« The Weeds

The gender pay gap is mostly about children

2018-02-13

Matt, Ezra, Sarah, and Dylan Matthews try to explain Trump’s budget and Disability Insurance. For today's white paper: Move over Swedish administrative data, it’s Denmark’s turn. Trump’s budget references:Dylan's explainer on Trump's proposed budgetAirports Council International report on the ownership of European airportsCongressional Research Service report on airport privatizationMatt’s explainer on Trump’s infrastructure planDisability Insurance references:Dylan's defense of SSDITerrance McCoy’s pieces on SSDI for The Washington Post: 597 days. And still waiting & After the check is gonePlanet Money / This American Life report on SSDI A Fiscal Crisis UnfoldingStephen Goss’ perspective on SSDI: The Financing Challenges Facing the Social Security Disability Insurance Program Recessions only modestly increase actual awards of disability insuranceExpiring unemployment benefits don’t lead to an increase in disability applicationsWhat it’s like to apply for disability insuranceDemographics explain most of the rise in disability incidence, and it’s not in fiscal troubleDisability insurance explains at most 0.1 percentage points of the decline in male workGender pay gap references:Today’s white paper: Children and Gender Inequality: Evidence from DenmarkClaudia Goldin studyMarianne Bertrand studySarah’s illustrated version of the Claudia Goldin study

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
When I think tried harmony a million years ago, you told me that I was small share of the population who cannot be achieved without outside our efforts that he be I'm playing with his wedding ring hello. Welcome to another episode of the weeds on the box media, Potass network Matthew Glaziers today, if a GM packed up, so we got Sarah close here, we ve got Ezra climb here, but also you were MOUT Dylan Matthew, while we're gonna talk about when we talk about his about those unexcited were excited, will monitor scoop about social security, disability insurance, claiming that actually, it's good,
and also we have a new Trump budget. Dylan is not only a disability maven, but are probably like of the the most informed budget guy. We ve got so let me like a guy anywhere anywhere the only budget experts and I don't created, and we have in a made. We have undoubtedly my favorite research paper we may even had on the weeds. This paper on danish gender wage gaps changed my play as administrative data, and it's really good, but we're gonna talk about gender wage gaps, as is a mixed a really really really interesting new research about where it comes from. I'm excited, I'm pumped, you should be pumped too. But what are we on the budget and I think tat to go through this we go around industry were each can go through like what stood out to us in the budget and Dillon. as the single human being alive. Who knows the most about budgets, gonna start with you after apologized some people at the centre on budgets for cyber inside out and we did it, but I think the man
most so a lot of this with continuous as last year that there is a lot of promises repeal and replace Obama care as a part of that really drastic cuts to medical aid. They introduce some cuts to Medicare this year. I think the most concept sure and least covered part of this- is that there are about forty percent cuts to both this as for disease control and Prevention and the National Institutes of Health, and these are programmes that have wide by, this and support the idea of the government, doing basic research into health sciences to try to discover diseases and trying to model, diseases. So we don't have huge pandemics that kill millions of people seem like areas of of Democratic Republic in agreement But the issue is that they're trying to squeeze out a balanced budget while doing remarkably lit on social security, doing
we were all on medical care and substantially increasing the defence budget and that just doesn't leave a lot of spending left over for everything else, and the federal government and so either. Programs like like scientific research on the non defence discretionary side wind up getting can you one good thing on the stone said the trying to squeeze out a balanced budget, but but you did good thing. He said digging into the tables of this where, as I can tell virtually everything the budget does to get down towards balance is coming from insane economic growth projections and, if you too, he's normal ones. It echoes away, as that is accurate so it's it at the very least, it is dramatically reduces how much deficit reduction they produce. The earliest numbers we ve gotten on this from an unbiased source insight. I don't trust the white. since numbers on this, which is a few years
So I did, and even in the Bush administration I did by the least biased numbers we far from me for a responsible federal budget, more gold wine, their budget walk. Who knows more about budgets than I do came out with a reliable possible if possible, and you did fine some residual deficit reduction, but found that it doesn't change the overall trend. Three of debt to GDP, that, U S, debt to GDP. continues to rise and that of truly of dollars and claim savings, art a mirage caused by assuming that we're gonna get three percent growth. When every forecasters credible assumes we're gonna get somewhere between one. point four in two point: two percent growth Matt? What blew away about the budget and I'm hoping you say, infrastructure, I mean There has been a lot of talk about, don't drop in infrastructure and I think we want to do and infrastructure weak episode in the future
