Afternoon roundup

A closing of some of the tabs

First, a set from closing a pile of the week's accumulated stories from the Stuff papers. I wonder whether the people who complain about the absence of real journalism bother reading what The Post and Sunday Star Times have been putting out lately. 

• National's 'tax relief' won't be a tax cut "because the only real cut is a spending cut, anything else is just rearranging who pays what and in which generation."
• "If Health New Zealand can't find doctors, his iwi will." Some of the social services already being provided by Ngāti Toa.
• Andrea Vance asks "How did the cost of moving two schools blow out to more than $400m?"
• Promising work on methane vaccines for cows. Including great context from Dave Frame. [And here's Dave Frame and Adrian Macey over at Business Desk on methane]
• A path from John Birch through to anti-fluoride activism in NZ that runs through ZAP - a group I'd not heard of for at least a decade. Just great stuff from Charlie Mitchell here. 
• Poor response rates in the 2023 Census, and speculation that it might be the last census as we know censuses. 
• This one is just beautifully written. Joe Bennett on a walk up a hill.

  There’s a lot to be said for being a cattle beast. You live with friends. Your food is all about you. You own nothing but an ear tag. And castration frees you from the main source of worry and expense. Admittedly you make one bad journey in the end, but you don’t see it coming, and your mates go with you. And you’re spared the horrors of old age.

And the rest of the tabs. Or some of the rest. I'm drowning here but the computer needs to be rebooted.... 

• One hypothesis on why Google Search doesn't work as well as it once did.
• Another climate stress test, another finding of zero systemic risk justifying RBNZ's continued prudential excursions into climate issues. Unless prudential reg now is meant not to guard against systemic risk and instead starts from assuming that bank directors are idiots and that bank shareholders need to be protected against bad decisions.
• NZ's NPS-UD doesn't go hard enough. British Columbia's enabling apartments up to 20 stories near transit stations. 
• A new (to me anyway) metastudy on workforce diversity. Effects are significant and positive, "but insubstantial."
• "If the government believes making it more difficult to recruit offshore is going to get 50,000 people off the dole they are as deluded as all those who came before them who wanted to believe the same thing. I get the politics. I don't get the economics."
• RBNZ now investigating whether we should have a central bank digital currency.
• The Government really ought to push ahead with the Rule of Two for Medsafe Approvals. It would unlock access to RSV vaccines. Come on......
• Taiwan wants NZ to do more in supporting anti-authoritarianism. I wonder whether we ought to be doing more in supporting scholarships for promising students from the Islands to study in NZ.
• After my Insights column on the Christchurch Cathedral cost-benefit assessment, a reader pointed us to the business case for a major Tauranga city redevelopment project. I'd hope that, if central government is putting money into this, it pushed hard on checking whether the increases in tourism are plausible (and net national rather than within-country diversion). And whatever arguments one wants to have about appropriate discount rates for social projects as compared to infrastructure projects, expect infrastructure spending (like museums) to be portrayed as social investment where the lower discount rate allows a higher NPV for purported benefits. Bit of a Lil Lisa's Slurry problem here. 
  
  
  

Afternoon roundup

The afternoon's worthies:

• Immigration restrictions on spousal work rights are dangerous.
• 28 months jail for tobacco smuggling
• Pseudoephedrine is legal. Now we just have to wait for pharmacies to stock it.
• Really neat stuff on NZ board directors. 
• When Wisconsin school districts got to decide how to pay their teachers, shifting to flexible pay "raised salaries of high-quality teachers, increased teacher quality (due to the arrival of high-quality teachers from other districts and increased effort), and improved student achievement." HT: John Dickson.
• RBNZ's estimates of the neutral interest rate
• Rocket Lab's increasing success in landing US DoD contracts. 
• Ikea is spending just over $400 million to open its NZ shop.

Afternoon roundup

More bits as I clear through the tabs. 

• Kevin Rudd's view on south Pacific security.
• 20,000 hard refusals on the 2023 census, up from 6000 in 2018.
• Andrew Heaton talks with Zach Weinersmith about space settlements.
• General Practitioners really ought to be allowed to prescribe for ADD/ADHD. 
• TVNZ in financial trouble, but still doesn't offer a subscription-version of its streaming offering for those who can't abide the ads. 
• The demographics of Parliament
• Climate Commission recognising potential for carbon sequestration through reinjection in geothermal wells. Excellent. 
• The Gods of the Copybook Headings always slouch up to explain it once more. They've been explaining it in education system results. Good that we're starting to recognise it. 
• If there's a right to be protected from the effects of climate change...
• Infrastructure Commission doesn't mince words on Auckland light rail. 

How do you unbreak an egg?

I absolutely do not envy whoever in an incoming government gets stuck trying to fix the mess Chris Hipkins caused in the polytechs. 

The polytechs had issues before the merger. Some might well have fallen over. That isn't the end of the world. There are other polytechs. The stronger ones would have picked up more students. 

Now they're all mushed together in a dysfunctional centralised structure that possibly can't be unpicked without immediately causing some to implode, making all of it politically fun.  

Consequences of course go beyond the polytechs. The country's going to need trained tradespeople. 

I have no solutions here. But I wish the best of luck to the incoming Minister receiving this hospital pass. 

Afternoon roundup

The tabs...

