“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
“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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“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 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 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
“…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
Evidence on the capacity of governments, firms, universities, and other institutions to make decisions and execute complex work. Coverage examines state capacity, management, expertise, procurement, governance, and organizational performance.
AI Summary.IBM has laid out a roadmap for building a fault-tolerant quantum computer by 2029, citing advances in reducing errors in quantum bits and a technique for identifying and correcting errors in real time using conventional computing. Amazon and Google are also pursuing quantum error correction with dedicated chips.
Belle Lin and Isabelle BousquetteWall Street Journal
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IBM Quantum Starling aims to achieve 20,000x the compute of current quantum computers by 2029, leveraging advanced error-correction techniques to ensure fault tolerance.
Is error correction bringing fault-tolerant quantum computing within reach?
Core argument: IBM's VP of Quantum, Gambetta, attributes the company's confidence in delivering a fault-tolerant quantum computer by 2029 to advances in a new error-reduction approach plus a technique for identifying and correcting errors in real time using conventional computing.
Quantum computers store information as quantum bits and are much richer objects than the binary digits that ordinary computers use. But one of quantum computing’s major problems is that qubits generate errors as they tackle problems. Gambetta, IBM’s VP of Quantum, said IBM’s confidence in its 2029 timeline stems from two recent developments: further advances in a new approach to reducing errors plus a technique for identifying and correcting errors in real-time using conventional computing. IBM isn’t the only one that has promised a fault-tolerant computer by 2029. Others have recently made progress in the area of error correction, including Amazon, with its Ocelot quantum computing chip, which it said can reduce quantum errors by up to 90%. Google is also focused on error correction with its Willow chip. IBM is releasing more detailed plans for its large-scale quantum computer at this point because it hopes to spur developers’ interest in creating quantum algorithms—a key part of the software that will run on quantum computers. That’s critical to achieving a return on investment for quantum computers.
Takeaways by Macro Roundup® AI
IBM's VP of Quantum, Gambetta, attributes the company's confidence in delivering a fault-tolerant quantum computer by 2029 to advances in a new error-reduction approach plus a technique for identifying and correcting errors in real time using conventional computing.
Amazon says its Ocelot quantum computing chip can reduce quantum errors by up to 90%, while Google is pursuing error correction with its Willow chip, and IBM is not alone in promising a fault-tolerant machine by 2029.
IBM is releasing more detailed plans for its large-scale quantum computer to spur developers' interest in creating quantum algorithms, which it considers critical to achieving a return on investment for quantum computers.
Related Articles:
Physicists Question Microsoft’s Quantum Claim— Physicists outside the work have responded cautiously to Microsoft's topological quantum computing claim, noting that the search for topological qubits and the "Majorana" particles underpinning them has a history of bold announcements later withdrawn. Researchers describe the technology as excruciatingly difficult to actually build.
Microsoft’s Majorana 1 Chip Carves New Path for Quantum Computing— Microsoft unveiled Majorana 1, a quantum chip built on a Topological Core architecture using a new materials stack of indium arsenide and aluminum, which the company expects will enable quantum computers capable of solving industrial-scale problems within years rather than decades. The topological superconductor produces a qubit that is fast, small, stable, and digitally controlled.
Meet Willow, Our State-of-the-Art Quantum Chip— Google reports that its Willow quantum chip completed a random circuit sampling benchmark computation in under five minutes that one of today's fastest supercomputers would take an estimated 10^25 years to perform. The benchmark is described as the classically hardest test currently runnable on a quantum computer.
AI Summary.Faster loan growth at lightly regulated smaller banks, credit unions, and private credit compared with large banks suggests post-2008 rules that raised capital and liquid-asset requirements with bank size have constrained large-bank lending. With loan growth currently limited more by demand than supply, easing large-bank requirements may mainly shift existing loans toward large banks.
Joseph WangFed Guy Blog
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The surge in alternative lending sources suggests that the financial system “rewired itself” around the regulatory constraints imposed on large institutions. Less regulation may restore large bank lending at the expense of small banks and private credit.