finally, but if we wish say that after two years yours, I would say of discussion of Donald Trump, one trillion our infrastructure plan, this budget, a net cuts, infrastructure spending and how can I keep hearing about a one point? Five turndale industry currently have no idea like it could, because a White House official They did this briefing call over the weekend where they were like we're going to tell you the details of our one point: five trillion dollar infrastructure plan, and then described the two hundred billion dollar infrastructure plan and me I have mine, writers simply agreed to go along with this- and I I don't know why but separately the infrastructure plan, bends two hundred billion dollars, but the rest of the budget cuts more than two hundred billion dollars from funds. So, for example, they assume that the federal Highway Trust fund, which has been running out of money,
will simply be allowed to run out of money, and then there won't be a highway trust fund anymore. I don't it's it's confusing and then the whole problem is regions that are should show that, like yesterday separate from the budget and also separate from the Trump infrastructure plan, a lean chow, the transportation. Terry put over like a memo about how she thinks they should were punish the highway trust fund. So knows what's going on or or what is behind anything, but just like long story short, there is no infrastructure. Keep bending boost plant. Can you break down, though, in the two hundred billion dollar plan, both what's there and how they get to the one point five number. Could I think it's worth? I think we're glad I mean they said: there's two hundred billion dollars once upon a time it seem like they were saying. The two hundred billion dollars, we're gonna, go to like an aggressive Matt, in programme, and that that was gonna leverage up two hundred billion to one point five. to throw you would get yeah help if they would kick them in.
But in the actual plan only half of the two hundred billion dollars even go. tonight, so you would have to assume that one. billion dollars of federal matching grants inspires one point: three trillion of state and local extra spending, but they also say explicitly that they plan to double count: money that state governments were already spending, so? I dont other like. What's the man? Usually, let s do but there's a typical highway programme. The federal government pays eighty percent of the cost and transit programme. They pay. Fifty percent of the cost there talking about flipping it to the feds, are paying twenty percent, or maybe ten percent a really makes no sense. I dont even understand as an exercise. Why,
Try to reason this back to the one point. Five trillion number, because I can other thing in there is that they want to dedicate some money to saying that this is a single private activity bonds, which is where you issue attacks exempt municipal bond, but instead of the money going to like an actual local government, goes to a private company. That's building some kind of peace of infrastructure like a sport stadium, for example, so they proposed to lift the cap on how much private activity bonds you're allowed to do so. That's basically attacks so the headline cost of that tax cuts is modest, and I guess you might want to count the full value of all bonds issued under that as part of the Trump plan. But I don't think that's his bed bath, rightly you're not going to see I, like Quinn, toppling of the number of airports built in the United States by changing the
Tax treatment of airports, you're gonna, give maybe they'll be a little bit more construction, but like it's basically tat. What had also one was not getting. I am on airports. Are they gonna privatized? Oliver airports? They propose privatizing, some airports, Dulles right, Reagan, yeah. Why well. This is international best practices is to have I've been Europe. Most airports is complex. Because, if you look at it most european airports are privatized, which is to say the corporate structure of like the Frankfurt airport is a private company, but the mule get who owns the Frankfurt airport. It's like two german states between them own seventy percent of the shares, and then some of it floats on a private stock market. In Sweden, the Stockholm Airport is privatized when its owned by a state owned entity. That, I think, would be the likely outcome here right. If DC a were privatized, it might be owned
I are linked in county DC and like some pension fund somewhere. Someone like that anyway, That is a more interesting proposals. Then, the one point, five trillion, no infrastructure plan solely in the sense that you could imagine the federal government actually doing it. I think that they probably won't The United States. There tends to be a lot of ideas that free market think tanks cook up are bad for work areas and therefore republican politicians don't actually want to do them, and so they wind up not passing some interim proposals, have that character, but the physically might take away from the budget is the trillion our infrastructure plan. Does one point: five dollar yeah. It still doesn't exist. Sarah cliff maybe I shouldn't be surprised at this, but the return, Graham Capacity, the last or public earlier yeah you know I was surprised by that is that we have this budget that comes out and what are the things that's in it is this plan
that was introduced. Cash like over about a year. and I started to be worked on about a year ago, six to eight weeks ago, everything in time is very nearby Don't don't complain about life is longer than six to eight weeks. So there's the proposal from senators Bill Capacity and Lindsey Gram. That was the last republican Healthcare plan standing, which is how scribe dead, I think in September, or so when they were kind of like that death rattle of on the above care repeal debate. Of course those weren't actually the death rattle of their appeal debate, and I wasn't interested in surprise. Damn you after we really seen Congress Republicans see to throw in the towel on Obamacare appeal and saying you know, we got rid of the end. your mandate essentially is starting to message individual mandate repeal as as