• Earthquake strengthening costs on one Wellington performance venue have increased from $90m to $182m and now to $329m (Dom, Herald). We have no clue what strengthening the recently quake-designated Michael Fowler Centre and Opera House might cost. Would it be crazy to expect a billion dollars across all three? After $100m more than necessary on a library? All for a town of about 200,000 people where the water pipes are a century-old collapsing mess? It's a good thing Wellington's pretty...
• Mothers of underweight babies below a cut-off get substantial US government support; those just above the cut-off don't. Run the RDD and find no effects of funding on outcomes. 
• NZ's National Party promises non-finance spending two percentage points of GDP higher than Ardern promised in the 2019 Wellbeing Budget. 
• Devastating New Yorker piece on the Ariely / Gino mess. Harvard's Business School is not a serious place. 
• Admin staff at the Auckland Uni law school are substantially happier than faculty. I keep wondering when somebody might set up a union that represents only academic staff. 
• Superb BusinessDesk piece on Sean Colgan, who backed Rako in its fight with the Ministry of Health. And has leant David Seymour a plan for the election campaign. 
• My piece in this past weekend's Stuff papers covers two recent NBER working papers on zero-sum thinking. 
• California's math curriculum is nuts. Unfortunately, this kind of nuttiness is also infecting New Zealand.
• A lot of US voters are confused about whether Robert F Kennedy Jr is Bobby Kennedy. They identify the picture of Bobby Kennedy from the 1950s, the father of Robert F Kennedy Jr, as being Robert F Kennedy Jr. He's aged remarkably well if so; the father would be turning 98 later this year. Every time you learn a little bit more about voters, just be amazed that the world isn't even worse. 
• For six years, NZ had a government that expressed commitment to wellbeing as its highest goal, and yet this. 
• So Sanitarium ran into some supply issues and cut supply to The Warehouse before either Foodstuffs or Woolworths. Which seems more plausible: that the whole thing is a stitch-up by the big supermarkets to get Sanitarium to cut out a low-price potential competitor, with a new grocery regulator watching? Or that the big supermarkets have longstanding contracts where they pay a bit more to have clauses providing greater security of supply? I'd bet on the latter, but nobody else seems to have considered that possibility.

Afternoon roundup

I cannot count the tabs. A pruning:

• Danyl Mclauchlan on the depressing kludgeocratic budget.
• I still don't like that they're subsidising videogames.
• Peter Dunne expects capital gains taxes and wealth taxes to feature in Labour's platform
• V as classic and excellent antifascism
• Officials are looking at a carbon dividend. I sure hope it's in place before the government stops auctioning NZU. 
• A few bits from me on the budget, over at Interest.co.nz
• Hooked on Phonics worked for the UK. An older piece in AEJ: Ec Policy.
• The San Francisco Doom Loop
• New report out, covered at Newsroom, on failings in freshwater management. There still are better options...
• Don Brash is appropriately scathing about housing policy.
• For a new Great Exhibition.
• One advantage of being at a think tank: I can say what I believe to be true. 
• The government still doesn't fully understand that Covid is airborne. No mention of ventilation in the winter health plan. 
• My column in last week's Insights newsletter, on government public health forgetting there's still a pandemic on and turning back to telling us what to eat and drink...

Morning Roundup

The tabs...

• Australia considering changes in governance at the Reserve Bank, including setting a Monetary Policy Committee. Hope that they avoid the errors NZ made around unqualified Board members and ruling out monetary policy expertise on the Monetary Policy Committee.
• Regulations shifting toward open banking are coming. It seems in-principle a good idea.
• Vic Uni's Martien Lubberink with some cautions about attempts to tax bank profits.
• The government's delaying biofuel mandates. That's great, but better would be abolishing them. When tech and carbon prices make them a cost-effective way of mitigating emissions, fuel companies will pick them up to avoid paying for carbon permits. National says it would scrap any mandate - good!
• Jem Traylen at BusinessDesk points to a path through on Three Waters; includes a bit from me on revenue bonds. 
• Canada playing silly buggers with tariff-rate quotas under CPTPP to freeze out NZ dairy. It's going to arbitration. 
• Oliver Hartwich on collapsing education results. 
• Michael Reddell on RBNZ Governor appointments. Bottom line: better to find a Governor that has respect from all the main parties rather than either a short-term extension or reappointing the one who hasn't got it. 
• Geoff Mortlock on Orr's reappointment.
• Immigration NZ's computer systems remain a mess so the backlog in visa approvals gets worse. If that can't be fixed in a hurry, why not just ditch the rule banning non-residents from buying houses so that living here as a non-resident is less bad?

Evening roundup

I was out on leave last week, touring around Lake Taupo with the family, hoping desperately for snow that didn't come. 

We had fun anyway. 

But the browser tabs... a week's worth of emails, and stuff saved up... egads. 

Some worthies as I try to clear six different Chrome instances...

• Wikipedians don't like research on IQ. They're even slowly memory-holing the Flynn Effect.


• Time to end the Canadian Dairy Cartel


• Neat evil DMCA hack: create a fake-dated earlier version of content you don't like, then claim the original is a copy. 


• DevPolicyBlog on reducing remittance costs in the Pacific. I hadn't known that getting money from Oz/NZ to the Islands has some of the highest remittance costs in the world. But it makes sense: NZ is overly enthusiastic about AML, and that's a fixed cost in a small place. 


• John McDermott on the case for another Saturday Night Special. When credibility is lost, getting inflation back under control is costly. The RBNZ forgot its job, and we will all bear a cost. 


• Jem Traylen tries to figure out why the government won't fast-track residence for migrant nurses. There are no good answers. 


• The Australian Therapeutic Goods Administration has approved Moderna's Covid vax for under-5s. Unclear that Medsafe has even started looking at it. 


• The McGuinness Institute maintains an archive of Government Department Strategies. There are 221 operational GDS and 327 archived ones. I did not know there were so many. 


• Frank Newman on a few problems in the government's Three Waters financial modelling. Oh - and the IT systems alone could cost half a billion. 


• I wonder how much income protection insurance premiums are going to go up because of Long Covid risks. Would be fun if cautious mask-wearers could get a discount...


• Survey evidence of misperceptions could just be miseducated guesses. But wouldn't that predict unbiased means?


• The flu-normal sucks.


• New Zealand's defamation law is even worse than I'd thought. Its reach extends to America.


• Prof Beaglehole on Smokefree 2025.


• Three cheers for the three Christchurch councilors who voted against the stadium.


• Infometrics warns inflation expectations look unanchored. 


• Cameron Bagrie warns of a lack of expertise on the RBNZ Board. I remember Suzanne Sniveley telling us at the NZAE meetings that all is fine. 


• This is just lovely. How the world's worst golfer kept getting to play at big golf tournaments. Great fun story. 


• Pandemic-related losses in education. New Zealand did manage to get through the early period with some of the shortest periods of school closure in the developed world. But we're still showing shocking results on literacy and numeracy - though tough to tell whether it's worse than pre-Covid. 


• Russ Roberts' chat with Ran Abramitzky and Leah Boustan was great while we were on our drive back from Taupo. Just such an enormous amount of core data work in that project on immigration and outcomes. Here's Noah Smith with Boustan.

