As an economist, I was very pleased to see the number of references to actual economic research, findings and concepts in Tuesday's State of the Union address. As someone who likes data and information accessibility, I was VERY pleased to see that there is an enhanced version of the address (with pictures and graphs and stuff!) available online.

In case you're curious, here are sources for some of the points mentioned:

16:35: "I also hear from many business leaders who want to hire in the United States but can't find workers with the right skills." Yep, that's called structural unemployment, and economists have been aware of the phenomenon for a while now.

19:45: "We know a good teacher can increase the lifetime income of a classroom by over $250,000." In case you're curious, here is an article about said research. The interesting point here is that the $250,000 is even potentially a lowball figure, since other research puts the value of a great teacher in the neighborhood of $400,000 per year.

21:14: "When students are not allowed to drop out, they do better." Economists Josh Angrist and Alan Krueger have a nice paper that gives evidence of the positive impact of mandatory schooling on wages. In related news, I'll give you two guesses as to who Obama's Chief Economic Adviser is.

49:00: Apparently there's an exception to insider trading laws for members of Congress. In addition, members of Congress get pretty consistently higher rates of return on their investments than does the average person, which suggests that they are actually taking advantage of their exemption in some way.

52:00: "That's why my education reform offers more competition and more control for schools and states..." Economist Caroline Hoxby has focused much of her career on looking at the effects of increased competition on school performance, and it's nice to see that people on both ends of the political spectrum are paying attention.

The issue of whether or not teachers (or, more specifically, good teachers) are underpaid is the subject of much debate in both education and politics. Economists are quick to point out that, in competitive labor markets, workers are paid their marginal product of labor- in other words, how much extra value they create. The market for teachers is not a competitive labor market for various reasons, but it would be nice to know nonetheless what the value-add for a good teacher is so that policymakers could examine whether teacher compensation is at least in the right ballpark.

Economists are more than happy to take up this cause, and a few of them have come up with some interesting findings recently. Raj Chetty and John N. Friedman of Harvard University and Jonah E. Rockoff of Columbia University have found that, for fourth graders, having a good teacher adds, on average $25,000 in lifetime earnings per student. If a fourth-grade teacher has 30 students, then her impact on her students' total earnings (assuming she is in the "good category") is, on average, $750,000. This marginal product of labor, however, is at least an order of magnitude higher than even the highest teacher salaries, so it's worth thinking twice next time someone implies that the lack of competitive labor markets in education works to benefit the teachers.

Here are this week's new articles for you to check out:

• The Short Run versus The Long Run - How do economists distinguish between the short run and the long run in compeittive markets?
• The Costs of Production - How can business owners think about the different costs that they face?
• Calculating Profit - How do businesses calculate profit? What is the difference between accounting profit and economic profit?
• Cost Curves - How do economists show different costs graphically?

Enjoy!

Okay, so technically I don't know for sure that that is true, but today is Ronald Coase's 101st birthday, so I feel pretty comfortable playing the odds. In honor of Mr. Coase's birthday, I have a few items of potential interest for you:

• A brief biography of Ronald Coase, which outlines his background as well as his past and present contributions to the field of economics
• An overview of the Coase Theorem, one of Ronald Coase's most notable findings
• A 100th birthday post I did for Coase last year, complete with mediocre Photoshop

Personally, my favorite line of Coase's is "If you torture the data long enough, it will confess."