Edward Conard

Top Ten New York Times Bestselling Author

  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, March 31, 2023

AI Summary. Three estimation approaches — an accounting exercise on credit extension by banks with under $250bn in assets, a financial conditions model incorporating bank lending standards, and a review of academic literature — imply tighter credit reduces growth by 0.25–0.5pp. The authors accordingly cut their growth forecast by 0.4pp, from 1.5% to 1.1%.

Jan Hatzius Goldman Sachs
Date Posted:

Jan Hatzius @GoldmanSachs thinks the credit contraction increases the odds of a recession inside of the next 12 months to 35%, well below the consensus of 60%.

How much does tighter bank credit reduce growth?

Core argument: The Q4/Q4 growth forecast was reduced by 0.4pp, from 1.5% to 1.1%, to reflect the estimated drag from tighter credit.

We have estimated the impact of tighter credit in three ways. The first is an accounting exercise that makes judgmental assumptions about new credit extension by banks with less than $250bn in assets and suggests a 0.25pp hit to growth. The second is an extension of our financial conditions impulse model that adds a role for bank lending standards and delivers a 0.5pp hit to growth. The third is a review of the academic literature on the effects of declines in both bank stock prices and accounting measures of equity capital on loan growth and GDP, which implies a 0.3-0.5pp hit to growth. On the back of these estimates, we have reduced our Q4/Q4 growth forecast by 0.4pp (from 1.5% to 1.1%).

Takeaways by Macro Roundup® AI

  1. The Q4/Q4 growth forecast was reduced by 0.4pp, from 1.5% to 1.1%, to reflect the estimated drag from tighter credit.
  2. An accounting exercise making judgmental assumptions about new credit extension by banks with less than $250bn in assets suggests a 0.25pp hit to growth.
  3. A financial conditions impulse model extended to include bank lending standards delivers a 0.5pp hit to growth, while a review of academic literature on bank stock prices and equity capital implies a 0.3-0.5pp hit.

AI Summary. Banking stress is argued to tighten credit and produce a harder landing for the real economy, because regional banks are key financiers of small and medium-size businesses and households. Higher public and private debt levels are said to create a "debt trap" in which higher policy rates fuel systemic debt crises that liquidity support cannot resolve.

Nouriel Roubini Project Syndicate
Date Posted:

.@Nouriel argues that that the Fed “must not delude themselves into thinking they can still achieve both price and financial stability.” He concludes, “everyone should be preparing for the coming stagflationary debt crisis.”

.@Nouriel argues that that the Fed “must not delude themselves into thinking they can still achieve both price and financial...

Does banking stress tighten credit enough to produce a harder landing?

Core argument: The credit crunch from banking stress is set to produce a harder landing for the real economy, given regional banks' key role in financing small and medium-size enterprises and households.

The credit crunch caused by today’s banking stress will create a harder landing for the real economy, owing to the key role that regional banks play in financing small and medium-size enterprises and households. Borrowers are facing rising rates – and thus much higher capital costs – on new borrowing and on existing liabilities that have matured and need to be rolled over. But the increase in long-term rates is also leading to massive losses for creditors holding long-duration assets. As a result, the economy is falling into a “debt trap,” with high public deficits and debt causing “fiscal dominance” over monetary policy, and high private debts causing “financial dominance” over monetary and regulatory authorities. In a debt trap, higher policy rates will fuel systemic debt crises that liquidity support will be insufficient to resolve. Since liquidity support cannot prevent this systemic doom loop, everyone should be preparing for the coming stagflationary debt crisis. 

Takeaways by Macro Roundup® AI

  1. The credit crunch from banking stress is set to produce a harder landing for the real economy, given regional banks' key role in financing small and medium-size enterprises and households.
  2. Borrowers face rising rates and higher capital costs on new borrowing and on matured liabilities that must be rolled over, while rising long-term rates inflict massive losses on creditors holding long-duration assets.
  3. The economy is falling into a debt trap in which high public deficits and debt create fiscal dominance over monetary policy and high private debt creates financial dominance, so higher policy rates fuel systemic debt crises that liquidity support cannot resolve.

AI Summary. Borrowers benefit from inflation eroding the real value of debt but face surging debt-service costs, with those that did not lengthen the maturity of their obligations during the era of low rates confronting an interest rate cliff. If higher debt service is absorbed without widespread bank crises, the one-off price-level shock opens fiscal space for public investment.