Afternoon roundup

The worthies on the closing of the browser tabs:

• A database of global film subsidies. Remember that the only winning move is not to play. 


• "Somewhat perversely, some local councils and contractors are putting workers back on the shovel, because that way they can get Ministry of Social Development funding to train up six workers – whereas using a diesel excavator would train only one person."


• The latest Neumark metastudy on minimum wages.


• Can't kill a zombie stat. RNZ repeats the dodgy BERL alcohol cost number. So does Stuff. Remember: the $7.8b number is just the old dodgy number from over a decade ago, multiplied by GDP growth over the period. That's it. It starts with a dodgy number, then inflates it using a dodgy method that requires that alcohol cost be a constant fraction of GDP. Me on this in the Dom, a couple years ago. 


• Looks like there are going to be delays to any NZ sanctions regime on Russian-held assets. I really don't know why we have an Overseas Investment Office if they can't even figure out how to do this. 


• Lots of NZ kids don't really know how to write or do math.
• Government is subsidising new boilers for some greenhouses and food processors. There is absolutely no need to do this. Process heat is in the ETS. 

Morning roundup

Today's closing of the browser tabs is also a bit of an inbox roundup. A lot of these wind up being from BusinessDesk's excellent news summaries.

• Tyler Barugh aims to either be the monopoly supplier of milk to Wellington, or to have Wellington Council abolish its antique and unused century-old milk supply legislation. 
• NZ's natural gas shortage has eased a bit, but there's still risk that industrial users will be asked to curb their production if electricity companies need the stuff. Meanwhile, Red Radio worries that NZ's ban on oil and gas exploration isn't tough enough. 
• The Auditor General isn't happy about how the NZ Govt handed out tourism grants. It looks like there was ample opportunity for dodginess given the lack of process.
• Mastery, then innovation.
• Seventy of some 400ish Fellows of the Royal Society of New Zealand have signed an open letter wishing that the Royal Society return to favouring science - and noting that more would have signed on except they said they feared reprisals. Something is deeply wrong with the Royal Society. 
• RBNZ is reviewing its monetary policy remit.
• More on the traditional media (ie Murdoch) using government to strong-arm tech platforms. 
• The government continues to ease official Covid restrictions. My personal restrictions remain in place:
• Wear a solid N95 mask when indoors; wear a decent mask (like my Cactus Outfitters one) when outdoors in more crowded spaces;
• Avoid indoor places that attract unmasked people;
• Prefer places that continue to enforce vax passes, as they will discourage riskier people from attending;
• Do not dine or drink indoors unless very sure that the ventilation is very good indeed.

In praise of tutoring

We all know that JS Mill had some of the world's smartest people as his tutors, including Jeremy Bentham. 

It may be more general among historic geniuses.

Spanning kingdoms and continents aristocratic tutoring had a several-millennia long run. If we fast forward almost 2,000 years we can find Bertrand Russell, one of the undeniable geniuses of the 20th century, who was a classic case of aristocratic tutoring—raised by his rich grandparents, he didn’t even attend school until he was 16, and had a revolving door of tutors to equal Marcus’s. Many of whom were impressive scientists and intellectuals in their own right, e.g., J. Stuart, one of Russell’s tutors, had himself been a student of Lord Kelvin (that “Kelvin”). 

Shame that tutoring like this doesn't scale. 

Morning roundup

The morning's browser tabs:

• Newsroom picks up on BusinessDesk's prior reporting on MIQ ghost rooms. Much credit goes to Cameron Conradie's constant reporting on the numbers. BusinessDesk pointed out that the MIQ system is constantly overwriting its own data so that it is impossible to get, from them, the prior track. I wonder what the Archivist would make of this because it sounds like deliberate destruction of Official Information which may have to have been backed up by a Disposal Authority. Anyway we're losing skilled migrants who rightly view there as being no chance that the government will fix the system, because the government starts by hating migrants and viewing allowing any of their families in as actually being a bad thing. While it is still good to live in NZ as a permanent resident, I could not recommend that anyone try moving here, unless their utility enters negatively into my utility function - and I don't have that kind of utility function. 
• The government is going to run into real problems in maintaining nursing staffing. If I've understood the state of play correctly, nursing salaries in NZ are similar to salaries in the UK but Australia has some of the highest pay rates going for nurses. Training nurses here in a common labour market with Australia can result in outflow. NZ has made up the gap by importing nurses - some from the Philippines, some from the UK. But while there's provision for entry through MIQ for nursing staff, it's still a big constraint. Australia is far richer than NZ and can afford to pay more. It's entirely plausible that the government here is behaving as monopsonist in keeping nursing wages down, but even if that weren't the case there would still be a problem. 
• NZ is importing and burning a lot of coal currently. In one sense, this is not a problem at all: the Emissions Trading Scheme sets a binding cap, the current ETS price roughly doubles the cost of using coal, so any coal that's used is very likely in spots where it would be real expensive to substitute away from. But there are still two more substantial problems. First, some of the coal burning is because Megan Woods banned gas exploration in Taranaki, reducing capacity in those fields. So we're being forced to use a worse alternative because the government set very bad policy. Second, optics. While all that coal is accounted in the ETS, nobody understands the ETS, and seeing coal imports makes people think the ETS isn't working. And that builds pressure for even worse interventions. I wish that National would aim for less political point scoring here and instead be looking to underlying causes. 
• The government is going to be having an inquiry into crypto. I kinda knew what was going on in crypto 3 years ago; that tech is moving crazy fast and keeping up with it would be a full time job. I hope Auckland's Alex Sims helps them out a bit, and I also hope they seek some of the expertise over RMIT. Parliament's Select Committee couldn't figure out how the Uber app works a few years ago. This won't end well unless they get some serious help. 
• NovaVax also looks pretty good. Seems futile to hope it will get evaluated and considered for roll-out here, where dose availability is a binding constraint. We are sitting ducks here if Delta gets out. 
• Environment Minister Parker is holding off on nitrate limits on waterways - for now. I still think cap and trade solutions can get that job done. Report on that will be out soon. 
• The government's reluctance to have effective vaccine mandates for border workers - it's just incomprehensible. There can be practical difficulties that need to be overcome; sending nurses out to worksites over a few shifts could make a lot more sense than trying to get all those workers separately to make long commutes out to places where they can be vaccinated. If compulsion is warranted anywhere in public health, it's in vaccination. There are very real and substantial negative externalities from not being vaccinated - and especially among workers who are at risk of contact. We wind up with a health system happy to ban soda in the hospital cafeteria but that can't manage to get workers vaccinated. It's nuts. 
• Another for the "is government actually evil?" file: The Ministry of Ed refuses to fund a teacher's aide for a special needs student (limited budgets; understandable) but also refuses to allow the parents to privately fund the aide. 
• Industrial policy as casino economics. Do you feel lucky?
• Cuba's health policy successes are wildly exaggerated and based on bad data. Here's hoping that the new revolution brings down the communist dictatorship. 
• Remote work won't work for everything. Face-to-face still matters. Planet Money interviews Enrico Moretti. 
• Not crazy to worry about inflation. But if you have strong opinions about it and you think you're right, well, here's the data series on nominal bonds and here's the series for inflation-protected bonds. If you think inflation is going to go through the roof, make the appropriate play. If you think that everyone else is just way too worried about inflation, take the opposite appropriate play. 

