1. Education
Jodi Beggs

The Economics of the State of the Union Address...

By January 26, 2012

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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.

Comments

January 29, 2012 at 1:22 pm
(1) itfitzme says:

“her impact on her students’ total earnings is, on average, $750,000.”

“a good teacher can increase the lifetime income of a classroom by over $250,000.”

“research puts the value of a great teacher in the neighborhood of $400,000 per year”

Conservatives are good at cooperation by authority. Physics and engineering is good at coming to the same precise conclusion because they study a system with less noise and they keep banging at it until they all come to the same conclusion down to the limits of measurement. For some reason, meteorologist are given latitude in predicting the weather. Economics is more like climate science and is, unfortunately open to ridicule in the unfortunate imprecise nature of the global natural system they study.

When economists come up with such difference in their summary statements, it doesn’t come off very well.

January 30, 2012 at 6:07 pm
(2) cliff says:

Okay, so he said some things that are based on some studies. Let’s even agree that these are facts. Let’s make sure that we are not committing the fallacy of composition…that this state of the union was error free.

February 6, 2012 at 11:07 am
(3) amin khattak says:

well, the state of the union address presents a bright picture about obama’s economic policy, i liked one thing if new skills are created then more jobs can be created

February 6, 2012 at 7:23 pm
(4) Art Spain says:

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.

That’s also called, “lying through their teeth.” Corporations have been telling that to the government for years to keep the H1B visa rates high. What they’re really saying is we can’t find workers with the right skills willing to work for sub-standard wages.

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