree gap widens between cities and rural
America,” n.d.; National Center on Education Statistics, Status of Education in Rural America, “Indicator 2.7, College enrollment rates,” June 2007.

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Evidence-Based Advantages of Career-Technical Education Dual Enrollment Programs

An Education Commission of the States report identifies the evidence-based advantages of CTE dual enrollment:

Research makes it clear that CTE dual enrollment courses improve outcomes for traditionally underserved students. Specifically, studies find that CTE dual enrollment students are more likely to:

Earn a high school diploma. One study indicates graduation rates among CTE dual enrollment students were higher than their non-dually-enrolled peers even after controlling for test scores.

Enroll in a bachelor’s degree program. One study found that CTE dual enrollment course completers in Florida were slightly more likely than all dually-enrolled students to enroll in a four-year institution – 7.7 percent for all dually-enrolled students versus 8.6 percent for CTE dually-enrolled students.

Enroll in college full-time. Again, one study found CTE dual enrollment students slightly more likely than dual enrollment students generally to enroll in college full-time. This is important given the body of research suggesting that enrolling in college full-time increases a student’s chances of college completion

Reference

Zinth, J. D. (2014).Dual Enrollment: A Strategy for College Completion and Workforce Investment. Education Commission of the States.
Get the report here.

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For-Profit Colleges Dropping Profit Status to Non-Profit Status

Inside Higher Education identifies a new strategic initiative by some for-profit colleges to change their status to non-profit status. Some believe this move is motivated to

  1. Escape the Feds ’90/10 rule’ – - For-profits can get no more than 90 percent of their revenue from federal sources (student financial aid)
  2. Avoid the Obama administration’s proposed “gainful employment” regulations – - All gainful employment programs must pass metrics to continue eligibility in the student financial aid program, including: the estimated annual loan payment of typical graduates does not exceed 20 percent of their discretionary earnings or 8 percent of their total earnings and the default rate for former students does not exceed 30 percent, and
  3. Elude various taxes and regulation, as well as eligibility for state grants and private donations.

Continue reading–>

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Do Pharmacists Buy Bayer? Informed Shoppers and the Brand Premium

The answer appears to be no.

[M]ore informed consumers are less likely to pay extra to buy national brands, with pharmacists choosing them over store brands only 9 percent of the time, compared to 26 percent of the time for the average consumer,  according to Bronnenberg et al. (2014).

Abstract

We estimate the effect of information on consumers’ willingness to pay for national brands in physicallya homogeneous product categories. We measure consumer information using education, occupation, and a survey-based measure of product knowledge. In a detailed case study of headache remedies we find that more informed consumers are less likely to pay extra to buy national brands, with pharmacists choosing them over store brands only 9 percent of the time, compared to 26 percent of the time for the average consumer. In a similar case study of pantry staples such as salt and sugar, we show that chefs devote 12 percentage points less of their purchases to national brands than demographically similar non-chefs. We extend our analysis to cover 50 retail health categories and 241 food and drink categories and use the resulting estimates to fit a stylized model of demand and pricing. The model allows us to quantify the extent to which brand premia result from misinformation, and the way more accurate beliefs would change the division of surplus among manufacturers, retailers, and consumers.

Reference

Bronnenberg, Bart J, et al. (2014). Do Pharmacists Buy Bayer? Informed Shoppers and the Brand Premium. National Bureau of Economic Research. NBER Working Paper No. 20295.

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The Relationship between Educational Assortative Mating and Household Income Inequality

Assortative mating, or homogamy, exists when people choose to mate with persons similar to themselves. What’s the relationship between assortative mating and household income inequality? Eik et al. (2014) examine the relationship.

Abstract

We investigate the pattern of educational assortative mating, its evolution over time, and its impact on household income inequality. To these ends, we use rich data from the U.S. and Norway over the period 1980-2007. We find evidence of positive assortative mating at all levels of education in both countries. However, the time trends vary by the level of education: Among college graduates, assortative mating has been declining over time, whereas low educated are increasingly sorting into internally homogenous marriages. When looking within the group of college educated, we find strong but declining assortative mating by academic major. These findings motivate and guide a decomposition analysis, where we quantify the contribution of various factors to the distribution of household income. We find that educational assortative mating accounts for a non-negligible part of the cross-sectional inequality in household income. However, changes in assortative mating over time barely move the time trends in household income inequality. This is because the decline in assortative mating among the highly educated is offset by an increase in assortative mating among the low educated. By comparison, increases in the returns to education over time generate a considerable rise in household income inequality, but these price effects are partly mitigated by increases in college attendance and completion rates among women.

Reference

Educational Assortative Mating and Household Income Inequality. National Bureau of Economic Research. NBER Working Paper No. 20271

Lasse Eik Educational a, Magne Mogstad, Basit Zafar

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Myers-Briggs is ‘Totally Meaningless’

For all you Myers-Briggs fans I’m sorry but it is totally meaningless. See

Why the Myers-Briggs test is totally meaningless

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Medicare Spending Down, Extending Solvency by Six Years

Medicare as a percent of GDP is now expected to make up 4.6 percent of G.D.P. in 25 years, down from 4.9 percent in last year’s estimate, according to a report published by the Congressional Budget Office. This buys Medicare approximately six more years of solvency in the budget office’s estimate compared with last year. This finding comes right after a report by the Kaiser Family Foundation indicating Medicare is currently spending $1,000 less a person this year than was forecast in 2010.

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Another Debunked Falsehood: No Patient Glut Under ObamaCare

All of us recall the dire predictions that ObamaCare was going to create a crush of pent-up medical demand, resulting in delays in getting needed medical attention.

A new report from Athena Health reaches a different conclusion:

“With the exception of pediatrics, all physician types are seeing lower new patient
visit rates in 2014 compared to 2013.”

Another interesting finding:

“New patients had a lower rate of chronic disease than established patients.”

And finally:

“ACA Coverage expansion appears to be widening a pre-existing gap between states that have elected to pursue Medicaid expansion and those that have not.”

Reference

Sung, Iyue and Gray, Josh. (2014). ACA View: Tracking the Impact of Health Care Reform. Athena Reseach. Athena Health.

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