Mom's Time

Dan Hamermesh always takes on the fun projects. 

A decade ago, he did a pile of work looking at returns to beauty. 

Now, he's looking at time-diary data. Here's the abstract from his latest at NBER. 

Using time-diary data from the U.S. and six wealthy European countries, I demonstrate that non-partnered mothers spend slightly less time performing childcare, but much less time in other household activities than partnered mothers. Unpartnered mothers’ total work time—paid work and household production—is slightly less than partnered women’s. In the U.S. but not elsewhere they watch more television and engage in fewer other leisure activities. These differences are independent of any differences in age, race/ethnicity, ages and numbers of children, and household incomes. Non-partnered mothers feel slightly more pressured for time and much less satisfied with their lives. Analyses using the NLSY79 show that mothers whose partners left the home in the past two years became more depressed than those whose marriages remained intact. Coupled with evidence that husbands spend substantial time in childcare and with their children, the results suggest that children of non-partnered mothers receive much less parental care—perhaps 40 percent less—than other children; and most of what they receive is from mothers who are less satisfied with their lives.

After adjustments for education, age, children's age and so on, married mothers spend about 40 minutes more per day in household production than do similar other mothers. But most of that time difference is in non-childcare activities; married mothers spend about 6% more time providing childcare. But their husbands spend a lot of time in childcare as well. Consequently:

Together with the slight amount of additional time in childcare by married women, this suggests that children of married mothers receive over 3 hours per day of care from their parents, compared to about 1-1/2 hours per day that children receive from their single mothers.

The biggest gaps are for children aged 3 to 12; 

Widows differ substantially from other groups of mothers without a spouse in the home:

One sub-group of non-married mothers uses time differently from the others—widows. They account for only four percent of non-married mothers ages 25-54 in the sample, but they show statistically significant differences in the time they spend on various activities compared to other non-married mothers. They exhibit much more home production time than others; indeed, they differ only minutely (five minutes less per day) in this dimension from married mothers. They make up for this extra time by working and sleeping less than the other non-married mothers. Overall, except in their leisure time widows behave more like women with a husband present than do divorcees, separated mothers or those whose spouse is absent.

And marital status has substantial effects on self-reported life satisfaction:

The estimates of the impact of marital status in regressions describing this indicator of life satisfaction are shown in the bottom panel of Table 7. For all four countries the same vectors of covariates that have been used throughout are included. If there is no spouse/partner in the household, the mother is significantly less satisfied with her life—by 16, 43, 23 and 16 percentage points in the U.S., France, U.K. and Italy respectively. There is a very large difference in this measure by partnership status in all four countries. (The effects of being non-partnered are even more significant statistically in ordered probits describing the entire range of responses to the questions about life satisfaction.22) While feeling only slightly more rushed for time than partnered mothers, non-partnered mothers are much less likely to be satisfied with their lives. This difference is essentially unrelated to how they allocate their time across different activities—the results hardly change if the mother’s time allocation is included in the estimating equations.

Note that while the Table 7 estimates adjust for the effects of education (among other covariates), income doesn't seem to be included.  

Hamermesh concludes:

The results suggest that children of non-partnered mothers not only receive less parental time than others. The attention that they do obtain is from mothers who feel more stressed for time and who are less satisfied with their lives, a concatenation of time and possible interest that may on average disadvantage their children even more. Overall, our findings imply the need for even more attention and concern to the difficulties facing children in single-parent households. With non-married mothers in the U.S. being disproportionately less-educated and more likely to be from minority groups than married mothers, this conclusion takes on special importance.

Hamermesh doesn't draw policy conclusions; I expect folks will form them based on their prior preferences. 

Some conservatives may take it as an argument for strengthening families, discouraging out-of-wedlock births, and encouraging marriage counselling over rapid divorce. 

Others might take it as argument for very substantial investments either at school or before school to try to make up for the hour-and-a-half difference in parental time per day. There will be a substantial cumulative difference by the time a child enters school. 

It may not be particularly controversial to suggest that the government's proposed Equity Index, which would replace school decile funding formulas, include marital status as one of the variables. I don't think it's currently in there.

Education departments are weird

So our Joel Hernandez has completed some more work on what's all going on in New Zealand's school system and an Auckland Uni education prof is mad about it. 

Oh well. 

Joel's long term project has been to look at differences in outcomes across students and schools, using the administrative data held in the StatsNZ data lab to adjust for a rather broad assortment of things that students bring with them into the classroom. 

Naive league tables will credit, or damn, schools for outcomes that are largely due to differences in the communities that those schools serve. Getting better measures on outcomes, adjusting for the differences across families that we can see in the data lab, helps. 

Our measures don't tell you what's going on in any particular school, but they do let you know whether a school is doing about as well as expected in the current system given the kids it teaches, or whether it's a place that the Education Review Office might want to go visit to see what's going on. It could be that better-than-expected performance in one school has nothing to do with that school's practices but instead has everything to do with an after-school tutoring club the parents set up - for example. 