Would easing large-bank capital rules boost lending or just shift it?
Core argument: Faster loan growth at more lightly regulated small banks and credit unions than at large banks during the pandemic boom, alongside rapid private credit expansion, suggests post-2008 regulations have been a significant constraint on large-bank lending.
The strong relative growth in lending by smaller banks and private credit suggest that regulations have been a significant constraint on bank lending. Post-2008 banking regulations sought in part to end “To Big to Fail” by imposing regulatory burdens that increased with the size of a bank. Large banks had to significantly increase capital and were also forced to hold a lot of low yielding liquid assets. This framework put large banks at a structural disadvantage relative to more lightly regulated small banks and credit unions. The impact can be seen in the rapid loan growth in more lightly regulated banks compared to large banks during the pandemic economic boom and in the rapid growth in private credit. Bowman, the Fed’s new Vice Chair of Supervision, is signaling upcoming changes that would lower regulatory costs on large banks. The current environment suggests that loan growth is more constrained by demand rather than supply. [Thus] lower capital requirements and the removal of WFC’s asset cap may simply redistribute the outstanding loans from small banks and private credit towards the large banks.
Takeaways by Macro Roundup® AI
Faster loan growth at more lightly regulated small banks and credit unions than at large banks during the pandemic boom, alongside rapid private credit expansion, suggests post-2008 regulations have been a significant constraint on large-bank lending.
Post-2008 rules aimed at ending "Too Big to Fail" imposed regulatory burdens that rose with bank size, requiring large banks to significantly increase capital and hold large amounts of low-yielding liquid assets.
With loan growth more constrained by demand than supply, lower capital requirements and removal of Wells Fargo's asset cap may simply redistribute outstanding loans from small banks and private credit toward large banks.
Related Articles:
The Secular Decline of Bank Balance Sheet Lending— Traditional bank balance sheet lending has declined as a share of credit intermediation, with credit increasingly channeled through arms-length transactions such as securitization. A structural model attributes falling lending shares to lower securitization costs, savers' behavior driving bank balance sheet size, and implicit bank costs and subsidies shaping balance sheet composition.
Private Credit Growth and Monetary Policy Transmission— Private credit — direct lending to businesses by nonbank institutions — accounts for about 15% of private companies' outstanding debt, with volumes comparable to leveraged loans and high-yield corporate bonds. The authors find monetary policy transmission through private credit may be muted relative to bank lending and public bond markets, given resilient credit supply.
How the Banking System Changed Post-SVB— American banks have tightened lending standards and reduced credit availability for both business and household loans, amid a weaker macroeconomic environment, limited liquidity, and elevated financial risks. The degree of tightening matches levels previously seen only during the 2008 recession and the onset of the COVID-19 pandemic.
AI Summary.China has agreed to fast-track rare earth export licence approvals for some European companies after its export controls on the critical minerals disrupted global supply chains and slowed deliveries for manufacturers of goods from cars to washing machines. China's commerce minister urged the European Union to facilitate trade in high-tech products to China.
Edward White and Andy BoundsFinancial Times
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Beijing agreed to fast-track approvals of rare earth export licenses to the EU, avoiding factory stoppages. “Resolving this issue is of strategic importance for the EU due to the alarming situation for EU industry.”
Is China easing rare earth export controls for European manufacturers?
Core argument: Beijing agreed to fast-track rare earth export licence approvals for some European companies after China's controls on the critical minerals rocked global supply chains and slowed deliveries for manufacturers of goods from cars to washing machines.
Beijing has agreed to fast-track approvals for rare earth export licenses for some European companies after China’s strict controls on shipments of the critical minerals rocked global supply chains. Beijing has become increasingly concerned that Europe has followed US-led restrictions on sales of semiconductors and chipmaking equipment to China. China’s commerce minister urged the EU to “take effective measures to facilitate, safeguard and promote compliant trade of high-tech products to China”. Beijing has sought to improve ties with Brussels since Trump returned to office but EU officials said that, despite warm words, there had been little compromise on issues of concern until now. The EU commissioner for trade and economic security said he had pressed his Chinese counterpart over the rare earth delays, which were slowing deliveries for manufacturers of a wide range of items from cars to washing machines. On Friday the European Chamber warned that progress had “not been sufficient” to prevent severe supply chain disruptions for many companies.