Adam Tooze Financial Times
Date Posted:

Citing the 20% fall in US’s ratio of the market value of public debt to nominal GDP, @adam_tooze argues we are living through one of the “most powerful episodes of financial repression ever.”

Citing the 20% fall in US’s ratio of the market value of public debt to nominal GDP, @adam_tooze argues we are living...

Does inflation eroding debt create fiscal space for public investment?

Core argument: The systemic question of the trillion-dollar rebalancing is how financial institutions are carried through it, and that is what will define this historical episode.

The truly systemic question is how we see our financial institutions through this giant trillion-dollar rebalancing. That is what will define this historical episode. Though debtors benefit from inflation and the revaluation of debts, they need to brace for the surging costs of debt service. Those who did not stretch the maturity of their obligations in the era of low rates now face an interest rate cliff. But if we can adjust to higher debt service and avoid a rash of bank crises, the one-off shock to the price level opens up unexpected fiscal space. We must use this wisely. We need public investment so as to escape the reactive cycle we are locked in and to begin anticipating the challenges of the polycrisis, whether in public health, climate change or destabilising geopolitics.

Takeaways by Macro Roundup® AI

  1. The systemic question of the trillion-dollar rebalancing is how financial institutions are carried through it, and that is what will define this historical episode.
  2. Debtors benefit from inflation and the revaluation of their debts but must brace for surging debt service costs, with those who did not stretch maturities during the low-rate era facing an interest rate cliff.
  3. If higher debt service is absorbed and a rash of bank crises avoided, the one-off shock to the price level opens unexpected fiscal space that should fund public investment to anticipate the polycrisis in public health, climate change and destabilising geopolitics.

AI Summary. One in 25 American five-year-olds is projected not to reach age 40, making deaths among the young a defining feature of US mortality. These deaths are overwhelmingly caused by external factors such as drug overdoses, gun violence, and dangerous driving.

John Burn-Murdoch Financial Times
Date Posted:

One in 25 or 4% of American 5-year-olds today will not live to 40; these deaths are largely due to drug overdoses, gun violence, and driving related deaths. @jburnmurdoch

What drives high death rates among young Americans?

Core argument: One in 25 American five-year-olds today will not reach their 40th birthday, meaning one set of parents from every US kindergarten class will most likely bury their child.

America’s mortality problem is driven primarily by deaths among the young. One statistic in particular stood out: one in 25 American five-year-olds today will not make it to their 40th birthday. No parent should ever have to bury their child, but in the US one set of parents from every kindergarten class most likely will. These young deaths are caused overwhelmingly by external causes—overdoses, gun violence, dangerous driving and such—which are deeply embedded social problems involving groups with opposing interests.

Takeaways by Macro Roundup® AI

  1. One in 25 American five-year-olds today will not reach their 40th birthday, meaning one set of parents from every US kindergarten class will most likely bury their child.
  2. America's mortality problem is driven primarily by deaths among the young.
  3. Deaths among young Americans stem overwhelmingly from external causes—overdoses, gun violence and dangerous driving—which are deeply embedded social problems involving groups with opposing interests.

AI Summary. The labor force participation rate ran about 0.9 percentage points below its pre-pandemic average, a shortfall of close to 2.4m workers, while a 0.6 hour drop in average weekly hours added a labor supply shortfall equivalent to roughly another 2.4m workers. Much of the participation decline would have been expected even absent the pandemic.

Katharine Abraham and Lea Rendell Brookings Papers on Economic Activity
Date Posted:

.@LeaRendell argues the labor force is 700,000 workers below expectations based on changing demographics and pre-pandemic trends. She attributes these workers’ absence to fear of COVID and long COVID.

How large is the labor supply shortfall, and why?

Core argument: The labor force participation rate over the 12 months ending December 2022 was about 0.9 percentage points below the 12-month average ending February 2020, a shortfall of close to 2.4 million workers.