Obamacare appeal and Trump doing that to you know in the state of the union. If you ago he talked about how they got rid of the most terrible part of the affordable care act. Graham cast city is suddenly back in the mix of this budget and am the it one of the key things to know about Graham Cassidy's. It's really a drastic cut to the medicate programme. What it essentially does is it takes all the money that is spent on Obamacare, subsidies on Medicaid roles that up to a big black grant and tell states. Ok, you can pick from a menu of options or just do pretty much whatever you want This amount of money it also cuts the amount- it's not like they're, just taking the subsidies, the medics giving states the same amount with stability, it uses I'm Dylan rights brought about this a little bed in his explain on the budget it uses in pretty slow growth formulas that create pretty drastic cuts. So even you know. We ve already seen a lot of activity from the trumpet
illustration on Medicaid with work requirements with them with above, explore lifetime limits on how long you can be in medicaid- and I think this you know like Dylan, wrote about these budgets. You know there's nothing about this budget. That suggests it is going to become law, but it is a position of power to see as a position of what the Trump Administration thinks is important and it appears from this document. They think it is still important to repeal the affordable, correct and makes them drastic cuts to Medicaid. One of the things it surprised me in the budget was something we didn't have last year, which was changes to Medicare spending which are changes. as far as I can tell that health walks some are more open to, but they are still what You would call in politics, cuts to Medicare indulgent promised you would not have you in there an interesting they actually, some of them taken the Obama. and tradition of this idea of trying to make the programme more efficient member on you know back.
ago, candidate Romney would constantly hit the Obama administration for cutting in a wire, remember the number for cutting seven hundred and sixteen billion dollars for medical care, and he was right. do you know it wasn't a benefits kite. There is no, you know. Doktor point has been cut, but it was a cut that would take place by using the way that doctors are paid to there's some of that going on in the trunk budget, there are some things around the margins with how Medicare pays for drugs that they now I've. Seen says they probably won't moving You know one of the things we saw. Alex's are the new age or just secretary, say recently. Is he felt that we really need to cut the list price of drugs in there, forms proposed in the budget. They are not going to do that, but it is even its Interesting medicate, I think, has been much more fun.
Or ball at an typically is the more vulnerable programme, although I think it's been actually quite resilient in the bombing care debate. But bringing Medicare cuts are never very popular, suits, interesting to see the administration, bring those into the budget, but also, actually you know, following in the footsteps of the above and ministries and all that and how they want to make some of those cuts as what you got. My turn finally withdraw your stuff z those about having had on a lot of the important policy here. I think the one thing we should mention that the Dylan touched on two issues is massive increase to defence spending, which drives a lot of what else happens in the budget I've written before and it turns out. This is not a new observation and be Portman had a long time ago, but that, if you look at the way the federal German spends money, it's basically the world's largest insurance company, but it also has an army
That's what happens and that's where all the money goes, but if you're not gonna cut them. The major major major social insurance programmes, rights to social security and while there are Medicare cuts, are not that big. What and you're going to increase defence spending or what are you left with then so their thriving a knife into what kind of social insurance is left, so there really gutting Medicaid Obama, care food, stamps all kinds of things like that non defensive, discretionary spending, which includes infrastructure. That's why that Kosovo down and that's why they need these crazy economic growth numbers, there's just eight mathematical logic too. If you are not going to hit Medicare Social Security very hard and you're going to rapidly increase defense spending, it is very, very, very hard to get to him which of course it on actually do. But the other thing that I want to know about the budget, which is also within its context, is that this is a really weird budget. So a couple days before the budget on Friday
Donald Trump signed into law. The by partisan budget deal that had come through the house in the Senate that that earlier that week, that was a deal at busted. These budget caps spending caps with living under Fer a number of years now creased us banning of next year's by three hundred billion dollars on a bit more than half that going to defence, I was a deal had by partisan sport had Democrats on it, but we conservatives refers. Who can serve as a really angry about it? There are all these articles. It came up. A conservative publications of the tea party has been repealed by Donald Trump. What's fast standing here, that Mulvaney MIC Mulvaney, who used to be a tea party congressmen, is now trumps, budget director heathen releases budget, which is not like that at all. It's and it's what you would think of as a tea party style austerity budget, even though the
