U.S. politics is growing ever-more divided, but don't blame Twitter, Facebook and Google for the partisan chasm.
Older people are less likely to use social media, but they're posting major signs of increased polarization, based on new research. That's our lead item in this week's economic research roundup, which also takes a look at — and links to — studies about U.S. employment, how disability is distributed geographically, global happiness, and inequality in Germany and America.
Check back every week for the latest in interesting and potentially influential research.
Political strife: not an internet story
Social media and the internet probably aren't the root cause of political polarization, based on evidence in a new paper by Stanford's Levi Boxell and Matthew Gentzkow and Brown's Jesse Shapiro.
First of all, it's worth noting that the divide is real. In 1960, only 5 percent of Republicans and Democrats would have been displeased if their son our daughter married outside of their party, but in 2010 that rose to half of Republicans and almost a third of Democrats. The worst of the strife is coming from senior citizens: Americans older than 75 have shown a bigger increase in polarization than their younger counterparts, based on their responses to the American National Election Study. That's relevant because they're much less likely to go online to communicate, with less than one in every five people older than 75 using social media in 2012 versus 80 percent of the 18-39 group.
The finding "rules out what seem like the most straightforward accounts linking the growth in polarization to the internet,'' though "young adults polarized through social media might in turn affect the views of older adults or might indirectly influence older adults through channels like the selection of politicians or the endogenous positioning of traditional media."
Is the Internet Causing Political Polarization? Evidence from Demographics
Published March 2017
Available at the NBER website
No cigar on full employment
The labor market isn't as tight as it appears, based on new research from the San Francisco Fed. After adjusting for demographic changes, the U.S. jobless rate is 0.3 to 0.4 percentage point higher than it has been in past labor market peaks. Once researchers Regis Barnichon and Geert Mesters adjust to account for shifts in the labor force composition, they find that the unemployment rate stands at 5.2 percent as of February, not the 4.7 percent the Bureau of Labor Statistics reports. "In fact, our adjusted rate is higher than all its previous lows since 1976,'' they write.
Three factors have driven the decline in the official number: the baby boom generation's aging, the fact that young workers are getting into the labor force later, and the fact that women are sticking around in the labor force, meaning that they are skipping the spells of unemployment associated with exiting and re-entering the job market.
How Tight Is the U.S. Labor Market?
Published March 20
Available at the San Francisco Fed website
The geography of disability
Disability insurance use is becoming concentrated in the places with the worst economic prospects, based on new St. Louis Fed research. Disability enrollment tends to increase when unemployment rates rises, and that relationship held in the last recession. From 2009 to 2015, however, unemployment dropped and disability insurance payments continued to climb. That surprise increase wasn't evenly spread across the country: disability payouts became more concentrated in the small share of counties with still-high unemployment in 2015. The takeaway is that disability's "rise is not a result of increased hardship on average. Instead, the counties that are doing poorly along one economic indicator — unemployment — now fare even worse along another,'' David Wiczer writes.
The Connection Between Social Security Disability Insurance and High Unemployment
Published March 17, 2017
Available at the St. Louis Fed website
Who is happiest?
The United Nations published the latest iteration of its report on global happiness on Monday, and Norway emerged as the happiest nation in the world, followed by Denmark, Iceland and Switzerland. People in China are no happier than they were 25 years ago despite the nation's rapid economic progress, a fact that researchers attribute partly to the fraying of social safety nets. The U.S., third in happiness among Organisation for Economic Co-operation and Development countries in 2007, had fallen to 19th as of 2016 amid declining social support.
World Happiness Report
Published March 20, 2017
Available on the United Nation's Happiness Report website
How pension wealth changes the inequality picture
Including pension wealth into a measure of inequality makes the distribution in the U.S. and Germany look a little bit more even, new research shows. In the U.S., adding in pensions — including social security, occupational and private pensions — adds about 48 percent to average net worth and in Germany it tacks on 61 percent. It drops the U.S. Gini coefficient, a measure of inequality, to 0.70 in the U.S. from 0.89, and to 0.51 in Germany from 0.77.
Why is this important? It also changes how the countries look comparatively. While U.S. households are wealthier than German households, average net worth looks closer once pensions are added in. "Augmented wealth may give a more accurate picture of the welfare positions of households in different countries than net worth," the authors write.
A Head-to-Head Comparison of Augmented Wealth in Germany and the United States
Published March 2017
Available on the NBER website