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This edition was written by Elijah Asdourian, Sam Boocker, Louise Sheiner, and Lorae Stojanovic.
Economists have long grappled with tracking the movement of skilled labor across borders. Using data from more than 450 million LinkedIn profiles from 180 countries, Naser Amanzadeh, Amir Kermani, and Timothy McQuade from University of California, Berkeley show that 4.4% of skilled workers migrate internationally and 38% of migrants return to their country of origin within a decade. The U.S. experiences fewer outflows and return migration rates than average. The authors find that skilled migrants to wealthier nations possess higher skill levels than those who return yet both those who stay and those who return have higher skill levels than those who don’t migrate in the first place. Migration offers substantial benefits to skilled workers, resulting in wage increases of 59% to 204% within just one year.
The No Child Left Behind Act (NCLB) of 2001 increased federal involvement in education by establishing test-based accountability for public schools in every state. In 2015, the Every Student Succeeds Act handed measurement of school success back to individual states after years of resistance to NCLB. Using data on students’ scores and teacher accountability policies from 2011 to 2019, Eric Hanushek of Stanford, Patricia Saenz-Armstrong of ArSaVa Consulting, and Alejandra Salazar of American Institutes for Research find that state control of standards enabled by the 2015 law lowered national achievement. They find that output-based policies--which reward schools based on students’ test scores—help with achievement growth but were partially supplanted in some states by input-based policies that decrease achievement growth, such as paying teachers with advanced degrees more. In aggregate, the shift in policies lowered student achievement growth by 0.02 to 0.025 standard deviation. While these effects are small, the authors argue that “the full impact is likely to grow larger as more states move from output-based to input-based teacher policies.”
Does eliminating work requirements cause welfare recipients to leave the labor force? Jacob Goldin of the University of Chicago and co-authors follow low-income California mothers before and after a 2022 policy change that eliminated the work requirement for the $2,000 refundable Young Child Tax Credit. Lifting the work requirement produced only a “very small” 0.06 percentage point reduction in California mothers’ labor force participation rate. Extrapolating this estimate to the entire United States, the authors estimate that if work requirements were lifted on the federal Child Tax Credit, fewer than 155,000 parents would leave the labor force. Conditioning state welfare benefits on work, the authors conclude, “is unlikely to be an effective means for increasing labor force participation among taxpayers in the state.”
“The battle isn’t over, but we have notched up several important victories along the road to disinflation. We have gone from 10% headline inflation to 2.4%. Core inflation is also falling and is now below 3%. All the indicators are moving in the right direction. We’re not there yet, but the end is in sight. We think we will reach our 2% target in 2025. Looking beyond geopolitical risks, the largest remaining threat stems from inflation in the services sector, mainly driven by wages. But here, too, there is a clear slowdown in the dynamics: wages were increasing at a rate above 5% a couple of quarters ago but were growing at just over 4% in the last quarter of 2023,” says Luis de Guindos, Vice-President of the ECB.
“We have been very clear: if things move in the same direction as they have in recent weeks, we will loosen our restrictive monetary policy stance in June. Assuming there are no surprises between now and then, as you say in French, it’s a ‘fait accompli.’”
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