Earlier, Joel looked at differences across schools to show that most of the difference in public school performance, by decile, disappears when you account for the differences in the families those schools serve. Piles of low-decile schools showed up as top performers, if you run the stats properly. 

The broader project, which will take some time because lab work is onerous and we only have Joel doing this work for us, will extend to a much broader set of outcomes going beyond NCEA. The Ministry of Ed has like 3000 staff; we have a bit over a dozen staff and we only have Joel in the lab. 

I'm keen to know how different schools vary in stuff like Not In Education, Employment or Training (NEET) status in years following high school completion; tertiary completion; salaries a few years after completing high school; crime rates; benefit uptake - there's a lot that can be looked at. But it'll take a while. We start with one set of data matches and build outward from there, adding things on as we go. 

Anyway, Joel's most recent project looks at whether there are differences in outcomes across state, state-integrated, and private schools. Not many kids go to private school in New Zealand, but private and integrated schools dominate the league tables for achieving University Entrance. 

Because of the cost of private schools, they're mostly going to be attended by kids from richer families. We're still looking at outcomes observable in school data available in the data lab. School data includes every student's performance on every NCEA standard they've sat, and whether they've achieved University Entrance. But it doesn't include data on whether they took up options available in some private schools to attend International Baccalaureate classes instead, or to take the Cambridge exams instead of NCEA. So Joel looked at UE as basis for comparison. 

And remember that the broader project will eventually get to a lot more outcomes. Those take time, and we have one econometrician on the job. 

Joel found that state-integrated schools outperformed state and private schools on University Entrance, adjusting for all the family background characteristics observable in the lab. You can't adjust for everything in the lab, but the stuff you can adjust for, like parents' education, will also be correlated with some of the things you can't observe. 

So, for example, the weight and value parents put on education can matter a lot, but you can't observe that in the data lab. If parents who put the highest value on education will both push their kids harder at home, helping them through, and be more likely to select out of public schools and choose an integrated or private school, then you could be unfairly crediting private schools for effects that come from family background. But, at the same time, if, on average, the parents who put the highest value on education also have high levels of education themselves, then you'll have mopped up some of the effects of "parents value education" by controlling for parents' own education. It isn't perfect, but so long as the unobservables correlate positively with the observables, then you've handled some of that selection issue. 

Or, at least, you've somewhat bounded it. Take a very different area: the persistent arguments about whether unobserved confounds drive the J-curve in alcohol and health. If adjusting for all of the observable health behaviours you can find doesn't do much to reduce the J-curve, and those observable health behaviours are real likely to be correlated with unobservable health behaviours, then it isn't plausible that unobserved confounds are driving the rest. Here, adjusting for the kitchen sink of family background reduced the coefficient on state-integrated schools but hardly got rid of it. You'd need the effects of the unobservables that aren't already mopped up by the observables to be as big as the effects of the observables, and to have driven the selection of private over state schools, to knock out the effect of private schools - and you'd need huge effects of unobservables to take out the effect of state-integrated schools. 

Anyway, here's Auckland Uni Prof of Ed Peter O'Connor on it all:

However University of Auckland Professor Peter O'Connor argues that the focus on UE results alone "reduces the complexity of learning to such a narrow construct that it becomes meaningless".

"As a professor of education, I'd fail my master's students on that. It's a false science," he said.

"There is nothing to suggest that going to a private school means you will be happier, lead a more purposeful life, contribute more to the world, have better relationships with your partner or your children. That in fact your life matters for having been lived.

"You might have better connections, even more money, but that isn't much in the grand scheme of life."

It's kinda funny. We never said anything about happiness, leading a more purposeful life, or any of that. We were just looking at the average effects of integrated and private schools as compared to state schools on university entrance - a metric a lot of people still do care about, and the one that it's possible to check in the lab. We will be broadening to more outcomes in future. 

But I guess if you're a student contemplating doing grad work in education that has any kind of econometrics in it, you probably shouldn't pick O'Connor as supervisor. If he doesn't like whatever numbers you get, he might fail you because he didn't understand the study or the methods. Michael Johnston over at Vic's education department would be a way better choice if you wanted to do it in an Ed department. 

Or, perhaps even better, do it in economics. 

Either way, you can even start with all the code Joel's used to run the data matches - we've got it all up in there freely available for anyone else to build on. There are years and years worth of studies to be done in there, and we've only got Joel. It's basically the best administrative dataset in the world for linking high school students' grades, their family backgrounds, and their later life outcomes. Drop us a line if you're considering picking up on any of this in your thesis work - we're always happy to provide a bit of advice. 

A principled border re-opening

As much as I don't look forward to Avatar sequels, I can't argue against the government's letting the film crews back in. They underwent quarantine, so the entry was safe.

What I do worry about is the process. It seems to get things backwards.

Currently, entry is barred to foreign nationals unless there is a strong economic reason for their coming in. If they meet that threshold, they're quarantined and then allowed to operate. 

But that requires the government to pick and choose among potential visitors and that path is fraught. It also causes a lot of damage: lots of folks on work visas desperate to come home, but unable to.

Lawyer Alastair McClymont has been inundated with hundreds of pleas from migrants desperate to get back into the country along with calls from employers in industries like agriculture who want their managers and workers back. 

"There is a complete vagueness around the rules and an inconsistency in how the rules are being applied. It is just creating mayhem." McClymont said.

"Within the migrant community they're worried about what's going to happen."

"They need to really make a decision and they need to make it very quickly and they need to be very clear about who's going to qualify and who's not going to qualify."

The principle should be reversed. If you're able to enter the country safely, you should be allowed in (subject to the normal visa stuff that's always applied). Basically it would require showing proof of having a spot at a quarantine facility when you rock up to the ticket counter to board a flight to New Zealand. The government wouldn't have to provide the facilities but would probably want to have an oversight role in certifying them and ensuring compliance. 

What happens under that model? If there are more people wanting to come here than spaces available, prices bid up. If prices bid up, more hotels and other facilities get converted into quarantine facilities. Eventually you hit a point where the cost of bringing the next quarantine room on-stream just outweighs the value of getting here to the next person who wants to come here. Government doesn't have to decide which uses are most economically important; people demonstrate it instead in the usual way - just as we don't have government deciding who should get the next car or computer or anything else.

