Society Evidence File

Nov18: New Social Information: Indicators and Surprises
Why Is This Information Valuable?
How to Save Globalization” by Scheve and Slaughter, in Foreign Affairs
“In a series of recent studies we conducted in communities across the United States, we heard the same sentiments from a range of respondents in a variety of circumstances: anxiety and anger about globalization and change that was not related to income alone but more broadly concerned whether Americans can still secure meaningful roles in their families and communities…

“But because the problem goes beyond income inequality, the usual policy solutions are inadequate. It is not enough simply to redistribute income to financially compensate the losers from globalization. Addressing the backlash requires giving all Americans the tools they need to carve out the sense of security and purpose they have lost amid change. That can happen only if the United States completely transforms the way it invests in and builds human capital.”

Unfortunately, defining specific policy changes to implement this strategy, and then successfully implementing them (and overcoming the dogged defense of the status quo by many interest groups, like K12 school districts and higher education institutions) is the hard part…
Strategies for Left Behind Places”, by Hendrickson et al, published by Brookings
Clearly, the policy community in the United States is focused on, and struggling with, how to meet the economic and social challenges that in 2016 gave rise to the Trump presidency.

The 2016 election revealed a dramatic gap between two Americas—one based in large, diverse, thriving metropolitan regions; the other found in more homogeneous small towns and rural areas struggling under the weight of economic stagnation and social decline.”

“This gap between two American geographies came as a shock to many observers….the lion’s share of growth in the last decade has been concentrated—with relatively few exceptions—in a small cohort of urban hubs while the rest of the country has drifted or lost ground…”

“Public policy has done little to halt or even mitigate this trend. Indeed, taken as a whole, the policies of recent decades have almost certainly exacerbated it…Now, the political impacts of these sins of omission and commission are clear.”

“As the country has pulled apart economically is also pulling apart politically…Political parties that once brought voters together across regional lines now focus their appeal on the particular interests and outlook of a single kind of region. In the United States and throughout the West, parties with their principal support in metropolitan areas do battle with parties based in less densely populated areas. …Making matters even worse, these political divisions mirror widening differences between diverse, liberal, internationally minded cities and more homogenous, conservative, and locally focused small towns and rural areas, spawning a new culture war.”

“The crystallization of these dueling political identities has shaken the liberal democratic order in the United States and beyond. Throughout the West, parties representing those who feel that they have lost out stand opposed to parties representing those who have benefitted from the economic and cultural changes of recent decades.”
Work, Skills, Community: Restoring Opportunity for the Working Class”, by Opportunity America, cosponsored by the American Enterprise Institute and the Brookings Institution
Opportunity America is an important joint effort by the United States leading center left and center right Think Tanks to better understand and devise policy solution for better addressing the worsening inequality that has arguably been a critical root cause of many of the nation’s social and political conflicts.

Looking back, it’s clear that we as a nation should have seen the problem coming: the symptoms were stark and alarming.”

Still, for all the attention of the past two years, it isn’t clear that anyone, left or right, understands working-class America. Who makes up the working class today? What exactly is it that ails them? Why, unlike in so many other parts of America, do their fortunes seem to be declining rather than improving? And what can government—state or federal government— do to remedy the collapse in blue-collar communities?”

The authors’ definition of “working class” is: people with at least a high school diploma but less than a four-year college degree living in households between the 20th and 50th income percentiles—roughly $30,000 to $69,000 a year for a household with two adults and one child.”

The report notes that, “We as a nation can and must renew the social contract that once bound us—the promise that if you worked hard and played by the rules, you could get ahead…That promise is no longer true for much of the working class, and we must restore it.”

The report concludes with a long list of policy initiatives that would not worsen the current US federal budget deficit
“Male Earnings, Marriageable Men, And Nonmarital Fertility: Evidence From The Fracking Boom” , by Kearney and Wilson
SURPRISE

“There has been a well-documented retreat from marriage among less educated individuals in the U.S. and non-marital childbearing has become the norm among young mothers and mothers with low levels of education. One hypothesis is that the declining economic position of men in these populations is at least partially responsible for these trends. That leads to the reverse hypothesis that an increase in potential earnings of less-educated men would correspondingly lead to an increase in marriage and a reduction in non-marital births.”

