Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 23, 2023

AI Summary. Evidence presented here challenges the widely accepted view that deindustrialization drove the postwar decline in U.S. male labor force participation, and suggests the manufacturing job losses tied to China's entry into the World Trade Organization were temporary rather than lasting.

Nicholas Eberstadt and Peter Van Ness National Affairs
Date Posted:
Is Database:
Database

Nicholas Eberstadt and Peter Van Ness @AEIecon find significant variation in labor force participation across metropolitan areas. Notably, they find no correlation between local LFP and the change in manufacturing jobs’ share of employment since 2000.

Did deindustrialization really drive the long-term decline in male labor force participation?

Core argument: The chart challenges the widely accepted view, held on both the left and the right, that deindustrialization drove down post-war labor force participation rates among American men.

For many years, a stylized fact floating in the economic policy ether (on both the left and the right) has been the now widely accepted notion that deindustrialization has driven down post-war LFPRs for American men. The figure above squarely challenges that assumption. Less ephemerally, careful studies by David Autor of the Massachusetts Institute of Technology and his colleagues have detailed the devastating impact of the "China shock" — the shift in worldwide trade patterns that followed China's accession into the World Trade Organization in 2001 — on the U.S. manufacturing sector. That immediate shock was, alas, very real, but our chart suggests it was also temporary. This figure, we believe, should be taken as an invitation to reexamine a matter many scholars and policymakers consider settled.

Takeaways by Macro Roundup® AI

  1. The chart challenges the widely accepted view, held on both the left and the right, that deindustrialization drove down post-war labor force participation rates among American men.
  2. David Autor of the Massachusetts Institute of Technology and his colleagues have detailed the devastating impact of the "China shock" on U.S. manufacturing following China's 2001 accession to the World Trade Organization.
  3. The chart suggests the China shock's impact on U.S. manufacturing was real but temporary, and is offered as an invitation to reexamine a matter many scholars and policymakers consider settled.

AI Summary. France's president defended both his unpopular pension reform and his decision to enact it without a parliamentary vote, calling for a return to calm and renewed engagement with labor unions and willing political parties amid nightly protests. An IFOP poll puts his approval at 28%, down 4 percentage points over the past month.

Leila Abboud Financial Times
Date Posted:

Though not yet at the scale of the 2018 gilets jaunes protest, France is facing widespread protest after President Macron pushed through an unpopular pension reform without a parliamentary vote. @FinancialTimes

Though not yet at the scale of the 2018 gilets jaunes protest, France is facing widespread protest after President Macron...

Can a leader defend pension reform passed without a parliamentary vote?

Core argument: Macron's approval rating fell 4 percentage points over the past month to 28%, according to an IFOP poll, its lowest level since the gilets jaunes crisis.

In his first public statement since ramming through his unpopular pensions reform without a parliamentary vote, Macron defended both the policy and the method and tried to calm public anger that has sparked spontaneous nightly protests from Paris to Rennes. “We must move forward,” he said in a televised interview on Wednesday. “We have to restore calm and rebuild a parliamentary and reform agenda by re-engaging with labor unions and any political parties who are ready to do so.” Macron’s approval ratings have fallen 4 percentage points in the past month to 28%, according to an IFOP poll, their lowest since the gilets jaunes crisis.

Takeaways by Macro Roundup® AI

  1. Macron's approval rating fell 4 percentage points over the past month to 28%, according to an IFOP poll, its lowest level since the gilets jaunes crisis.
  2. Macron called for restoring calm and rebuilding a parliamentary and reform agenda by re-engaging with labor unions and willing political parties, as spontaneous nightly protests ran from Paris to Rennes.

AI Summary. Strains in the $5.6tn US commercial real estate loan market have deepened as Federal Reserve rate increases raise borrowing costs and weaken property valuations. Small and medium-sized banks hold about 70% of these loans, which account for 43% of small banks' total lending versus 13% at the largest banks.

Jennifer Hughes, Harriet Clarfelt and Joshua Chaffin Financial Times
Date Posted:

Commercial property loans are an increasing risk for American banks with the stress falling on smaller banks, commercial real estate lending makes up 43% of small banks total lending versus 13% for large banks. @FinancialTimes

Are smaller banks more exposed to commercial real estate loan strains?