I've been pleading that the border be reopened to safe entry (testing, quarantine, more testing) in time for students to come here for the July semester. Auckland Mayor Phil Goff also is very keen for international students to be allowed back in. 

Here's me on the AM Show talking about it. If nothing else, my having missed last week's appointment at the barber's because I was home sick may have provided amusing results. 

Otago epidemiologist Dr Michael Baker also agrees:

Otago University epidemiologist Dr Michael Baker said in principle there was no reason why foreigners should not be treated in the same way as returning New Zealanders, who have been allowed into the country on condition that they stay in quarantine for two weeks.

"The current extreme form of management is 14-day quarantine, but there is a reasonable chance that a mix of other measures could shorten that," he said.

It's just so frustrating. In every other area, we desperately hope that sectors can get up to a fraction of what they were at pre-COVID. With international education, there's a strong growth potential - getting students who'd otherwise have gone to the US to come here instead for a normal university experience. 

It's also very frustrating and disappointing on a more personal front.

Since moving to Wellington, we've helped host students attending the Campbell Institute. It's an English language school. Students from overseas can billet with families. In some cases, they pay room and board. In others, like ours, they provide some assistance with childcare before and after school. It's a wonderful programme. 

Campbell had the international connections into schools around Europe and beyond, vetting the students coming here for those who'd be suitable for the demi-pair programme while vetting local families. Our kids get to learn a lot more about the world beyond New Zealand; the students get an immersive English-language experience. We've hosted students from Germany, France and Argentina. 

Last week, the school told host families and students that it will be closing. With no prospect of the border reopening, there's nothing else for it. There's an obvious market niche for this kind of thing, but economies aren't machines - they're organic. This isn't something like replacing a broken cog when it's time for the machine to run again. It's more like cutting down a tree and never quite knowing whether another like it will take its place. Developing the connections and nous to make this kind of business run is hard work. The school only needed to know when it might be able to bring students in again under quarantine. The government's continued dithering killed it. Meanwhile, the government spends billions on make-work schemes.

Some job losses and business failures with COVID are inevitable. International export education could instead be a growth sector. 

Oh the Vogonity. 

Open to minds - reopening to international students

New Zealand's today hit zero new cases of Covid-19.

With appropriate upscaling of contact tracing and rigorous quarantining of newly found cases, it's very possible to see New Zealand largely reopening, at least internally.

The rest of the world remains a problem.

And, sadly, a bit of an opportunity.

New Zealand could wind up being the only place in the world where you can undertake normal university study with lectures and student life.

That presents an enormous opportunity to expand international education. Incoming students would need testing and quarantine, and the system for doing that would have to be rigourous - no stupidity like jumping onto regional flights with other passengers from an inbound international flight. Doing it properly matters.

Reopening to foreign students doesn't just let the universities avoid cutbacks and bailouts, it also helps reboot tourism. We are not going to get substantial amounts of tourism if those coming in have to undergo a fortnight's quarantine. But we could see international students touring the country during their semester breaks rather than going home and having to quarantine again on the way back.

I wrote a short policy note on it last week.

Susan Edmunds covered it in the Fairfax papers:

Chris Whelan, chief executive of Universities New Zealand, said foreign students provided a level of funding that helped make it possible for young New Zealanders to attend universities at discounted rates.

“They also bring broader perspectives, a taste of different cultures and a wider world view to our campuses. International education has massive benefits for everyone.

“As well as reducing the cost of running universities for taxpayers, international students also bring nearly $700m a year of additional spending in sectors such as accommodation, food, entertainment and travel. When international students graduate, most continue to have a relationship with New Zealand personally and promoting it to others for tourism, further education, trade, research collaborations, and in diplomacy,” he said.

“Their presence here is also a key reason why every New Zealand university is world-ranked and can provide every domestic student with a world-class education.

“Welcoming international students back to New Zealand—when the time is right and all risks can be properly managed—would be an opportunity for New Zealand to grow our share of the international student marketplace.”

John Gerritsen also covered it at RNZ:

The chief economist from the New Zealand Initiative, Eric Crampton, said New Zealand's success in containing the Covid-19 outbreak gave it a strong competitive advantage other countries.

"A lot of the rest of the world is looking terrible for students. The universities are providing nothing like the kind of experience they've normally been able to provide, their lectures are shut down ... the night life is going to be shut down, the whole student experience is going to be severely diminished," he said.

"New Zealand will be looking remarkably attractive in that kind of a world. Students who previously might have looked to some of the more prestigious universities in America or in the United Kingdom as places to study will be able to look to New Zealand instead. It's a real proposition."

Crampton said northern hemisphere universities generally enrolled students in August, so New Zealand universities needed to set up a quarantine system so it could take new students in the middle of the year.

"We have to be able to open for the July semester start," he said.

Crampton said it appeared that New Zealand would be able to contain any fresh outbreaks of the disease better than most other countries, and that would be encouraging for many prospective students and their families.

He said there was also the opportunity to attract top staff because many foreign universities had introduced hiring freezes which would leave new PhD graduates with nowhere to go.

"If we prove sufficiently attractive to foreign students that we could start looking to expand our capabilities here, we would have access to a pool of talent that we would probably otherwise not be able to get to come to New Zealand.

"So we've got a real opportunity here but it all requires that the government be ready to start really rapidly processing international student visas and making sure those quarantine facilities are ready."

My column in this morning's Fairfax papers made the case as well.

And that presents some opportunities that should not be missed.

Most obviously, New Zealand should be able to join with others who have largely beaten Covid to re-open borders to quarantine-free travel. Once Kiwis can travel again from Auckland to Invercargill, there seems little reason not to also be able to travel to places like Taiwan – which has been more successful than either Australia or New Zealand in keeping Covid in check. South Korea should also be on the list, along with Singapore when its recent outbreak is back under control.

Doing it right would likely require mutual monitoring of each other’s pandemic testing, monitoring, and containment regimes. That kind of quality assurance would strengthen our systems and help ensure that the larger Pacific bubble could hold. Doing it seems well worthwhile; the OECD has suggested that poor international connectivity underlies part of New Zealand’s weak productivity statistics. Reopening the borders to places no more risky than other parts of New Zealand would help in rebuilding business links and in restarting tourism.