The labor market has changed significantly since the start of the pandemic. Over the 12 months ending December 2022, the labor force participation rate was about 0.9 percentage points below the 12-month average ending in February 2020. This is a shortfall of close to 2.4 million workers. The 0.6 hour reduction in the moving average level of average weekly hours over the same period contributed an additional labor supply shortfall that is the equivalent of about another 2.4 million workers. As shown in the table, much of the decline in labor force participation over the past three years should have been anticipated even absent the pandemic

Takeaways by Macro Roundup® AI

  1. The labor force participation rate over the 12 months ending December 2022 was about 0.9 percentage points below the 12-month average ending February 2020, a shortfall of close to 2.4 million workers.
  2. A 0.6 hour decline in the moving average of average weekly hours over the same period added a labor supply shortfall equivalent to roughly another 2.4 million workers.
  3. Much of the decline in labor force participation over the past three years should have been anticipated even absent the pandemic.

Monday, April 3, 2023

AI Summary. The authors estimate that each 10% increase in the share of the US population aged 60+ lowered GDP per capita by 5.5%, with one-third from slower employment growth and two-thirds from slower labor productivity growth. Their estimate implies population aging reduced annual GDP per capita growth by 0.3 percentage points.

Nicole Maestas, Kathleen Mullen and David Powell American Economic Journal
Date Posted:

.@NicoleMaestas2 @KathleenJMullen @thedavidpowell use state-by-state variation to estimate the decline in productivity growth caused by an older population; they find that a 10% increase in the 60+ population decreases per capita GDP growth by 5.5%.

How much does population aging reduce GDP per capita growth?

Core argument: Using variation in the predetermined component of population aging across US states for 1980–2010, the authors estimate that each 10 percent increase in the share of the population age 60+ reduced per capita GDP by 5.5 percent.

Population aging is expected to slow US economic growth. We use variation in the predetermined component of population aging across states to estimate the impact of aging on growth in GDP per capita for 1980–2010. We find that each 10 percent increase in the fraction of the population age 60+ decreased per capita GDP by 5.5 percent. One-third of the reduction arose from slower employment growth; two-thirds due to slower labor productivity growth. Labor compensation and wages also declined in response. Our estimate implies population aging reduced the growth rate in GDP per capita by 0.3 percentage points per year during 1980–2010.

Takeaways by Macro Roundup® AI

  1. Using variation in the predetermined component of population aging across US states for 1980–2010, the authors estimate that each 10 percent increase in the share of the population age 60+ reduced per capita GDP by 5.5 percent.
  2. Two-thirds of the estimated reduction in per capita GDP came from slower labor productivity growth and one-third from slower employment growth, with labor compensation and wages also declining in response to population aging.
  3. The authors' estimate implies population aging reduced the growth rate of US GDP per capita by 0.3 percentage points per year during 1980–2010.

AI Summary. Early consumer artificial intelligence applications have largely been wrappers around marketing copy, image generation, and office tasks like spreadsheets and presentations. In shared spaces such as the image generator Midjourney's Discord server, users can see each other's prompts and results and iterate on them in real time, producing rapid collective experimentation and greater sophistication.

Paul Kedrosky and Eric Norlin Irregular Ideas
Date Posted:

.@pkedrosky @defrag argue that emerging feedback loops in terms of use of AI and a collapse in coding cost will fast track AI development. “This wave has hardly begun, and the next phase of AI apps and services is coming faster than anyone expects.”

.@pkedrosky @defrag argue that emerging feedback loops in terms of use of AI and a collapse in coding cost will fast track...

Does shared prompting in public spaces speed up AI experimentation?

Core argument: The first attention-getting AI applications have largely been wrappers around marketing copy, image creation, and office tasks such as spreadsheets and six-slide go-to-market decks.

The first few attention-getting applications and services [of AI] have largely been wrappers, whether around marketing (click here to build a blog post for teenagers promoting XYZ), image creation (here is a prompt to create pictures of happy skiers), or office activities, like spreadsheets and presentations (create a six-slide deck for a typical hardware product go-to-market plan). At the same time, the feedback loops are changing. You can see this in the Discord server of the popular and controversial generative AI service Midjourney, where people can see one another’s image creation prompts, and the results, and then they rapidly iterate in real-time on top of each other’s prompts, moving rapidly to fringe ideas, as well as much higher levels of sophistication and verisimilitude. You are seeing, for the first time, real-time, mass evolution, as people and groups are de facto creating increasingly complex applications right in front of you.