Core argument: Small and medium-sized US banks account for about 70% of the $5.6tn commercial real estate loan market, according to JPMorgan analysts, and most of these loans remain on banks' books rather than being securitized.

Strains in the $5.6tn market for commercial real estate (CRE) loans have deepened in recent months as the Federal Reserve’s year-long series of interest rate rises leads to sharply higher borrowing costs and weakening property valuations. Thousands of small and medium-sized banks that make up the bulk of US lenders account for about 70 per cent of so-called CRE loans, according to JPMorgan analysts. Most of the products are not repackaged for the asset-backed securitization markets so remain on banks’ books. CRE loans make up 43 per cent of small banks’ total lending, against just 13 per cent for the biggest banks. About 17 per cent of office loans are held in CMBS, according to Goldman Sachs, making the market joint-top funder alongside regional and local banks.

Takeaways by Macro Roundup® AI

  1. Small and medium-sized US banks account for about 70% of the $5.6tn commercial real estate loan market, according to JPMorgan analysts, and most of these loans remain on banks' books rather than being securitized.
  2. CRE loans make up 43% of small banks' total lending versus 13% at the biggest banks, as the Federal Reserve's year-long series of rate rises drives up borrowing costs and weakens property valuations.
  3. Goldman Sachs estimates that about 17% of office loans are held in commercial mortgage-backed securities, making that market a joint-top funder alongside regional and local banks.

AI Summary. North American trade in goods and services has quadrupled in nominal value since the North American Free Trade Agreement took effect, exceeding $7tn, or roughly 30% of GDP. Rising US-China tensions, pandemic-era supply chain disruptions, and US industrial subsidies for electric vehicles and clean energy are shifting production toward North America, with spillovers into Canada and Mexico.

Economist Staff The Economist
Date Posted:

North American trade in goods and services has quadrupled in nominal value since the North American Free Trade Agreement went into force in 1994. @TheEconomist argues that as the US pulls away from China, it needs its neighbors more than ever.

Are trade tensions and subsidies shifting production toward North America?

Core argument: North America's trade in goods and services has quadrupled in nominal value since NAFTA took effect in 1994, reaching more than $7trn, or roughly 30% of GDP.

North America's trade in goods and services has quadrupled in nominal value since the North American Free Trade Agreement (NAFTA) went into force in 1994, to more than $7trn, or roughly 30% of GDP. As tensions between the United States and China increase, companies that had come to rely on China for manufacturing are shifting to other bases. Production snafus during the covid-19 pandemic illustrated the fragility of globally dispersed supply chains. And the embrace by President Joe Biden’s administration of industrial policy, fueled by generous subsidies for electric vehicles (EVs) and clean energy, has super-charged investment in the United States. That inevitably is spilling over into Canada and Mexico.

Takeaways by Macro Roundup® AI

  1. North America's trade in goods and services has quadrupled in nominal value since NAFTA took effect in 1994, reaching more than $7trn, or roughly 30% of GDP.
  2. Rising U.S.-China tensions are pushing companies that had relied on China for manufacturing to shift to other production bases, while covid-19 production snafus illustrated the fragility of globally dispersed supply chains.
  3. The Biden administration's embrace of industrial policy, fueled by generous subsidies for electric vehicles and clean energy, has super-charged investment in the United States, spilling over into Canada and Mexico.

AI Summary. An index scoring 60,000 U.S. survey respondents from 0 to 100 on more than 50 policy questions finds that those who give the conservative or liberal answer more than 75% of the time backed their side's presidential candidate by margins above 98%. Voters below that consistency threshold shift between candidates on a sliding scale according to their policy views.

Patrick Ruffini The Intersection
Date Posted:

Citing data from Echelon Insights @PatrickRuffini argues political polarization is largely a white phenomenon particularly pronounced across college graduates and non-college republicans.

How closely do policy consistency levels predict presidential vote choice?

Core argument: Voters who gave the conservative or liberal answer on more than 75% of policy questions backed Trump or Biden in 2020 by margins exceeding 98%, a threshold above which they are not persuadable.