“To investigate this possibility, we empirically exploit the positive economic shock associated with localized “fracking booms” throughout the U.S. in recent decades. We confirm that these localized fracking booms led to increased wages for non-college-educated men…Analysis reveals that in response to local-area fracking production, both marital and non-marital births increase and there is no evidence of an increase in marriage rates. The pattern of results is consistent with positive income effects on births, but no associated increase in marriage.”

In sum, it’s not just the economy. Social values have also changed, perhaps permanently.
How Britain Can Heal Its Ailing Social; Care System”, by Camilla Cavendish in the Financial Times, 10Nov18
A critical question as populations age is the relationship between, and funding of, not just medical and hospital care, but also what is known as “social care”, including assisted living and skilled nursing facilities, and services that enable elderly people to remain in their own homes. When the latter fail, the result is usually an increase in hospitalizations, which reduces the number of beds available for acute care patients.

Every rich country is grappling with how to look after a growing number of elderly people with increasingly complex conditions. It’s no coincidence that two of the nations that are aging most rapidly — Germany and Japan— have pioneered the most comprehensive responses Germany’s mandatory long-term care insurance system was introduced in 1995, when its care system looked about as frayed as England’s does now. The scheme was crafted to ensure that everyone got something, no one got something for nothing and everyone put something in. Workers pay a compulsory levy. Employers contribute half; and the retired pay in full. The government did a deal with voters: you pay more in, but you get more out. The burden is shared and the risk is pooled…”

“Japan introduced a similar system in 2000…The German and Japanese systems are not perfect. Some Germans gripe about care staff but they like the option of using the fund to pay their own relatives to provide care. In Japan, people feel strongly that they don’t want to rely on the state if they can possibly help it and they do worry that the taxes to maintain the fund keep rising as the population ages. But they enjoy the security.”

“No one in those two countries is living with the crippling uncertainty or the sense of unfairness that haunts us here [in the UK].” Or in the US...
Are Millennials Different?” by Kurz et al from the Federal Reserve Bank of New York
SURPRISE

History shows that it is rarely the working class that drives disruptive political change; rather the risk of such change peaks at times when the middle class finds its reality far below its expectations.

For some time there have been questions about the extent to which this applies to Millennials, with some claims that they have different desires that previous generations – e.g., regarding a preference for renting city apartments versus owning homes in a suburb. This study dispels some of those beliefs, and makes clear that many aspiring middle class millennials have found their consumption desires frustrated. This further suggests that his frustration will inevitably find political expression, for example in stronger support for progressive and populist solutions, and in particular to growing calls for a national solution to the problem of high health care cost in the United States.

The authors note that, “relative to members of earlier generations, millennials are more racially diverse, more educated, and more likely to have deferred marriage; these comparisons are continuations of longer-run trends in the population. Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. For debt, millennials hold levels similar to those of Generation X and more than those of the baby boomers. Conditional on their age and other factors [including, critically, their higher levels of student debt], millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.”
Liberal Parents, Radical Children”, by David Brooks, New York Times, 26Nov18
“When I meet someone who runs an organization in a blue state, I often ask: Do you have a generation gap where you work? The answer — whether the person leads a college, a nonprofit, a tech company, an entertainment company or a publication — is generally the same: Yes, and it’s massive.”

“The managers at these places, who are generally 35 and above, are liberals. They vote Democratic and cheer on all the proper causes of the left. But some of the people under 35 are not liberals, but rather are militant progressives. The older people in the organization often have nicknames for the younger set: the Resistance, Al Jazeera, the revolutionaries. The young militants are the ones who stage the protests if someone does something deemed wrong…”

“On the left, the big difference is over meliorism. The older liberals are appalled by President Trump, alarmed by global warming, disgusted by widening income inequality, and so on, but are more likely to believe the structures of society are basically sound. You can make change by voting for the right candidates and passing the right laws. You can change individual minds through education and debate.”

“The militants are more likely to believe that the system itself is rotten and needs to be torn down. We live in a rape culture, with systemic racism and systems of oppression inextricably tied to our institutions. We live in a capitalist society, a neoliberal system of exploitation. A person’s ideology is determined by his or her status in the power structure.”