Takeaways by Macro Roundup® AI

  1. The first attention-getting AI applications have largely been wrappers around marketing copy, image creation, and office tasks such as spreadsheets and six-slide go-to-market decks.
  2. On Midjourney's Discord server, users see one another's image prompts and results and iterate on them in real time, moving rapidly toward fringe ideas and higher levels of sophistication and verisimilitude.
  3. Shared, visible AI prompt feedback loops amount to real-time mass evolution, with people and groups de facto creating increasingly complex applications in public view.

AI Summary. University of Chicago researchers note that $1 invested in the Nasdaq quadrupled between 1996 and 2000 before falling back to its 1996 level by 2002, while US total productivity growth rose from about 1% a year in the 1990s to 2.5% in 2004 and 2005. Most of those surprise productivity gains went to old-economy sectors.

Brian Chingono Verdad
Date Posted:

.@verdadcap_quant argues that the European market, with a Price/Earnings valuation of 13X vs 22x in the Nasdaq, looks like the better buy, given the likelihood of long-term convergence in growth rates between European and American firms.

Do old-economy sectors capture most productivity gains after a tech bubble?

Core argument: University of Chicago professors Luboš Pástor and Pietro Veronesi note that $1 invested in the Nasdaq quadrupled between 1996 and March 2000, then fell back to its 1996 level by October 2002 after the internet bubble burst.

University of Chicago professors Luboš Pástor and Pietro Veronesi note that “the value of $1 invested in the Nasdaq quadrupled between 1996 and March 2000, then fell back to the 1996 level by October 2002” after the internet bubble had burst and a critical threshold of widespread internet access had been reached in the United States in 2002. On the other hand, productivity growth in the US economy accelerated sharply after the internet revolution ended in 2002. According to Pástor and Veronesi’s analysis of data from the Bureau of Labor Statistics, total productivity growth in the US economy “averaged about 1% per year in the 1990s, but it increased sharply after 2002: from 1% per year in 2002 to 1.5% in 2003 and 2.5% in 2004 and 2005.” It appears most of the surprise productivity gains in the US after 2002 went to the old economy sectors.  Rather than paying bubble prices today in hopes of a bubble extension through AI, we think investors could benefit most from this revolution over the long term by siding with Europe’s proletariat old-economy sectors that are undervalued by global capitalists today and could see an uprising of productivity in the future.

Takeaways by Macro Roundup® AI

  1. University of Chicago professors Luboš Pástor and Pietro Veronesi note that $1 invested in the Nasdaq quadrupled between 1996 and March 2000, then fell back to its 1996 level by October 2002 after the internet bubble burst.
  2. Pástor and Veronesi's analysis of Bureau of Labor Statistics data finds US total productivity growth averaged about 1% per year in the 1990s and in 2002, rising to 1.5% in 2003 and 2.5% in 2004 and 2005.
  3. Most of the surprise US productivity gains after 2002 appear to have gone to old-economy sectors, suggesting investors could benefit most over the long term by siding with Europe's undervalued old-economy sectors rather than paying bubble prices today.

AI Summary. Eurozone narrow money is contracting as depositors shift checking deposits into longer-maturity accounts, a shift the author attributes to interest-rate normalisation and the European Central Bank's shrinking balance sheet. Broader deposit measures are declining less dramatically, and banks are still extending net new loans to households and companies, though in very small amounts.

Chris Marsh Money: Inside and Out
Date Posted:

Credit creation in the Eurozone is now negative, and M1 has experienced its sharpest decline ever. @GeneralTheorist

Does shrinking narrow money signal weakness or a shift into longer-maturity deposits?

Core argument: Eurozone M1 is collapsing as demand deposits shift into longer maturities, which the author characterises as part of the necessary adjustment as rates normalise and the ECB balance sheet shrinks.

Monetary statistics are of growing importance post-pandemic, but are difficult to interpret since there are many shocks playing out at the same time. Eurozone M1 is indeed collapsing as demand deposits are moved to longer maturities. But this is part of the necessary adjustment as rates normalise and the ECB balance sheet shrinks. Aggregate deposit dynamics are less dramatic than the trends in sight deposits (= checking deposits) alone. On the credit side, banks are still providing net net loans to households and non-financial corporates, but in very small size. And the credit impulse (the 6-month change in the flow of credit, the second derivative of the stock over the past year) is very negative, since we came from a period of elevated credit growth.