Here, we’re measuring policy views on a granular 0-100 scale based on how people answered more than 50 different policy questions on the 2020 CES. A score of 100 means that one gave the most conservative possible answer on all questions, and a score of zero would mean the same thing for the most liberal possible answer. The index itself was calibrated to reflect a rough 50-50 balance between right- and left-leaning voters, reflecting the reality of a closely divided politics. The original questions selected by the academic team behind the CES tended to yield more liberal-leaning responses. In spite of that, the CES is a very good survey for this kind of analysis, with 60,000 interviews that allow for robust subgroup analysis. Another way to boil this down is to bucket people into different ideological camps based on a 75-percent cutoff for ideological consistency. So, giving the conservative or liberal answer more than 75 percent of the time places you in each of those camps. Otherwise, you’re in a non-ideological middle ground. The 75 percent cutoff is an important one. Above we find Assad-like margins for Donald Trump or Joe Biden in 2020 of more than 98 percent. If you’re above this threshold, you’re not persuadable in the slightest. In the middle, your vote is basically up-for-grabs, progressing from one candidate to other in sliding scale fashion according to your policy views.

Takeaways by Macro Roundup® AI

  1. Voters who gave the conservative or liberal answer on more than 75% of policy questions backed Trump or Biden in 2020 by margins exceeding 98%, a threshold above which they are not persuadable.
  2. The analysis scores policy views on a 0–100 scale built from more than 50 policy questions in the 2020 CES, whose 60,000 interviews allow robust subgroup analysis.
  3. Voters below the 75% ideological-consistency threshold fall into a non-ideological middle ground whose votes shift between candidates on a sliding scale according to policy views.

Friday, March 24, 2023

AI Summary. Foreign demand for US bonds remained strong on a trailing four-quarter basis, with mark-to-market losses on low-yielding bonds not appearing to impede total inflows, though official demand from foreign central banks and sovereign wealth funds fell and shifted toward agency debt. Overall demand for US assets tailed off faster than the goods deficit, a potential source of dollar weakness.

Brad Setser @Brad_Setser
Date Posted:

.@Brad_Setser notes that in 2022 foreign demand for American Treasury and Agency bonds was strong, though official demand fell off in Q4.

Is foreign demand for US bonds falling faster than the goods deficit?

Core argument: Brad Setser finds that foreign demand for "safe" U.S. bonds remained strong on a trailing four-quarter basis through full-year 2022, with mark-to-market losses on low-yielding bonds not impeding total foreign inflows, since new inflows earn the higher rate.

On a trailing 4q basis (so for the full year 2022) foreign demand for "safe" US bonds remained strong ... Bondmageddon (the mark to market losses on low yielding bonds) didn't seem to impede total foreign demand for US bonds (new inflows get the new higher rate.) Official demand (from foreign central banks and SWFs) did fall off in 2022 -- and clearly shifted toward Agencies (cough, China) But foreign demand for US bonds decoupled from reserve growth ... and that is reflected on the US side of the global data as well. Overall foreign demand for US bonds (which has been surprisingly strong in 2022 when judged relative to global reserve growth) from both public and private sources tailed off in q4 as well. It does seem that demand for US assets fell a bit faster than the goods deficit in q4 ... so a potential source of dollar weakness (then) is in the data.

Takeaways by Macro Roundup® AI

  1. Brad Setser finds that foreign demand for "safe" U.S. bonds remained strong on a trailing four-quarter basis through full-year 2022, with mark-to-market losses on low-yielding bonds not impeding total foreign inflows, since new inflows earn the higher rate.
  2. Official demand from foreign central banks and sovereign wealth funds fell in 2022 and shifted toward U.S. Agency bonds, with China cited, while overall foreign bond demand decoupled from reserve growth.
  3. Foreign demand for U.S. bonds from both public and private sources tailed off in the fourth quarter, falling somewhat faster than the goods deficit, which Setser reads as a potential source of dollar weakness visible in the data.

AI Summary. Historical comparisons of bank stock performance with the S&P 500 show that when banks fall badly relative to the rest of the market, the broader market tends to decline as well, since trouble at banks makes it harder for other firms to profit.

John Authers Bloomberg
Date Posted:

.@johnauthers notes declines in the KBW Bank index are historically associated with broader market declines and argues that “the combination of deeply troubled banks and strong performance for the rest of the stock market cannot persist much longer.”

Does bank stock weakness relative to the market signal broader declines?

Core argument: A log-scale chart of bank shares against the S&P 500 shows that when banks fall badly relative to the rest of the market, the broader market tends to decline as well.