“Two great belief systems are clashing here. The older liberals tend to be individualistic and meritocratic. A citizen’s job is to be activist, compassionate and egalitarian. Boomers generally think they earned their success through effort and talent.”

“The younger militants tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy. Group identity is what matters. Society is a clash of oppressed and oppressor groups. People who are successful usually got that way through some form of group privilege and a legacy of oppression…”

“I guess the final irony is this: Liberal educated boomers have hogged the spotlight since Woodstock. But now events are driven by the oldsters who fuel Trump and the young wokesters who drive the left. The boomer finally got the top jobs, but feel weak and beleaguered.”
The Opportunity Atlas Mapping the Childhood Roots of Social Mobility”, by Chetty et al
“Economic mobility varies dramatically across the US. This paper introduces a new interactive mapping tool that traces the roots of outcomes such as poverty and incarceration back to the neighbourhoods in which children grew up. Among the insights the data reveal are that children who grow up a few miles apart in families with comparable incomes have very different life outcomes, and that moving in early childhood to a neighbourhood with better outcomes can increase a child’s income by several thousands of dollars later in life.”

The website tool can be found here:
https://www.opportunityatlas.org
What explains America’s mysterious baby bust?”, in The Economist, 24Nov18
Japan and more recently Europe have been experiencing dropping fertility rates for years. American was long thought to be immune to this decline. However, three years of data have now raised serious questions about that belief.“

America’s total fertility rate, which can be thought of as the number of children the average woman will bear, has fallen from 2.12 to 1.77. It is now almost exactly the same as England’s rate, and well below that of France.”

The Economist also notes falls in fertility rates among Hispanics and city dwellers as key drivers of national level results.

This has serious consequences. For any given level of target economic growth, a lower domestic birthrate means that either higher immigration or higher productivity growth will be required to achieve it.
Oct18: New Social Information: Indicators and Surprises
Why Is This Information Valuable?
“Be Afraid? Yes, But Don’t Overdo It” by Adam Garfinkle in The American Interest 29Oct18
Garfinkle provides a succinct summary of seven important sources of rising individual and group uncertainty and fear that are driving other social and political phenomena:

“A technology tsunami that is arguably unprecedented in nature and scope” that is “producing an accelerating cascade of eruptive discontinuities in social life affecting work and the economy more broadly, family structures, and political life.”

“Our politics have grown polarized and shrill, our military wins battles but not wars, and our political elites – of both major parties – have consistently made promises that fell short.”

“Terrorism has rattled us, starting with 9/11 but continuing through lesser forms of murder and mayhem ever since.”

“Broken families produce insecure children; kids who feel emotionally betrayed by those who are supposed to love and protect them often grow into insecure adults, replicating insecurity by often failing to form secure loving bonds.”

“Mean World Syndrome – research has demonstrated that people who watch a lot of commercial television and Hollywood shock flicks come to believe that violence, perversion, and plain evil are as plentiful in real life as they are in mass entertainment fiction.”

“There has been, arguably, too much immigration too fast into the United States to assimilate in a culture whose swoon in collective self-confidence has made local elites feel guilty about demanding assimilation.”

“Finally, since fear is ubiquitous, every civilization has devised ways to manage it. That has typically been accomplished in the context of religious culture. Dangers are easier to cope with when they are seen as something other than completely random and meaningless, when they are integrated into a shared narrative that makes a certain kind of emotional sense. When traditional religious templates erode, as they have in most Western societies in recent times, the frameworks that control the psycho-social impact of fear erode with them. They have been replaced, in a manner of speaking, with the pseudo-religion of the therapeutic, whose obsession with absolute security has only served to make nearly everyone more anxious, not less.”
Well-Being in Metrics and Policy” by Graham, et al
The paper reviews cumulative research findings on the correlates of self-reported well-being.

Findings about China were particularly interesting: “China is perhaps the most successful example of rapid growth and poverty reduction in modern history. GDP per capita increased fourfold between 1990 and 2005, and life expectancy increased from 67 to 73.5 years. Yet life satisfaction fell dramatically, and suicide increased, reaching one of the highest rates in the world. The unhappiest cohorts were educated workers in the private sector, who benefited from the growing economy but suffered from long working hours and lack of sleep and leisure time.”

