Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “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
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

High vs Low Skill

Evidence comparing high- and low-skill work, workers, and firms. The archive examines wages, employment, technology, education, task change, bargaining power, and how economic gains are distributed across skill levels.

AI Summary. Employees at more productive firms and firms with more structured management practices have substantially higher pay, with a doubling of productivity associated with 15% higher pay for the highest-paid employee versus 7% for the median worker. The authors estimate rising productivity can explain 40% of the increase in within-firm inequality.

Melanie Wallskog, Nicholas Bloom, Scott Ohlmacher and Cristina Tello-Trillo National Bureau of Economic Research
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Increases in firm-level productivity disproportionately raise wages for top earners, and since 1980 have driven 40% of the rise in within-firm inequality as measured by the CEO/median pay ratio. @I_Am_NickBloom @WallskogMelanie @tellotri

How much of rising within-firm pay inequality does productivity explain?

Core argument: A doubling of firm productivity is associated with 15% higher pay for a firm's highest-paid employee, likely the CEO, versus 7% for the median worker.

We find that employees at more productive firms and firms with more structured management practices have substantially higher pay. This pay-performance relationship is particularly strong amongst top-paid executives, with a doubling of firm productivity associated with 15% more pay for the highest-paid employee (likely the CEO) compared to 7% for the median worker. The highest-paid worker sees a 19% pay increase in public firms but only an 11% pay increase in private firms for a doubling of productivity. More productive firms have higher within-firm inequality. The magnitude of this pay-performance slope suggests rising productivity can explain 40% of the rise in within-firm inequality since 1980.

Takeaways by Macro Roundup® AI

  1. A doubling of firm productivity is associated with 15% higher pay for a firm's highest-paid employee, likely the CEO, versus 7% for the median worker.
  2. For a doubling of productivity, the highest-paid worker's pay rises 19% in public firms but 11% in private firms, and more productive firms show higher within-firm inequality.
  3. The magnitude of the estimated pay-performance slope suggests rising productivity can explain 40% of the rise in within-firm inequality since 1980; employees at firms with more structured management practices also have substantially higher pay.

Related Articles:

  • Why Do Wages Grow Faster for Educated Workers? — College graduates sort into professional, non-routine occupations where wages rise much more with job tenure, and the author estimates this occupational sorting explains at least half of the life-cycle growth in the college wage premium. That premium is estimated at 22% at age 26, 49% at age 40, and 56% at age 60.
  • Multidimensional Human Capital and the Wage Structure — The wage return to cognitive skills has declined, from about 10% higher hourly wages per standard deviation of test score in the 1980s and early 1990s to 4.5% in the 2000s and early 2010s, while returns to a bachelor's degree rose. Social skill-intensive occupations grew as a share of US jobs, with faster real wage growth.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. Within the same metropolitan-area income quartile, denser neighborhoods have a higher share of jobs that can be done remotely. The authors argue this pattern suggests increased telework raises willingness to pay for housing in high-density places, where leisure amenities and nonwork social interaction are more available.

Leah Brooks, Philip Hoxie, and Stan Veuger American Enterprise Institute
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Remote work is more prevalent in denser neighborhoods according to new research by @stanveuger @phoxie58 @AEIecon.

Does remote work increase demand for housing in dense neighborhoods?

Core argument: Among neighborhoods within the same metropolitan-area income quartile, denser block groups have a higher share of teleworkable jobs, a finding the authors describe as surprising.

We find that, for neighborhoods in the same metropolitan-area income quartile, the denser the block group, the higher the share of teleworkable jobs. This surprising finding could arise for a number of reasons. First, if workers in industries with greater telework potential enjoy more leisure time in equilibrium, their willingness to pay for amenities that complement leisure increases, and such amenities may not be available in lower-density areas. Second, if workers value social interactions and interactions at work are less frequent, they may seek out social interactions in nonwork settings. Nonwork social interactions are more readily found in population dense areas. Third, and similarly, if in-person contact drives agglomeration effects, a shift to remote work makes such contact outside the workplace more valuable. Again, in-person contact is easier in more population dense areas. All these explanations point toward increased telework leading to a greater willingness to pay for housing in high-density places.

Takeaways by Macro Roundup® AI

  1. Among neighborhoods within the same metropolitan-area income quartile, denser block groups have a higher share of teleworkable jobs, a finding the authors describe as surprising.
  2. One proposed explanation holds that workers in industries with greater telework potential enjoy more leisure in equilibrium, raising their willingness to pay for leisure-complementing amenities that may be unavailable in lower-density areas.
  3. The authors argue that if workers seek social interaction and in-person contact outside the workplace, increased telework would raise willingness to pay for housing in high-density places.