The following chart, from the terminal, shows banks’ performance on one axis, and the S&P 500 on the other, both on a log scale. When banks fall badly relative to everyone else, the broader market tends to decline, as I’ve tried to mark with the colored rectangles. That’s because banks matter to the economy. When they’re in trouble, it’s much harder for anyone else to make a profit. So how to justify the continued strength of the market while bank investors are so obviously worried? Maybe there’s hope for a bailout in some form that will hurt banks’ shareholders but rescue everyone else. That’s not outlandish. Or possibly, everyone else thinks that the investors are unnecessarily panicking — in which case we should expect a banking rebound pretty quickly.

Takeaways by Macro Roundup® AI

  1. A log-scale chart of bank shares against the S&P 500 shows that when banks fall badly relative to the rest of the market, the broader market tends to decline as well.
  2. Banks matter to the economy because when they are in trouble it becomes much harder for anyone else to make a profit.
  3. Continued market strength alongside worried bank investors could reflect hope for a bailout that hurts bank shareholders while rescuing everyone else, or a view that bank investors are panicking unnecessarily, which would imply a quick banking rebound.

AI Summary. Amid bank stress, corporate bond issuance stalled, with investment-grade sales of $59.9bn versus a five-year monthly average of $179bn and junk-bond sales of about $5bn versus an average of $24bn. Goldman Sachs' base case is that tighter lending standards will subtract 0.25 to 0.5 percentage points from US GDP growth.

Jack Pitcher Wall Street Journal
Date Posted:

Capital markets have been closed since the SVB failure with the highest rated borrowers issuing debt at only 33% of the 5-year avg for March. Goldman Sachs estimates that tighter lending standards will reduce US growth by 25 to 50 basis points in 2023.

How much does bank stress reduce corporate borrowing and growth?

Core argument: No investment-grade-rated company sold new bonds over the seven business days from March 9 through March 17, the first week in March without a new high-grade bond sale since 2013, following Silicon Valley Bank's collapse.

The capital markets have been on ice since the collapse of Silicon Valley Bank two weeks ago. No companies with investment-grade credit ratings sold new bonds over the seven business days from March 9 through March 17, the first week in March without a new high-grade bond sale since 2013. The market for new junk-bond sales has largely stalled this month. Those with the highest ratings have sold $59.9 billion in new bonds this month, compared with March’s five-year average of $179 billion. Companies have raised some $5 billion of junk bonds this month versus the five-year average of $24 billion. In the base case for Goldman Sachs Group Inc., tighter lending standards will subtract one-quarter to one-half of a percentage point from U.S. GDP growth in 2023, equivalent to the impact of Fed rate increases of the same size.

Takeaways by Macro Roundup® AI

  1. No investment-grade-rated company sold new bonds over the seven business days from March 9 through March 17, the first week in March without a new high-grade bond sale since 2013, following Silicon Valley Bank's collapse.
  2. Highest-rated companies sold $59.9 billion of new bonds this month against March's five-year average of $179 billion, while junk-bond issuance reached roughly $5 billion versus a $24 billion five-year average.
  3. Goldman Sachs Group's base case holds that tighter lending standards will subtract one-quarter to one-half of a percentage point from U.S. GDP growth in 2023, equivalent to the impact of Fed rate increases of the same size.

AI Summary. A randomized study of a two-year unconditional monthly cash transfer to below-subsistence households in Barcelona, averaging about €500 ($792 in purchasing-power terms) or nearly 50% of the national minimum wage, estimates households were 14% less likely to have a member working and main recipients 20% less likely, with effects persisting at least six months after the final payment.

Timo Verlaat, Federico Todeschini and Xavier Ramos Institute of Labor Economics
Date Posted:
Is Database:
Database

A Spanish antipoverty program that gave recipients a cash transfer equivalent to almost 50% of the national minimum wage had strong negative labor market effects, with primary recipients 20% less likely to work relative to the control group. @iza_bonn

Does unconditional cash support reduce employment among poor households?

Core argument: Households receiving an unconditional monthly cash transfer in Barcelona were 14 percent less likely to have at least one member working after two years than control households, and main recipients were 20 percent less likely to work.