Takeaways by Macro Roundup® AI
Beijing agreed to fast-track rare earth export licence approvals for some European companies after China's controls on the critical minerals rocked global supply chains and slowed deliveries for manufacturers of goods from cars to washing machines.
China's commerce minister urged the EU to "take effective measures to facilitate, safeguard and promote compliant trade of high-tech products to China," amid Beijing's concern that Europe has followed US-led restrictions on semiconductors and chipmaking equipment.
The European Chamber warned that progress had "not been sufficient" to prevent severe supply chain disruptions for many companies, and EU officials said Beijing had offered little compromise on issues of concern despite warm words.
Related Articles:
China’s Curb On Metal Exports Reverberates Across Chip Sector— China announced export curbs on gallium and germanium, metals used in chipmaking that the US government classifies among dozens of minerals critical to economic and national security.
China Weighs Export Ban For Rare-Earth Magnet Tech— China is weighing rules that would ban or restrict exports of technology used to process and refine rare-earth elements and to make high-performance rare-earth magnet alloys. China accounts for roughly 70% of global rare-earth production, down from about 90% a decade earlier, and retains a tight hold on refining.
AI Summary.Apple's overseas manufacturing model gave it more control over production, not less, and its investment in Chinese manufacturing reached $55bn a year. The author argues Apple's investment and freely shared knowledge were a major factor enabling Chinese technology companies to close the gap with Western rivals, and that this expertise cannot be taken back.
Drake BennettBloomberg
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Apple’s investment in PRC mfg reached $55B/yr by 2015, and shared knowledge enabled the rise of Chinese tech companies. Quoting FT’s McGee, “The technology transfer that Apple facilitated made it the biggest corporate supporter of ‘Made in China 2025′.”
Did Apple's investment help Chinese tech firms close the gap?
Core argument: Apple's investment in Chinese manufacturing reached $55 billion per year by 2015, and FT's McGee argues in *Apple in China* that Apple's unique approach to overseas manufacturing evolved into a formidable competitive advantage.
In his new book, Apple in China, FT’s McGee argues Apple’s unique approach to overseas manufacturing…has evolved into a formidable competitive advantage. Apple’s billions in investment and freely shared knowledge have been a major factor enabling the rise of China’s own technology companies, allowing them to close the gap with Western competitors — Apple included —with surprising speed. Outsourcing was - at first in South Korea and Taiwan, then, increasingly, in China - actually gave the company more control, not less, over the production process. As Apple grew, it began making massive investments in manufacturing technology. Apple’s investment in Chinese manufacturing reached $55 billion per year by 2015. But even if Apple were itself interested in decoupling from China, it’s not possible to unbolt and take back the valuable expertise that Apple’s Chinese partners have already gained from their collaboration. “The technology transfer that Apple facilitated,” McGee writes, “made it the biggest corporate supporter of Made in China 2025, Beijing’s ambitious, anti-Western plan to sever its reliance on foreign technology.”
Takeaways by Macro Roundup® AI
Apple's investment in Chinese manufacturing reached $55 billion per year by 2015, and FT's McGee argues in *Apple in China* that Apple's unique approach to overseas manufacturing evolved into a formidable competitive advantage.
McGee writes that the technology transfer Apple facilitated made it the biggest corporate supporter of Made in China 2025, Beijing's plan to sever its reliance on foreign technology.
McGee argues Apple's outsourcing — first in South Korea and Taiwan, then increasingly in China — gave the company more control over production, not less, while its billions in investment and freely shared knowledge helped Chinese technology firms close the gap with Western competitors, Apple included.