ministration is going in a different direction on a Sunday show that weekend he says if he had been in the house. He would not have voted for the spending deal, so this is a place where the Trump Administration is going in multiple direction. Simultaneously, I mean that there is even weirder stuff if you live, there's a literal contradictions between the spending spending beyond the budget, but I think this is important is that there is John Kelly. The chief of staff is considered to be quite under fire weakened. I don't think he's gonna go very soon, but it is increasingly believe that he is not super long for this administration he's got a lot of enemies. Internally, people are upset at how far is pull trumpet rod and immigration. People upset about the way he controls access to trump produce, given how much that access to jump changes trumps, mind about things so John Kelly's in some trouble when people talk about who might be I'm chief of staff, John Kelly, left Mulvaney is one of the names you always her. Mention he's one of the front runner for that and if Mulvaney becomes Donald Trump Chief of staff and its,
baby whispering in his ear. All the time in one of the reasons his name gets mentioned is mulvaney is good. At talking to tramp tramp likes talking to him. He listens to mulvaney. So then you if somebody who is still very committed to the key Party, fiscal austerity, cut all the social programmes approach to politics being the driving force of what from sees who he talks to what the administrations agenda is, and that could really matter because Trump himself is so fluid on policy and so uninterested in the details that he gets pushed a lotta directions. So there's been talk, you know people going back over lunch, you do take a budget like the seriously What I think you should just take the administrations governing document seriously, but the other is it because mulvaney? I is considered rising power in the administration and could potentially become chief of staff. If the Trump administration was increasingly oriented towards this vision of governance, that would actually be
friend to at least some of what we are seeing now internal different on the margins. What it would empower people like Paul Ryan to prioritize would be interesting, so I thought it was interesting that there was not more effort made to create coherence here. I had a lot of people on the right saying the shows Mulvaney has been weakened, but but I think of it a little bit more like movies holding fire and showing that, Still this is still the agenda, even if this happened followed lately could very much imagine coming in after Keller, after someone else and say or finally were returning back to what we ve always been saying. We were witches tea party conservatism, so I think the politics of it are interesting with that. Let's take a bank and talk about tat disability. Nothing really! Compliments crisp cool winter morning, quite like a nice cup of coffee- and you know mattress any coffee, really delicious, flavorful coffee. That's going to change the way you look at coffee and that's a bluebottle coffee with they now provide the most delicious coffee in the world right to your door.
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India, Maison experience, so hurried, bluebottle, coffee, dot, com, slash wheezing, the ten dollars off your first avi subscription order. It's about a coffee, dot com, such weeds, Lou, bottle, coffee, dotcom, slash, weeds, so one of the debate that has been playing out both in in politics while politics and in the world of policy commentary and pretty the will of policy reporting over the past couple of years. Is it over social security, disability insurance, and- and this is a big programme- quite a lot of americans- want it, don't don't what how many Americans are unnecessary? I there
ten point, six million of whom about eight point, eight million are workers who qualify based on their work, history, the rest herbs or children, spouses who get benefits. So this is a big programme and its become in the past couple of years, a very controversial programme that the programme seem on growth and their been these very big reports, this american life, money did one they've been some of the Washington Post that have looked at the programme seen in it. A hotbed of it might be too strong to say that the word is fraught with. A lot of Republicans have have argued that there is a lot of fraud. What they ve been arguing is it s DE has become a kind of long term. Unemployment insurance becomes something where people who live in islands where there are a lot of jobs. If you could just don't wanna work, they go on ass, the sky and ever get to check from the government, because a mystery
pain or mystery mental illness, and that this has been wrapped up in a very trompe a narrative, a narrative of watching your neighbors. You know get get a government check when you're sitting here work in your but off I it's become a real flashpoint, as he do see, efforts Republicans practically to cut it, but but also its come to symbolise away in which not a social policy but labour policies failing because you ve created this programme where people don't work in order to get us die, and you know this is part of why these white working class communities are ravaged. It's part of why people dislike each other, be because he government has become a hammock, encouraging dependence and Dylan eat. You you have in on this question over the past year and in Britain I think the single best piece I've seen anywhere on this. So what What what is the answer here is, is the eye. What what is it as is the eye, plays and as a narrative that has emerged, get it right sure. So I think the first important
