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This edition was written by Elijah Asdourian, Sam Boocker, Lorae Stojanovic, and David Wessel.
About a fifth of four-year college graduates in the U.S. get their degree after age 30. Using data from the census, the American Community Survey, and the National Longitudinal Survey of Youth, Zsófia Bárány of Central European University, Moshe Buchinsky of UCLA, and Pauline Corblet of NYU find that these “late bloomers” account for more than half of the growth in the share of college-educated adults from 1960 to 2019. The authors also find that the boost to wages that late bloomers experience as a result of attaining a college degree is smaller than the one received by early graduates. In particular, the authors’ findings suggest that current estimates of the college wage premium, which include late bloomers, underestimate the wage gains of college education for those who graduate in their 20s by about 27%.
Timothy Moore of Purdue, William Olney of Williams College, and Benjamin Hansen of the University of Oregon show that imports are a key driver of overdoses in the U.S., even after accounting for other factors such as general demand for opioids, geographic differences in “deaths of despair,” the effects of OxyContin marketing, and proximity to Mexican or Canadian borders. They estimate that fentanyl smuggled via legal imports killed between 15,000 and 20,000 Americans per year from 2017 to 2020, accounting for 30% to 40% of annual opioid deaths. Furthermore, they find that imports from Europe and South and Central America are driving overdoses, with weaker evidence that fentanyl is also coming from Canada. There was little evidence that fentanyl is being smuggled from China or Mexico, “perhaps because of enhanced efforts to screen imports from these countries and/or smugglers are aware of this scrutiny and are using other smuggling routes.” The authors suggest that the government devote more resources to customs screening: a reduction in the relationship between imports and fentanyl overdoses by 20% would save 3,000 to 4,000 lives per year and be valued at around $30 billion or $40 billion, which exceeds the entire 2023 U.S. Customs and Border Protection budget of $15 billion.
As firms adapted to the COVID-19 pandemic, remote work became ubiquitous across the U.S. To examine the effects of remote work on productivity, Natalia Emanuel of the New York Fed and co-authors use personnel data on software engineers at a Fortune 500 company from August 2019 until December 2020. The authors find that proximity to co-workers comes with a tradeoff: remote work increases worker output, especially for more senior employees, at the expense of reducing training opportunities for junior employees. In particular, remote work increased the number of programs engineers wrote by 23% but reduced the amount of online feedback they received by 14%. The tradeoffs to remote work are starker for women, who experienced a 21% larger drop in feedback than their male counterparts. The authors find that proximity has important implications for career progression, dampening pay raises in the short run but boosting them in the long run.
“We need to make the math work better, both for homeownership and renting. But how? Well, subsidizing current prices at a wide scale will only increase demand further, worsening the imbalance with supply. Suppressing demand isn’t an attractive option either. So, that leaves us with the need to increase housing supply. Everyone is struggling with this issue, but we can learn from each other…" says Tom Barkin, President of the Federal Reserve Bank of Richmond.
"While the need for more housing may be obvious to us, it often isn’t to those who don’t want their town to change, or who don’t like the specific change being proposed. They understandably worry about environmental impacts, or infrastructure capacity or school crowding. NIMBYism is real, and failing to secure buy-in from the community adds time, cost and uncertainty. How do leaders rally their communities? They articulate the case for housing. The community needs to see housing as integral to economic growth, and regional leaders need to speak with one voice...They also acknowledge and address legitimate concerns. Cecil County, Maryland, did this by mitigating stress about the area losing its rural identity. It created a development plan that restricted growth to a 'growth corridor' along the freeway, allowing the rest of the county to retain its character.”