In this paper, we studied the employment effects of an antipoverty program that does not include any such conditions. The two-year program, implemented in Barcelona (Spain), consisted of a monthly cash transfer to households with income below the subsistence level. The benefit level depended on the household income, size, and composition. On average, households received roughly e500 ($792 PPP) per month, equivalent to nearly 50 percent of the national minimum wage. Although the benefit was household-based, transfers were made to the account of a designated household member, the main recipient. Our findings for overall impacts can be summarized in four parts. First, we find strong evidence for sizeable negative labor supply effects. After two years, households assigned to the cash transfer were 14 percent less likely to have at least one member working compared to households assigned to the control group; main recipients were 20 percent less likely to work. Second, negative employment effects persisted until at least six months after the last payment. Third, we find tentative evidence that effects are mainly driven by households with care responsibilities. Fourth, there is no evidence of effects on social participation and education-related activities.

Takeaways by Macro Roundup® AI

  1. Households receiving an unconditional monthly cash transfer in Barcelona were 14 percent less likely to have at least one member working after two years than control households, and main recipients were 20 percent less likely to work.
  2. The Barcelona program paid roughly €500 ($792 PPP) per month on average to households with income below the subsistence level, equivalent to nearly 50 percent of Spain's national minimum wage, with benefits scaled to household income, size, and composition.
  3. Negative employment effects of the two-year transfer persisted until at least six months after the final payment, with tentative evidence that effects were mainly driven by households with care responsibilities and no evidence of effects on social participation or education-related activities.

AI Summary. China's demographic path trails Japan's by roughly 15–20 years: China's working-age population began falling in 2015 versus 1995 in Japan, and its total population began declining in 2022 versus 2008 in Japan. Analysts note China's current population structure resembles Japan's around 1990, when Japan entered a long-term decline.

Pak Yiu, Grace Li, Ck Tan and Mitsuro Obe Nikkei Asia
Date Posted:

.@NikkeiAsia notes demographic parallels between China and Japan. Japan’s population peaked in 2008, relative to 2022 in China.

Does China's aging population mirror Japan's path toward long-term decline?

Core argument: Experts place China 15–20 years behind Japan in demographic maturation: China's working-age population began falling in 2015 versus 1995 in Japan, and its total population began declining in 2022 versus 2008 in Japan.

Experts point out a lag of only 15-20 years between Japan and China in terms of demographic maturation: the working-age population started falling in 2015 in China vs. in 1995 in Japan; the population decline began in 2022 in China vs. 2008 in Japan. At the time the population began moving toward decline, the median age of the Japanese population was 37, the same median age as China's population in 2020. "China's population structure [now] is similar to Japan's around 1990, when Japan entered a long-term decline," points out Chi Hung Kwan, senior fellow at Nomura Institute of Capital Markets Research.

Takeaways by Macro Roundup® AI

  1. Experts place China 15–20 years behind Japan in demographic maturation: China's working-age population began falling in 2015 versus 1995 in Japan, and its total population began declining in 2022 versus 2008 in Japan.
  2. China's median age reached 37 in 2020, the same median age Japan had when its population began moving toward decline.
  3. Chi Hung Kwan, senior fellow at Nomura Institute of Capital Markets Research, says China's population structure resembles Japan's around 1990, when Japan entered a long-term decline.

AI Summary. In continental Europe millennials have drifted gradually rightward like earlier generations, but in the UK, US, Canada, Australia and New Zealand they have not, which the author argues points to cultural rather than purely economic disillusionment. Younger adults are now far more pro-immigration and more liberal on LGBT issues than their elders.

John Burn Murdoch Financial Times
Date Posted:

.@jburnmurdoch argues the leftward swing of Anglophone millennials relative to their peers in other advanced economies suggest culture war issues will only benefit the right in the short term.

Why have millennials in English-speaking countries not shifted rightward with age?

Core argument: Millennials in continental Europe continue to drift gradually rightward like prior generations, while those in the UK, US, Canada, Australia and New Zealand have veered off that path, which the author calls a smoking gun.

Across continental Europe, millennials continue to follow their ancestors gradually rightward, but from the UK and US to Canada, Australia and New Zealand, they have veered away from the traditional path. This is a smoking gun. Continental multi-party systems allow voters to switch their allegiances away from anti-immigrant parties while still staying within the right or leftwing bloc in a way that the predominantly two-party Anglosphere system does not. If millennials were being alienated solely by economic injustice, we might see the same desertion of the right in Europe as in the English-speaking world. A growing cultural disillusionment makes more sense. In 2009, views on immigration were not delineated according to party or age divides. But 10 years and several culture battles later, younger adults are now far more pro-immigration than their elders, and those on the left are far less anti-immigration than the right. The same is true with attitudes to LGBT issues, where a divide between progressives and conservatives now neatly maps on to age. In both cases, conservatives successfully drove a wedge between one generation and the rest — but the cohort they discarded is growing steadily larger.