Related Articles:
What it Would Take for Apple to Disentangle itself from China— Some supply chain experts argue India's phone manufacturing growth is overstated, noting the 200M phones made there last year are mostly models selling for $250 or less, while iPhones average near $1,000 and require more sophisticated automation and labor. One analyst projects Apple shifts just 10% of iPhone production outside China by 2030, or at most 20%.
Apple’s iPhone Supply Chain Splinters Under US-China Tensions— Data on more than 370 Apple suppliers and their factory locations show the company's manufacturing network spreading across the developing world, with Vietnam and India the biggest gainers. US and Japanese producers have reduced their China footprint as Chinese firms join the supplier list, though China still houses most Apple device factories.
Apple Aims to Source all US iPhones From India in Pivot Away From China— Apple plans to shift assembly of all US-sold iPhones to India, aiming to source the more than 60mn units sold annually in the US from Indian plants, which would require doubling its iPhone output there. The US accounted for about 28% of Apple's 232.1mn global iPhone shipments in 2024.
AI Summary.Across countries, a one-standard-deviation rise in self-made billionaires' wealth relative to GDP is associated with 1.87 percentage points faster total factor productivity growth over the next seven years, while the same rise in inherited billionaire wealth is associated with a 1.28-point decline.
Bordin BordeerathSocial Science Research Network
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Forbes data on billionaires from 57 countries over 1986-2011 show that a 1 standard deviation in founders’ aggregate wealth/GDP yields a 1.87 ppt rise in TFP growth over the next 7 yrs, vs. 1.28-ppt lower TFP growth for a 1 standard deviation rise in billionaire heirs’ wealth/GDP. Via Jim Pethokoukis.
Does the source of billionaire wealth determine productivity growth?
Core argument: A one-standard-deviation rise in billionaire founders' aggregate wealth relative to GDP is associated with a 1.87-percentage-point increase in total-factor productivity growth over the following seven years.
I demonstrate that inequality impedes economic efficiency when it arises from rent-seeking by entrenched elites. However, I also show that inequality can be beneficial when driven by creative destruction. A one-standard-deviation increase in the ratio of billionaire founders' aggregate wealth to GDP is associated with a 1.87-percentage-point (ppt) rise in total-factor productivity (TFP) growth over the next seven years. In contrast, a one-standard-deviation increase in billionaire heirs' wealth ratio correlates with a 1.28-ppt decline in TFP growth over the same period. Further the positive relationship between founders' wealth and TFP is stronger in more financially developed countries. By contrast, consistent with the rent-seeking equilibrium, the negative relationship between heirs' wealth and TFP is more pronounced in countries that are less financially developed, less open to foreign capital, and less democratic. One way to [further] identify the sources of wealth driving inequality might be to examine the institutional settings that enable the rich to amass their fortunes.
Takeaways by Macro Roundup® AI
A one-standard-deviation rise in billionaire founders' aggregate wealth relative to GDP is associated with a 1.87-percentage-point increase in total-factor productivity growth over the following seven years.
A one-standard-deviation rise in billionaire heirs' wealth-to-GDP ratio correlates with a 1.28-percentage-point decline in total-factor productivity growth over the same seven-year horizon.
The positive founders' wealth–productivity relationship is stronger in more financially developed countries, while the negative heirs' wealth relationship is more pronounced in countries that are less financially developed, less open to foreign capital, and less democratic.
Related Articles:
The Economics of Inequality in High-Wage Economies— Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.
How To Get Rich in 2025— Academic estimates compiled by The Economist indicate inheritances, after falling over the 20th century, were worth about 10% of GDP on average by the end of the 2010s, with roughly $6tn inherited across the rich world in a year. Falling family sizes mean each inheritance is spread across fewer heirs.
AI Summary.The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.
Claire BusheyFinancial Times
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The mean tenure of Boeing engineers has fallen from 16.4 to 12.6 years over the last decade as job cuts and competition from space firms increase; the brain drain is threatening the institutional knowledge needed to design and build a new plane.
Is shorter engineer tenure hurting a planemaker's ability to build new aircraft?