This is yet another indicator of underlying domestic fragility in China.
“Associations between screen time and lower psychological well-being among children and adolescents: Evidence from a population-based study”, by Twenge and Campbell
This indicator confirms other research that has reached similar conclusions. However, this research is based on a larger sample set than previous studies.

“After 1 hour/day of use, more hours of daily screen time were associated with lower psychological wellbeing, including less curiosity, lower self-control, more distractibility, more difficulty making friends, less emotional stability, being more difficult to care for, and inability to finish tasks. Among 14- to 17-year-olds, high users of screens (7+ h/day vs. low users of 1 h/day) were more than twice as likely to ever have been diagnosed with depression, ever diagnosed with anxiety, treated by a mental health professional (RR 2.22, CI 1.62, 3.03) or have taken medication for a psychological or behavioral issue in the last 12 months.

“Moderate use of screens (4 h/day) was also associated with lower psychological well-being.”

“Non-users and low users of screens generally did not differ in well-being. Associations between screen time and lower psychological well-being were larger among adolescents than younger children.”

Going forward, the individual and social consequences of intensive personal technology use seem poised to become a much more contentious issue.
California Feudalism: The Squeeze on the Middle Class” by Kotkin and Toplansky from the Center for Demographics and Policy at Chapman University
Kotkin and Toplansky have provided a very thought provoking analysis of the consequences of a particular mix of progressive policies in California.

“California has now taken on an increasingly feudal cast, with a small but growing group of the ultra-rich, a diminishing middle class, and a large, rising segment of the population that is in or near poverty. Indeed, amidst some of the greatest accumulations of wealth in history, California has emerged as a leader in poverty, particularly among its minority and immigrant populations and throughout its interior…

“Yet our state leaders, and too many of our business and civic leaders, are convinced that California, far from being something of a cautionary tale, offers a great “role model” for the rest of the country. The state’s drift towards an ever more unequal, feudalized society, characterized by concentrated property ownership, persistent poverty levels, and demographic stagnation does not seem to concern our Sacramento leadership.”

The authors describe how this situation has developed in California, and what could alter its present course.
The Genetics of University Success” by Smith-Woolley et al, in Scientific Reports, 18Oct18

See also, “What Does Genetic Research Tell Us About Equal Opportunity and Meritocracy?” by Robert Plomin in Quillette on 15Oct18
SURPRISE.

These studies are further indicators of the rapidly accumulating evidence that the impact of genetics on a wide range of life outcomes is significantly larger than previously thought. In the short term, these findings are very much at odds with both conservative and progressive ideologies, and are thus almost certain to be a source of rising conflict. Over the medium term, these genetic findings will also have substantial policy implications in many areas, not the least of which are education, health, and risk management.

“The difference in earnings between high school and university graduates is estimated at $1 million over the course of the lifetime. However, the difference in earnings varies by the type of university attended, as well as achievement at university.”

“Furthermore, the benefits associated with obtaining a university education extend beyond earnings, to include better health and wellbeing, higher rates of employment and even increased life expectancy.”

“Despite this, little is known about the causes and correlates of differences in university-level outcomes, including entrance into university, achievement at university and the quality of university attended. University success, which includes enrolment in and achievement at university, as well as quality of the university, have all been linked to later earnings, health and wellbeing. However, little is known about the causes and correlates of differences in university-level outcomes. Capitalizing on both quantitative and molecular genetic data, we perform the first genetically sensitive investigation of university success with a UK-representative sample of 3,000 genotyped individuals and 3,000 twin pairs.”

“Twin analyses indicate substantial additive genetic influence on university entrance exam achievement (57%), university enrolment (51%), university quality (57%) and university achievement (46%). We find that environmental effects tend to be non-shared, although the shared environment is substantial for university enrolment. Furthermore, using multivariate twin analysis, we show moderate to high genetic correlations between university success variables (0.27–0.76). Analyses using DNA alone also support genetic influence on university success. Indeed, a genome-wide polygenic score, derived from a 2016 genome-wide association study of years of education, predicts up to 5% of the variance in each university success variable”.
“These findings suggest young adults select and modify their educational experiences in part based on their genetic propensities and highlight the potential for DNA-based predictions of real-world outcomes, which will continue to increase in predictive power.”
Beyond Four Walls: A New Era of Life at Home” by Ikea
This report is another indicator of the extent of the social transformation underway in many societies, and in particular suggests further erosion of the family and home as fundamental social units.