But there is more substantial opportunity, in some areas, for growing beyond what New Zealand had before the pandemic. New Zealand’s “lifeboat” status, when North America, the UK, and much of Europe are in turmoil, could particularly benefit our tertiary education sector. 

And I talked about it a bit in my panel chat with Kathryn Ryan on Nine to Noon this morning as well; that one ranged rather more broadly.

Doing it would require the universities putting up quarantine facilities that pass muster with the local Medical Officer of Health - that should be very feasible. It would also require those students to be able to get here - I expect the universities would need to have a few chats with Air New Zealand about getting a few international flights up in time for it to happen.

But it really really should be done.

Mileage may vary

I wouldn't have expected this. And I couldn't make any sense of it until I saw the line "investments in complements to production" and thought about it for a second. And then it made sense.

The World Bank's released a policy working paper on the effects of cash and in-kind food transfers in Mexico on student learning. Here's the abstract:

This paper studies the medium-term impact of early-life welfare transfers on children’s learning. It studies children who were exposed to the randomized controlled trial of the Mexico’s Food Support Program (the Programa de Apoyo Alimentario, PAL), in which households were assigned to receive cash, in-kind food transfers, or nothing (a control). The children are matched with administrative data on primary school standardized tests, which were taken four to 10 years after the experiment began. The findings show that in-kind transfers did not impact test scores, while cash transfers led to a significant and meaningful decrease in test scores. An analysis of the mechanisms driving these results reveals that both transfers led to an increase in child labor, which is likely detrimental to learning. In-kind food transfers, however, induced a greater consumption of several key micronutrients that are vital for brain development, which likely attenuated the negative impacts of child labor on learning. 

How could a cash transfer to families increase child labour? If the cash enables a rural family to buy more livestock that then requires more on-farm labour from the kids, which reduces the kids hours of schooling and increases their likelihood of attending a lower quality school.

Re-thinking fees-free

Roger Smyth, formerly head of tertiary education policy at the Ministry of Education, writes over at Times Higher Education about New Zealand's fees-free policy:

So how did the first stage in the fees-free policy work out in New Zealand?

Let’s look at the 2018 New Zealand tertiary education enrolments data and compare them with the government’s forecasts for 2018. Those forecasts – based on enrolment trends up to 2017, demographic data and predictions about the labour market – took no account of the fees-free policy. This means we can compare the actual enrolments in 2018 with what was expected in the absence of the fees-free policy. From this, we can estimate the effect on enrolments of the policy change.

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Student enrolments in New Zealand across time

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The actual 2018 outcome is within the 95 per cent confidence interval for the forecast – within the margin of error. In other words, the actual result was in line with what would have been expected in the absence of the fees-free policy. That means there was no statistically measurable effect on enrolments from the change in policy. None at all.

Another test of the impact of the fees-free policy is to look at the population aged 18 and 19 – the age group most likely to be affected – and to ask what happened to their participation rates. Figure 3 above shows the proportion of the population aged 18 to 19 who were enrolled in tertiary education over the past 10 years.

The trend in the participation rate reflects the labour market. Youth unemployment remained relatively high in New Zealand in the years following the global financial crisis. But, as the youth labour market began to strengthen after 2013, the enrolment rate began to drop. Fees have much less effect on enrolments than employment factors. The tertiary participation rate continued to fall in 2018, despite the fees-free policy.

If the government were to judge the success of the policy on how it lifted access to post-secondary education, it would have to give itself a fail grade. The report card might read: “Tried hard but made many basic errors.”

He also notes that if we take seriously survey results from Canterbury Uni, where 5.8% of students said that fees-free was critical to their decision to enrol (and we perhaps might think that an overestimate), it would still mean that taxpayers had to fund the fees of 47,000 students to enable 2,700 enrolments across the system in 2018.

Smyth's piece over at Ed Central is also well worth a read.

So how should the government target its spending better?  How should it address problems in access to tertiary education?

An excellent 2018 report, by Ministry of Education researcher, David Earle, is the most comprehensive and rigorous study yet of access to tertiary education in New Zealand. It provides a blueprint for what not to do to address barriers to access.

The study analysed participation in post-school education across an entire birth cohort, using Statistics New Zealand’s integrated data infrastructure, which links anonymised data from the government agencies managing the education, tax, welfare, migration, employment, health and justice systems – data on ethnicity, school performance, school truancy, socio-economic status (SES), parental education, income, occupation and criminal record….

Applying statistical techniques to control for all these variables, Earle has worked out which factors are associated with risk of non-participation in tertiary education at Level 4 or above.

Unsurprisingly, he finds that achievement and performance at school dwarfs other factors.  But after controlling for school performance, some other factors also play a part. For instance, people whose parents have higher qualifications are more likely to enter tertiary education at Level 4 or above. Students who grow up in more deprived neighbourhoods are less likely to enrol, even once other factors are controlled for. Māori are less likely than the general population to go on to higher education, even if they have done well at school. People who use mental health services are less likely to advance to higher levels of education.

However, many of the dozens of other variables tested in this study have no significant influence on participation in higher education once school performance is taken into account.  These include parental income, truancy and family transience.

The inference from Earle’s research is that interventions that target factors shown to be not statistically significant should be quietly set aside. For instance, given that parental income wasn’t found to be significant, interventions directed at lifting participation of young people from low-income families by reducing costs are not likely to work, given current student support policies.  It’s no surprise that a financially-focused access initiative – like the current fees-free policy – had minimal effect on participation.

What this suggests is that access initiatives should focus on lifting school achievement among those groups which the research shows are less likely to participate – those raised in low SES areas, Māori, those whose families have lower educational achievement. The University of Auckland’s StarPath programme, with its emphasis on improving school achievement through changing practices in lower decile secondary schools, is an example of an intervention that targets the right things.

That’s a quite different form of intervention.  It’s not as straightforward as removing fees.  It may take longer.  It might attract less notice and generate fewer votes. But it might just work.

Fees-free

It isn't like they weren't warned that this kind of thing could happen. 

Here's John Gerritsen:

Less than a third of the tertiary students in the zero-fee scheme last year came from decile 1 to 5 schools, Tertiary Education Commission figures show.

Of the 42,227 students in the scheme in 2018, just 12,191 students - or 29 percent - came from schools in deciles 1-5.