Core argument: The average tenure of a Boeing engineer fell from 16.4 years to 12.6 years over the past decade, according to data from the Society of Professional Engineering Employees in Aerospace, the union representing 12,000 Boeing engineers.
The average tenure of a Boeing engineer has fallen over the past decade from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, the Society of Professional Engineering Employees in Aerospace. Tenure shortened in almost every age bracket, with employees in their 20s and 30s averaging fewer years, as well as those in their late 40s through 65. The risk of this “brain drain”, as analysts, recruiters and union officials have described it, is that it drags on current operations and could make it harder for Boeing to launch its next new plane. “All of this experience is gone,” said Matt Kempf, SPEEA’s senior director for compensation and retirement. That raises concerns because “aerospace engineers aren’t made, they’re grown”. Boeing also held back on announcing a new plane, depriving engineers of a moonshot project to excite imaginations. The last “clean sheet” aeroplane was launched 20 years ago and became the 787.
Takeaways by Macro Roundup® AI
The average tenure of a Boeing engineer fell from 16.4 years to 12.6 years over the past decade, according to data from the Society of Professional Engineering Employees in Aerospace, the union representing 12,000 Boeing engineers.
Boeing engineer tenure shortened in almost every age bracket, including employees in their 20s and 30s and those from their late 40s through 65, according to SPEEA data.
Analysts, recruiters and union officials have described a "brain drain" at Boeing that drags on current operations and could make launching its next new plane harder; Boeing's last "clean sheet" aeroplane was launched 20 years ago and became the 787.
Related Articles:
Space: The Missing Element of Your Strategy— Private-sector funding of space-related companies has topped $10bn, close to a tenfold rise over the past decade, though the US government remains the largest source of space funding. If current momentum continues, commercial funding for space ventures could surpass government funding within 20 years.
It’s Not a Space Race, It’s the Space Olympics— The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
Building an Enduring Advantage in the Third Space Age— The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.
AI Summary.Survey-based estimates show the share of US businesses using artificial intelligence for business purposes rose from 3.7% to 5.4%, with use expected to reach about 6.6%. Users often apply AI to substitute for worker tasks and equipment or software, but few report employment reductions from AI use.
Kathryn Bonney, Cory Breaux, Cathy Buffington, Emin Dinlersoz, Lucia Foster, Nathan Goldschlag, John Haltiwanger, Zachary Kroff and Keith SavageNational Bureau of Economic Research
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Based on a Dept. of Commerce survey of 1.2mm US businesses, only 6.6% of firms, representing 12% of employees, plan to use AI by Fall 2024. In the Information sector, 21.5% of firms with 25% of employees plan to use AI. @JHaltiwanger_UM
How widely are US businesses adopting AI, and with what employment effects?
Core argument: Bi-weekly business AI use rose from 3.7% to 5.4% between September 2023 and February 2024 in the Business Trends and Outlook Survey, with an expected rate of about 6.6% by early fall 2024.
We provide new, real-time estimates of current and expected future use of AI for business purposes based on the Business Trends and Outlook Survey for September 2023 to February 2024. During this period, bi-weekly estimates of AI use rate rose from 3.7% to 5.4%, with an expected rate of about 6.6% by early Fall 2024. The fraction of workers at businesses that use AI is higher, especially for large businesses and in the Information sector. AI users often utilize AI to substitute for worker tasks and equipment/software, but few report reductions in employment due to AI use. Common uses of AI include marketing automation, virtual agents, and data/text analytics. Many businesses do not yet see AI as being relevant for their business activity or do not yet have the knowledge to implement AI in their business activity.
Takeaways by Macro Roundup® AI
Bi-weekly business AI use rose from 3.7% to 5.4% between September 2023 and February 2024 in the Business Trends and Outlook Survey, with an expected rate of about 6.6% by early fall 2024.
The fraction of workers at businesses using AI exceeds the fraction of businesses using AI, especially for large businesses and in the Information sector, with marketing automation, virtual agents, and data/text analytics among common applications.