Related Articles:

  • Remote Work Is Less Common Than We Thought — New Bureau of Labor Statistics estimates show hybrid remote work is substantially less common than other surveys indicated, while fully remote work matches other estimates at about one in ten workers, making fully remote slightly more common than hybrid. Nearly one in five college-educated workers are fully remote, and nearly 40% of advanced-degree holders work hybrid or fully remote.
  • Remote Work, Three Years Later — Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
  • The Geography of Working From Home Begins to Shift Again — Areas with the highest shares of people working from home are mostly central cities of metropolitan areas or places hosting large corporate headquarters, including Cupertino, California and Redmond, Washington, home to Apple and Microsoft. Working from home appears most popular in places close to concentrations of offices and other workplaces.

AI Summary. New Bureau of Labor Statistics estimates show hybrid remote work is substantially less common than other surveys indicated, while fully remote work matches other estimates at about one in ten workers, making fully remote slightly more common than hybrid. Nearly one in five college-educated workers are fully remote, and nearly 40% of advanced-degree holders work hybrid or fully remote.

Adam Ozimek and Eric Carlson Economic Innovation Group
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According to new BLS numbers, 19.5% of American workers worked remotely during August 2023 with the majority of those workers, 53%, being fully remote. Among college graduates, nearly 20% are fully remote. @ModeledBehavior and Eric Carlson

Is hybrid remote work less common than other surveys suggest?

Core argument: New BLS data show hybrid remote work to be substantially lower than other surveys estimated, while fully remote work sits near other surveys' figure of about one in ten workers, leaving fully remote slightly more common than hybrid.

A new estimate of remote work from the Bureau of Labor Statistics (BLS) suggests that remote work is less common than previously thought. While the new BLS data reveals hybrid remote work to be substantially lower than other surveys estimated, fully remote work is close to where other surveys show, at around one out of ten workers. As a result, fully remote work appears slightly more common than hybrid remote work. Looking at the college-educated, nearly one in five are fully remote. Among advanced degree holders, nearly 40% are hybrid or fully remote. Among skilled workers, remote working is now a substantial share of the labor force, including fully remote.

Takeaways by Macro Roundup® AI

  1. New BLS data show hybrid remote work to be substantially lower than other surveys estimated, while fully remote work sits near other surveys' figure of about one in ten workers, leaving fully remote slightly more common than hybrid.
  2. Nearly one in five college-educated workers are fully remote, and nearly 40% of advanced degree holders work hybrid or fully remote, according to the BLS estimate.
  3. Remote work, including fully remote arrangements, accounts for a substantial share of the skilled labor force.

Related Articles:

  • Working Remotely? Selection, Treatment, and the Market for Remote Work — Using data from a Fortune 500 firm that hired both remote and on-site workers, the authors estimate that shifting on-site workers to remote lowered their hourly calls by 4% relative to already-remote workers, accounting for one third of the productivity gap; worker selection explained the other two thirds.
  • Remote Work, Three Years Later — Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
  • Central Business Districts: City Strugglers — Consumer spending in central business districts remains below pre-pandemic levels in northern and western US cities while southern city centers show strong growth, a gap attributed largely to migration patterns rather than differences in working from home. Cities with population gains show spending roughly 20% above pre-pandemic levels, while those with population losses are down about 20%.

AI Summary. Using data from a Fortune 500 firm that hired both remote and on-site workers, the authors estimate that shifting on-site workers to remote lowered their hourly calls by 4% relative to already-remote workers, accounting for one third of the productivity gap; worker selection explained the other two thirds.

Natalia Emanuel and Emma Harrington Federal Reserve Bank of New York
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Using evidence from call center workers @NataliaHEmanuel @emma_k_h find that remote work lowered workers’ productivity, but the majority of the gap between onsite and remote work was driven by negative worker selection into remote work. @NewYorkFed

How much of the remote work productivity gap reflects worker selection?

Core argument: Hourly calls of on-site workers who went remote around Covid-19 office closures fell 4% relative to already-remote workers at an American Fortune 500 firm, indicating negative treatment effects accounted for one third of the productivity gap.