Most of the low-decile group, 5052, were enrolled in a university and 4161 went to an institute of technology or polytechnic.

Schools in deciles 9 and 10 accounted for 26 percent of the students in the zero-fee scheme last year.

Fees were never the big barrier to tertiary participation. Not when the government backs heavily subsidised student loans and collects repayments through an income-contingent scheme. The barrier instead is preparation for tertiary study. Instead of wasting billions on further transfers to those likely to wind up among the well-off through no-fee study, Labour could have decided to boost funding at secondary and primary school - figure out what helps in smoothing the path through to tertiary completion. They could have coupled that with means-tested funding in those cases where fees might have been a barrier.

This is, again, one of those very frustrating spots where a lovely well-being rhetoric wraps itself around a vote-buying effort, with zero consideration given to policy assessment, either ex ante or ex post. If the government's action matched its rhetoric, it would have started out by looking for the barriers to tertiary participation and figuring out the most cost-effective ways of getting those out of the way. Failing that, it would have sunsetted the fees-free policy with any re-up depending on its passing evaluation.

Afternoon roundup

The worthies on a very much belated closing of the tabs:

• Nice roundup in Nature on psychology's problems in social priming

  A promising field of research on social behaviour struggled after investigators couldn’t repeat key findings. Now researchers are trying to establish what’s worth saving.

• Somebody is gluing miniature cowboy hats to pigeons in Los Vegas.

  “They look like happy pigeons to me. It is hard to know, of course, because they will not talk to us.”

• This one's more depressing. The Dean of the University of Virginia's School of Education writes a column for the Washington Post on education and education funding. You'd expect the column would be decent, right? The Washington Post is one of the newspapers that seems to be doing well on subscriptions; heck, I pay for a subscription there. And he's the Dean of the School of Education at one of the top universities in the US. But he claims that real per-student education expenditures have been dropping. Corey DeAngelis points to the actual data showing a 36% real increase over the period. This was a couple days ago, and there's as yet no correction at the Post.


• Average is over: geographic segregation edition. An ultra-Catholic community in Kansas. Excellent long-read; the kind of thing I'd have pointed to Denis for Arts & Letters Daily, back in the day.


• Randy Holcombe on Gordon Tullock on inequality and redistribution. Self-recommending. We might note, though, that New Zealand's overall system has been one of the more targeted ones - I wonder how that ranking's been affected by sillier policies like extra free years of tertiary study.

  People can afford to be charitable with their votes when they know their one vote will have no effect on the outcome of an election. This may be Tullock’s most important contribution to the literature on redistribution and inequality—the observation that because of incentives inherent in the political process, people are likely to vote for redistribution programs they would not choose if the choice were theirs alone.
  
  Tullock (1971) anticipates the arguments made by Brennan and Lomasky (1993) and Caplan (2007), explaining how people can vote expressively and even irrationally for outcomes that redistribute more than they privately prefer. This adds a wrinkle to Tullock’s analysis of motives and justifications for redistribution. Tullock (1997) dismisses justifications for redistribution and looks at motives—the desire to receive transfers, the wish to help the poor, and envy—to conclude that government redistribution will not be very effective at helping the poor. But he suggests government redistribution is larger than the median voter would prefer because of the incentives in the democratic political process that cause people to be more charitable in their voting behavior than when considering private charitable giving done individually (Tullock 1971). Perhaps this unintended consequence of democratic decision making renders democratic government a better mechanism for helping the poor than Tullock (1997) recognized.

• When New Zealand's declining PISA scores were released, we heard a lot about how PISA scores don't matter. I rather prefer Australia Labor MP Andrew Leigh's take on Oz's declining scores.

  Forget how we’ve slid relative to other countries -- it’s enough to compare our own students with their predecessors. Year 9 students today score worse than year 8 students would have done at the turn of the century. If this was a sporting contest, we’d be running slower, dropping the ball more often, and missing more goals.
  
  The PISA tests matter because they are designed to capture the skills that young people will need in the workplace. These tests don’t measure memorisation and rote learning -- they aim to capture the essential talents that will be needed in the labour market.

• Kudos Doc Nolan!


• Phil Twyford continues to provide speeches showing he gets housing better than anyone in Parliament. I don't agree with everything in here, but it's good. And we finally now have the infrastructure financing legislation coming through - the Bill has been introduced, and they're expecting to have it done mid 2020. About three years after they came into office. New Zealand's electoral cycles are too darned short given the length of time it takes to get substantial legislation ready.

  I now want to look in a little more depth at housing and land markets, and transport.
  
  I started by saying urban planning has lacked an economic underpinning. An example of this is the use of the urban growth boundary which is a common planning tool ostensibly to stop cities growing outwards, often described pejoratively as sprawl.
  
  Sprawl is often meant as development on the fringes of a city, far from the centre. But I want to make the point that the better way to think of it is in relation to the time value of travel.
  
  If you are building homes let us say in Pukekohe in the south of Auckland, where people who work in the city centre might face a drive of 90 minutes on a bad day, that might be characterised as sprawl. But when we electrify the rail line to Pukekohe, and build an additional line on the main north-south corridor, as we are about to do, those people will have a 30 min express commuter ride into the city, is it sprawl then? I don’t think so.
  
  The most harmful effect of the urban growth boundary where there is rising demand is to create an artificial scarcity of land driving section prices up.
  
  The boundary is much loved by land bankers whose business model is to buy up rural land and sit on it until the local council shifts the boundary in response to growth pressures, changing the zoning from rural to urban, and then sell it sometimes at ten times its former value.
  
  My intention is not to vilify land bankers. Their behaviour is a rational response to bad policy.
  
  If the urban growth boundary wasn’t bad enough, restrictions on height and density, often justified as protecting the amenity of the low-rise garden suburb, ration floor space, stopping the city growing up and restricting the supply of apartments, and of course driving up prices across the market.
  
  Urban planning has too often failed to grasp that whenever rules stop people building or living in places they want to (typically close to amenity, jobs or transport interchanges) they deny people housing choices, restrict supply and drive prices up.
  
  As Ed Glaeser says, every time you place a restriction on intensification you deny a family access to the city.

• More evidence against Sachs's Millennium Villages. Small or null results on core indicators, no spillover benefits.