Takeaways by Macro Roundup® AI

  1. Eurozone M1 is collapsing as demand deposits shift into longer maturities, which the author characterises as part of the necessary adjustment as rates normalise and the ECB balance sheet shrinks.
  2. Aggregate eurozone deposit dynamics are less dramatic than the trends in sight deposits alone, and monetary statistics remain difficult to interpret while many shocks play out at the same time.
  3. Eurozone banks are still extending net new loans to households and non-financial corporates, but in very small size, and the credit impulse — the 6-month change in the flow of credit — is very negative following a period of elevated credit growth.

AI Summary. US domestic banks hold $16tn in deposits, about a third more than at the start of 2020, and after a one-time outflow of roughly $185bn (about 3% of small banks' deposits) small-bank deposits were stable. The greater concern is deposit costs rather than deposit flows, as rising rates paid on deposits could squeeze bank margins.

Robert Armstrong Financial Times
Date Posted:

.@rbrtrmstrng notes despite headlines of deposit flight US bank deposits are a third higher than they were relative to 2020 but bank deposit rates will compress bank margins.

Are deposit costs a bigger concern for banks than deposit outflows?

Core argument: US domestic banks hold $16tn of deposits, a third higher than at the start of 2020, which the author argues makes worries about a banking system liquidity crisis seem overwrought.

There are 16 trillion dollars of deposits in domestic banks. US bank deposits are a third higher than they were at the start of 2020, which makes worries about a banking system liquidity crisis seem a little overwrought (though, to be fair, it is changes in liquidity, not absolute liquidity levels, that matter most to markets). There was a one-time outflow of about $185bn, or about 3 per cent of small banks’ deposits. The next week, however, small bank deposits were stable. US banks do not seem to have a deposit outflow problem. The problem we worry about (to return to a theme we have banged on about for some weeks now) is not deposits flows but deposits costs. The concern is that until a few weeks ago businesses and households were doing what they usually do, and sleepily ignoring the rate they were earning on their bank accounts. Then stupid SVB went and woke everyone up. Already, deposit rates had been rising slowly (from roughly nothing), and may accelerate now, crimping bank margins even as the economy slows.

Takeaways by Macro Roundup® AI

  1. US domestic banks hold $16tn of deposits, a third higher than at the start of 2020, which the author argues makes worries about a banking system liquidity crisis seem overwrought.
  2. Small banks saw a one-time outflow of roughly $185bn, about 3 per cent of their deposits, but small bank deposits were stable the following week.
  3. The author's concern is deposit costs rather than deposit flows, arguing that SVB woke depositors up to the rates they earn, so slowly rising deposit rates may accelerate and crimp bank margins even as the economy slows.

AI Summary. Money market fund assets track the monetary policy cycle with a lag of one to two years, expanding following tightening cycles. During the recent tightening, money fund yields rose 4.13 percentage points while deposit rates stayed flat, and industry assets grew from $4.31tn to $4.62tn.

Gara Afonso, Marco Cipriani et al Federal Reserve Bank of New York
Date Posted:

Between April 2022 and January 2023, the AUM of the Money market fund industry increased from $4.31T to $4.62T. Historical lags between rate increases and flows into money market funds suggest that this growth will continue. @NewYorkFed

Do money market fund assets grow after interest rate tightening cycles?

Core argument: Money market fund yields rose 4.13 percentage points during the current tightening cycle, in line with the authors' prior estimate of the beta on MMF shares for 2002–2020, while deposit rates remained flat.

The size of the MMF industry tracks the monetary policy cycle, albeit with a lag. The chart above shows the assets under management (AUM) of the MMF industry, along with the EFFR and the spread between the MMF yield and the three-month retail CD rate. As the chart shows, the MMF industry did indeed expand following the monetary policy tightening cycles of 2004-08, 2015-18, and 2022 onward. The expansions, however, took place with a lag of one to two years. During the current tightening cycle, MMF yields have increased by 4.13 percentage points, in line with our previous estimate of the beta on MMF shares between 2002 and 2020; in contrast, deposit rates have remained flat. Moreover, consistent with these results, the AUM of the MMF industry has increased as the Federal Reserve has tightened rates, from $4.31 trillion in April 2022 to $4.62 trillion in January 2023. The relatively small magnitude of this increase in the size of the MMF industry, against a rate hike of 4.25 percentage points, is likely due to a lag with which monetary policy affects investor flows in MMFs; the recent monetary policy tightening, in fact, could lead to a further expansion of the MMF industry in the near future.