We ask two questions: how does remote work affect productivity, and how productive are the workers who choose remote jobs? To quantify each factor, we use data from an American Fortune 500 firm that hired both remote and on-site workers prior to Covid-19. Around the office closures of Covid-19, the hourly calls of on-site workers going remote fell by 4% relative to that of already-remote workers, indicating that negative treatment effects accounted for one third of the productivity gap. After the offices were closed, workers who initially chose remote jobs were 8% less productive than those who initially chose on-site jobs, even though all workers were working at home. Thus, two thirds of the initial productivity gap was due to worker selection.

Takeaways by Macro Roundup® AI

  1. Hourly calls of on-site workers who went remote around Covid-19 office closures fell 4% relative to already-remote workers at an American Fortune 500 firm, indicating negative treatment effects accounted for one third of the productivity gap.
  2. After offices closed and all workers were at home, employees who had initially chosen remote jobs were 8% less productive than those who initially chose on-site jobs, attributing two thirds of the initial gap to worker selection.
  3. Data from an American Fortune 500 firm that hired both remote and on-site workers before Covid-19 separates how remote work affects productivity from how productive the workers who choose remote jobs are.

AI Summary. Larger investments in artificial intelligence are associated with workforce upskilling at firms, with rising shares of workers holding bachelor's, master's, and doctoral degrees and a falling share without college education. The authors estimate a one-standard-deviation increase in a firm's share of AI workers corresponds to a 7.2% decline in the share of non-college workers.

Tania Babina, Anastassia Fedyk, Alex He and James Hodson National Bureau of Economic Research
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Between 2010 and 2018 firms that invested in AI shifted employment towards more junior employees with high educational attainment and technical expertise. @TaniaBabina @AnastassiaFedyk @AlexXiHe

Does AI investment shift firms toward more educated workers?

Core argument: A one-standard-deviation increase in a firm's share of AI workers is associated with a 7.2% decline in the share of workers without college education, alongside rising shares of degree-holding workers.

In terms of labor composition, we observe a general upskilling trend associated with larger AI investments. Firms that invest more in AI tend to increase their shares of workers with bachelors, masters, and doctoral degrees (correspondingly decreasing the share of workers without college education). For example, a one-standard-deviation increase in the firm’s share of AI workers translates into a 3.7% increase in the share of workers whose maximal educational attainment is an associates or bachelors degree, a 2.9% increase in the share of workers whose maximal educational attainment is a masters degree, and a 0.6% increase in doctoral degrees. These increases in educated workers correspond to a 7.2% decline in the share of workers without college education.

Takeaways by Macro Roundup® AI

  1. A one-standard-deviation increase in a firm's share of AI workers is associated with a 7.2% decline in the share of workers without college education, alongside rising shares of degree-holding workers.
  2. A one-standard-deviation increase in a firm's AI worker share corresponds to a 3.7% rise in the share of workers with an associate's or bachelor's degree, 2.9% for master's degrees, and 0.6% for doctorates.
  3. Firms making larger AI investments show a general upskilling trend in labor composition, tending to increase their shares of workers with bachelor's, master's, and doctoral degrees.

AI Summary. A shrinking working-age population across rich countries means companies must work harder to attract prime-age workers and tap new demographic pools, while a growing older population raises demand for caregivers and home helpers. Job vacancies in the US reached 11m, most of them frontline roles in retail, health care, hotels, restaurants, and call centers.

Adrian Wooldridge Bloomberg
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.@adwooldridge argues that tighter labor will require management teams to spend more time managing low-skilled workers.

Will shrinking working-age populations force firms to compete for frontline workers?

Core argument: The United States had 11m job vacancies in March 2022, most of them frontline jobs in retail, health care, hotels, restaurants, and call centers, with similar shortages emerging across the rich world.

The shrinking of the working-age population across the rich world means that companies will have to work harder to attract prime-age workers while also finding new demographic pools to fish in. The simultaneous rise in the number of older people will increase demand for caregivers and home helps. In March 2022, the United States suffered from 11 million job vacancies — most of them frontline jobs in retail, health care, hotels, restaurants, call centers, etc. Similar shortages emerged across the rich world. Zeynep Ton reports that in 2019-20 Nissan’s Smyrna, Tennessee, assembly plant suffered from a 38% turnover rate among its technicians; the direct cost of replacing each technician was $15,000.