“When we talk about what makes a home, we talk about four dimensions that are shared by everyone: space, place, relationships, and things. Five core emotional needs are connected with the home: privacy, security, comfort, ownership, and belonging. Belonging is the need least satisfied by our residential homes. Today, one in three people around the world say there are places they feel more at home than where they live.”
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Sep18: New Social Information: Indicators and Surprises
Why Is This Information Valuable?
Experimental Evidence for Tipping Points in Social Convention” by Centola et al.

The authors study “an artificial system of social conventions in which human subjects interact to establish a new coordination equilibrium. The findings provide direct empirical demonstration
of the existence of a tipping point in the dynamics of changing social conventions.

When minority groups reached the critical mass—that is, the critical group size for initiating social change—they were consistently able to overturn the established behavior…Our theoretical predictions for the size of the critical mass were determined by two parameters: individual memory length (M) and population size (N)…When participants have shorter memories, the size of the critical mass is smaller. Even under the assumption
that people have very long memories, the predicted critical mass size remains well below 50% of the population,
indicating that critical mass dynamics may be possible even in systems with long histories.

Variations in population size were explored computationally were not found to significantly affect the predicted critical mass size.

Over all trials, populations with a critical mass equal to or greater than 25% of the population were significantly more likely to overturn the dominant convention than populations with a committed minority below 25%.”
This paper helps to refine our mental model the drivers of sharp changes in sentiment, expectations, and other forms of conventional wisdom in a range of areas, from economics to social values to politics.

An interesting question to ponder is whether the current environment of information overload, constant stimulation, and incessant demands for our limited attention has effectively shortened our memories, and thus reduced the percentage of people in a population who can trigger substantial change.
How Persistent are the Effects of Sentiment Shocks?” by Benhabib et al from the Federal Reserve Bank of San Francisco.
The economic effects of negative sentiment shocks can persist for up to five years.
What to Do About Africa’s Dangerous Baby Boom” in the Economist.
“THE 21st century, in one way at least, will be African. In 1990 sub-Saharan Africa accounted for 16% of the world’s births. Because African birth rates are so much higher than elsewhere, the proportion has risen to 27% and is expected to hit 37% in 2050. About a decade later, more babies will be born in sub-Saharan Africa than in the whole of Asia, including India and China. These projections by the UN, if correct, are astounding (see article). There is good reason for the world to worry about Africa’s baby boom…The real problem is that too many babies sap economic development and make it harder to lift Africans out of poverty. In the world as a whole, the dependency ratio —the share of people under the age of 20 or older than 64, who are provided for by working-age people—stands at 74:100. In sub-Saharan Africa it is a staggering 129:100.

In stark contrast with most of the world, notably Asia, the number of extremely poor Africans is rising, in part because the highest birth rates are in the poorest parts of the continent.

This has clear implications for future economic migrant flows, and potentially for the emergence of more failed states in Africa, and thus refugee flows.
Workers with Low levels of Education Still Haven’t Recovered for the Great Recession”, by the Brookings Institution

Why Lots of Americans are Sour on the Economy” by Noah Smith, on Bloomberg
Clear implications for the potential social and political implications of another severe economic downturn, such as increased polarization and susceptibility to more extreme political solutions.

Applies to more countries than just the US – e.g., Jeremy Corbyn in the UK, and the rise of more extreme parties on the continent, which is matched by the lack of strong policy prescriptions and attractive political leaders in the center.

Smith notes that many members of the middle and upper middle class are increasingly frustrated, which magnifies the potential for social, political, and economic change.
The Collapse of Civilizations” by Malcolm Wiener, published by the Belfer Center at Harvard’s Kennedy School
The author reviews the historical record and finds five recurring (and often interrelated) causes of civilizational collapse: (1) major episodes of climate change; (2) crisis-induced mass migrations; (3) pandemics; (4) dramatic advances in methods of warfare and transport; and (5) lack of societal resilience and the madness, incompetence, and ignorance of rulers.