AI users often apply AI to substitute for worker tasks and equipment or software, but few report employment reductions from AI use, while many businesses report AI is not yet relevant to their activity or that they lack the knowledge to implement it.
Related Articles:
The AI Transition One Year Later: On Track, but Macro Impact Still Several Years Off— Investment in AI hardware is projected to rise substantially as a precursor to integrating AI into business processes, with the investment cycle estimated to peak at 2–2½% of GDP and early signs visible among AI-enabling companies. The authors estimate generative AI could raise developed-market labor productivity growth by 1.5pp annually over a 10-year adoption period, roughly 15% cumulatively.
Assessing the Implications of a Productivity Miracle— If artificial intelligence can perform economically valuable cognitive tasks at very low marginal cost, consumers would buy far more of the cheapened goods and spend the savings in other categories, expanding activity and employment in sectors facing new demand. Where supply is inherently limited, such as real estate, those savings could bid up prices and produce inflation.
The Good, the Bad and the Ugly— Dominion Energy, which serves 6m customers, has raised its projected power needs for the coming decade, attributing the change to data center demand. McKinsey, BCG, and S&P Global all expect US power demand to grow 13%-15% annually through 2030, and rising transformer costs alongside electrification could make electricity scarcer.
AI Summary.A study of 1,993 cities in France, Germany, Italy, Japan, the UK and the US finds former manufacturing hubs lost employment on average after each country's manufacturing peak, though a large share fully recovered. After the peak, hubs with a higher initial share of college-educated workers grew significantly faster.
Luisa Gagliardi, Enrico Moretti and Michel SerafinelliUniversity of California
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Enrico Moretti, Michel Serafinelli and @GagliarL show that, among cities worldwide that were hit by shocks that caused a decline in manufacturing, those that had a high share of college-educated workers recovered faster.
Why do some former manufacturing hubs recover employment while others decline?
Core argument: Across 1,993 cities in France, Germany, Italy, Japan, the UK, and the US, former manufacturing hubs lost employment on average after their country's manufacturing peak, yet a surprisingly large share in each country fully recovered.
We study the employment consequences of deindustrialization for 1,993 cities in six countries: France, Germany, Italy, Japan, the United Kingdom, and the United States. We focus on former manufacturing hubs—defined as Local Labor Markets that in the year of their country’s manufacturing peak have a manufacturing employment share in the top tercile of their country’s distribution. While on average former manufacturing hubs lost employment after their country’s manufacturing peak, a surprisingly large share in each country was able to fully recover. We find that in the two decades before the relevant country’s manufacturing peak, cities with a high share of college-educated workers experienced a similar rate of employment growth as those with a low share of college-educated workers. By contrast, in the decades after the manufacturing peak, the employment trends diverge: cities with a high initial share of college-educated workers experience significantly faster employment growth.
Takeaways by Macro Roundup® AI
Across 1,993 cities in France, Germany, Italy, Japan, the UK, and the US, former manufacturing hubs lost employment on average after their country's manufacturing peak, yet a surprisingly large share in each country fully recovered.
In the two decades before each country's manufacturing peak, cities with high and low shares of college-educated workers grew employment at similar rates, with trends diverging only after the peak.
After their country's manufacturing peak, cities with a high initial share of college-educated workers experienced significantly faster employment growth than those with a low share.
Related Articles:
Are Manufacturing Jobs Still Good Jobs? An Exploration of the Manufacturing Wage Premium— Manufacturing average hourly wages, once about 3% above private-sector wages, have grown more slowly than private-sector wages, erasing the manufacturing wage premium for most manufacturing jobs. The authors estimate that declining unionization accounts for more than 70% of that drop, an effect that remains significant after controlling for worker and sector characteristics.
Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown— The authors estimate that greater dispersion in productivity growth among an industry's input and idea suppliers has a strong negative effect on that industry's own productivity growth, using data on 462 US manufacturing industries and 42 non-manufacturing industries. Their evidence implies most of the US productivity slowdown can be explained by rising cross-industry variance in productivity growth.