Takeaways by Macro Roundup® AI

  1. The United States had 11m job vacancies in March 2022, most of them frontline jobs in retail, health care, hotels, restaurants, and call centers, with similar shortages emerging across the rich world.
  2. Zeynep Ton reports that Nissan's Smyrna, Tennessee assembly plant had a 38% turnover rate among technicians in 2019–20, with a direct replacement cost of $15,000 per technician.
  3. The shrinking working-age population across the rich world means companies will have to work harder to attract prime-age workers and find new demographic pools, while the rising number of older people increases demand for caregivers and home helps.

AI Summary. The share of job postings offering at least one remote day per week rose more than three-fold in the U.S. and five-fold or more in Australia, Canada, New Zealand and the U.K., exceeding 10% in all but New Zealand. These shifts vary widely across cities, industries, occupations and companies.

Stephen Hansen, Peter John Lambert, et al National Bureau of Economic Research
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Over 10% of job listings in the Anglosphere countries now allow for remote work for at least one day a week. @I_Am_NickBloom @StephenEKHansen @pj_lambert @raffasadun @Bledi_Taska

How much have job postings offering remote work increased?

Core argument: Job postings offering at least one remote day per week rose more than three-fold in the U.S. and five-fold or more in Australia, Canada, New Zealand and the U.K. from 2019 to 2022.

The share of postings that say new employees can work remotely one or more days per week was tiny before the pandemic: 1% or less in Australia, Canada and New Zealand as of 2019, about 3% in the U.K., and about 4% in the U.S. From 2019 to 2022, this remote-work share rose more than three-fold in the U.S and five-fold or more in the other countries. As of January 2023, the remote-work share exceeds 10% of postings in Australia, Canada, the U.K, and the U.S., and it appears to be on an upward trajectory in all five countries. These developments are highly non-uniform across and within cities, industries, occupations, and companies. Even when zooming in on employers in the same industry competing for talent in the same occupations, we find large differences in the share of job postings that explicitly offer remote work.

Takeaways by Macro Roundup® AI

  1. Job postings offering at least one remote day per week rose more than three-fold in the U.S. and five-fold or more in Australia, Canada, New Zealand and the U.K. from 2019 to 2022.
  2. Before the pandemic, postings advertising remote work stood at about 4% in the U.S., about 3% in the U.K., and 1% or less in Australia, Canada and New Zealand as of 2019.
  3. Remote-work postings exceed 10% of the total in Australia, Canada, the U.K. and the U.S. as of January 2023, with large differences across cities, industries, occupations, and even among employers in the same industry competing for the same occupations.

AI Summary. Workers most likely to leave cities for the suburbs are high earners in technology, finance, real estate and entertainment who are key sources of income and property tax revenue, while lower-paid service, health care, hospitality and food workers are least likely to move. The 56 largest US metropolitan areas saw a cumulative decline of 900,000 in their white populations.

Thomas Edsall New York Times
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.@Edsall highlights the risk of downward spirals for major American cities, as higher-income workers take advantage of hybrid work schedules to move to suburbs, leaving cities with declining populations that are both lower-income and more non-white.

.@Edsall highlights the risk of downward spirals for major American cities, as higher-income workers take advantage of...

Are cities losing their highest-earning taxpayers to the suburbs?

Core argument: Brookings demographer William Frey reported that the 56 largest U.S. metropolitan areas saw a cumulative decline of 900,000 in their white populations from 2020 to 2021.

The men and women most likely to move to the suburbs are among the highest-paid key sources of income and property tax revenues: workers with six-figure salaries in technology, finance, real estate and entertainment. Those least likely to move, in turn, are paid much less, working in service industries, health care, hospitality and food sales. There is a striking interaction between the Covid-driven exodus from the cities and changing racial and ethnic urban populations. From 2020 to 2021, the nation’s 56 largest metropolitan areas saw a cumulative decline of 900,000 in their white populations William Frey, a demographer and senior fellow at the Brookings Institution reported.  The challenge facing cities is that dysfunction tends to engender dysfunction; downward spirals accelerate. Covid and remote work have transformed the face of urban America, just as the nation’s cities were becoming increasingly racially and ethnically diverse.

Takeaways by Macro Roundup® AI

  1. Brookings demographer William Frey reported that the 56 largest U.S. metropolitan areas saw a cumulative decline of 900,000 in their white populations from 2020 to 2021.
  2. Workers most likely to move to the suburbs hold six-figure salaries in technology, finance, real estate and entertainment, and rank among the highest-paid sources of city income and property tax revenues.
  3. Workers least likely to leave cities are paid much less, in service industries, health care, hospitality and food sales.