Takeaways by Macro Roundup® AI

  1. Money market fund yields rose 4.13 percentage points during the current tightening cycle, in line with the authors' prior estimate of the beta on MMF shares for 2002–2020, while deposit rates remained flat.
  2. Money market fund assets under management rose from $4.31 trillion in April 2022 to $4.62 trillion in January 2023, a modest increase against a 4.25 percentage point rate hike the authors attribute to a lag in investor flows.
  3. The money market fund industry expanded following the tightening cycles of 2004–08, 2015–18, and 2022 onward, with each expansion lagging by one to two years, and the authors suggest recent tightening could bring further expansion.

AI Summary. An assessment of about 380 U.S. metro areas ranked Nashville, Tennessee as the country's hottest job market, followed by Austin, Texas and Jacksonville, Florida. The rankings were based on five factors: the unemployment rate, labor-force participation rate, changes in employment levels, labor-force size, and wages.

Sarah Chaney and Danny Dougherty Wall Street Journal
Date Posted:

According to a @WSJ analysis, the strongest job markets in the country are in Sunbelt cities such as Nashville and Austin.

Are Sunbelt metro areas home to the nation's strongest job markets?

Core argument: Nashville ranked as the top U.S. job market of 2022 in a Wall Street Journal analysis with Moody's Analytics, followed by Austin, Texas, and Jacksonville, Fla.

To find the best job markets in America, head to the South. Nashville, Tenn., topped the list of 2022’s hottest job markets, followed by Austin, Texas, and Jacksonville, Fla. The Wall Street Journal, working with Moody’s Analytics, assessed about 380 metro areas. The rankings determined the strongest labor markets based on five factors: the unemployment rate, labor-force participation rate, changes to employment levels, the size of the labor force and wages in 2022. Larger areas, with more than one million residents, were ranked separately from smaller ones.

Takeaways by Macro Roundup® AI

  1. Nashville ranked as the top U.S. job market of 2022 in a Wall Street Journal analysis with Moody's Analytics, followed by Austin, Texas, and Jacksonville, Fla.
  2. The Wall Street Journal and Moody's Analytics assessed about 380 metro areas using five factors: the unemployment rate, labor-force participation rate, changes to employment levels, labor-force size and 2022 wages.
  3. The rankings ranked metro areas with more than one million residents separately from smaller ones.

AI Summary. Older Chinese workers are largely shut out of the job market, disproportionately lacking the education and skills needed to move into higher-paid or less physically demanding work. Official data show more than two-thirds of migrant workers born in the 1960s finished only middle school, and just one-fifth received professional training.

Sun Yu Financial Times
Date Posted:

Younger Chinese workers have much higher educational attainment than older cohorts. Older workers lack the skills to shift to lower-intensity work as they age. “I am going to keep working until I die,” said a 61-year-old cementer. @FT

Why are older Chinese workers shut out of the job market?

Core argument: More than two-thirds of Chinese migrant workers born in the 1960s finished only middle school, according to official data, and just one-fifth have received professional training.

Older workers also disproportionately lack advanced education and skills that would allow them to transition into higher-paid or lower-intensity work as they age. More than two-thirds of migrant workers born in the 1960s only finished middle school, according to official data, while just one-fifth have received professional training. That compares with two-thirds of those born in the 1980s and 1990s who have attained at least a high school education. “I haven’t had a chance to pick up any tradable skills since I began working at 18,” said Meng Yuhong, a 56-year-old day labourer.

Takeaways by Macro Roundup® AI

  1. More than two-thirds of Chinese migrant workers born in the 1960s finished only middle school, according to official data, and just one-fifth have received professional training.
  2. Two-thirds of Chinese migrant workers born in the 1980s and 1990s have attained at least a high school education, compared with under a third of the 1960s cohort.
  3. Older Chinese workers disproportionately lack the advanced education and skills that would let them shift into higher-paid or lower-intensity work as they age, leaving China's over-50s cut out of the job market.