Takeaways by Macro Roundup® AI

  1. Millennials in continental Europe continue to drift gradually rightward like prior generations, while those in the UK, US, Canada, Australia and New Zealand have veered off that path, which the author calls a smoking gun.
  2. Continental multi-party systems let voters shift away from anti-immigrant parties while remaining within the right or left bloc, an option the predominantly two-party Anglosphere system does not offer.
  3. Views on immigration were not divided by party or age in 2009, but a decade and several culture battles later younger adults are far more pro-immigration than their elders, with the same pattern on LGBT issues.

AI Summary. A Wall Street Journal-NORC poll found 44% of Americans say their finances are in worse condition than they expected at this stage of life, and more than a third are not at all satisfied with how they are getting along financially. Fewer than 3 in 10 said people like them have a good chance of improving their standard of living.

Janet Adamy Wall Street Journal
Date Posted:

In a recent @WSJ poll, 78% of adults said they don’t feel confident that their kid’s generation will be better off than they had been, the highest share since the survey began asking the question in 1990.

Do most Americans doubt their finances and their children's prospects?

Core argument: A plurality of respondents, 44%, in the WSJ-NORC poll of 1,019 adults said their finances are in worse condition than they expected for this stage in life.

The WSJ-NORC poll surveyed 1,019 adults from March 1 to 13, largely before the collapse of Silicon Valley Bank and subsequent turmoil in the financial industry. A plurality of respondents, 44%, said their finances are in worse condition than they expected for this stage in life, and more than a third said they are not at all satisfied with how they are getting along financially. Fewer than 3 in 10 agreed that people like them and their family have a good chance of improving their standard of living. For more than three decades, NORC has asked Americans whether life for their children’s generation will be better than it has been for their own using its General Social Survey. White respondents were more likely to say they are not confident than Black and Hispanic respondents.

Takeaways by Macro Roundup® AI

  1. A plurality of respondents, 44%, in the WSJ-NORC poll of 1,019 adults said their finances are in worse condition than they expected for this stage in life.
  2. Fewer than 3 in 10 respondents agreed that people like them and their family have a good chance of improving their standard of living, and more than a third said they are not at all satisfied with how they are getting along financially.
  3. White respondents in the WSJ-NORC poll, conducted March 1 to 13 largely before the collapse of Silicon Valley Bank, were more likely than Black and Hispanic respondents to say they are not confident about their children's generation.

AI Summary. A study of 394,378 U.S. adults in an online personality and ability assessment project found lower annual cognitive ability scores over 13 years, across education, gender, and age groups. The decline in scores was steeper among those without a four-year college degree.

Elizabeth Dworak, William Revelle and David Condon Intelligence
Date Posted:

Evidence from an online personality test suggests that the Flynn effect reversed in the United States between 2006-2018 for all levels of education attainment, with the most significant decline for individuals without a college degree.

Are U.S. adult cognitive ability scores declining over time?

Core argument: Across 394,378 U.S. adults in the SAPA Project from 2006 to 2018, composite cognitive ability scores measured by 35 items were lower each year regardless of education, gender, and age.

Thirteen years of cross-sectional data from a subsample of adults (n = 394,378) were obtained from the Synthetic Aperture Personality Assessment Project (SAPA Project) to examine if cognitive ability scores changed within the United States from 2006 to 2018.  Regardless of education, gender, and age, lower annual scores were observed for composite cognitive ability measured by 35 items, and the matrix reasoning and letter and number series scores measured across the 13 years of assessment. A reverse Flynn effect was also present across all levels of educational attainment, with the rate of decreasing scores being steeper for those with less than a 4-year college degree.

Takeaways by Macro Roundup® AI

  1. Across 394,378 U.S. adults in the SAPA Project from 2006 to 2018, composite cognitive ability scores measured by 35 items were lower each year regardless of education, gender, and age.
  2. Matrix reasoning and letter and number series scores also declined across the 13 years of SAPA Project assessment.
  3. A reverse Flynn effect was present at all levels of educational attainment, with steeper rates of decline among adults with less than a 4-year college degree.