to understand is that the assess part of us, the eye, is super important, that this is a part. the social security system. Unlike some, their programmes for people with disabilities. This is something you have to pay into got to have a significant work history if we stubs or ten years or so before, you qualify for benefits like this, and so it's it's meant to be a social insurance per the same way that old age insurance as well we're going to get old were all at risk of developing a disability that impair their ability to work, and so the ideas you a share of your income and apparel tax into this insurance, and then, if you at a future date, develop a disability that limits your ability to continue working you can claim that money and reduce your work hours or drop out of the workers what I found looking at the date on this. There has therefore been this Baden academia. Parallel to the political debate I want
clear that within academia among people who know things about this programme, like fraud mean something specific. It's like non disabled people or people who quito Red not qualify, trying erroneously to get on- and I dont know single serious person who thinks that the problem that the dispute is over, what kinds of people were severe disabilities can be expected to work and whether to many people with severe disabilities are being put on this programme. Verses expected to work. So there is it a debate that was launched by two economists are one is David Otter, who, I think, people who listen to this part cast of probably was heard of he's, also known for a lot of work on the effects of trade on he and marked again at Stanford. I wrote a paper in the subtitle. Was a fiscal crisis unfolding The warning that this programme, which was growing out of control and their theory, was that it had
something to do with somewhat loosening eligibility standards related to diagnoses that don't lend themselves to objective criteria. So one thing you can get us die for his blindness and if you do you find that your blindness of makes it impossible for you to participate in the labour force. We know how to tell summons, you're? Not it's? There are necessarily some subjective conditions, muscular skull. Two conditions are sometimes get conflated with back pain, but are are much more severe and tend to include things I created. Risks, mental illness likes or severe schizophrenia, bipolar things that really cannot. reduce or eliminate your ability to participate in the workforce, as I think people who know people with conditions like that could tell you, but where diagnosis trickier and so Otter and again they are a hypothesis. Was that
there were listening eligibility standards which lead to a gradual increase in the use of the programme, and that, if you didn't stop this at some point, I was gonna grow. Controlling we wouldn't be able to afford it on the other side of things. Were people like Stephen gas? Is the the chief actuary for this are security administration, I'm a lot of other actuaries worked on the programme who looked at the in the programme and said this is a totally predictable results of a bunch of factors in the labour force over recent years. So one is it. The labour forces aging, as people get older there more likely to develop disabilities and as the baby boomers moved through the h distribution and that's a large chunk of the population grew older. They grew more likely to be disabled, which you would expect, and indeed you sob and the increasing and people using the programme as a result of that. Another factor Is the increase aroma of women in the programme that women
working more means more women have the work history to qualify for this programme, which leads to a greater incidents serve across the population of of disability insurance, receipt and until their story was a demographic story. This is a predictable, effective, aging known for years. That aging is going to cost the government money, as this populations removes first to serve late working years, were disabilities common and then to retirement, and you should expects levels of of enrollment, two of love or or fall after the baby boomers start heading to retirement enough the programme, but then the other thing that happened right is there was a huge recession. Right I mean getting part of. I would say a theme of a lot of the narrative reporting on this, which it
so you from your piece is borne out in the data. Is that disability, as defined and by, as is the eye, is in part like a medical condition, but its import like a macro economic. Phenomenon that goes way further than I would go, so One thing that is a very well documented trend is that there is an increase in applications for us die during economic downturns and sure enough. You saw a large increase in applications after two thousand and eight you see a mild increase and people clarifying and going on, but it's much much much smaller than the increase as a result of the increase in applications. So people and Social Security Administration know that this is going to happen when Wenders recession, they adjust your likelihood of getting on
program files and there is a residual increase, its hard to know much that increase is, is due to the recession versus the recession, putting people who would have qualified anyway in a position where they now want to applying get on the programme, so I think. The idea that its long term on ensuring unemployment insurance programme has an exaggerated and alive quarters and there's a lot of good research suggests that it doesn't operate cleanly that way. Jesse Raw Steen at Berkeley as a really clever study. Looking at the share of people who are applied for disability benefits, after their unemployed
ran out, and we find that there is no increase in disability applications, fur for people who were on long term unemployment and an implied in and then serve it expired, and they did it at some other way to get by that date. There wasn't a leap on effect from that on to dispel the insurance. So it increases applications, it mildly increases receipt, but I really don't think that's the main story, so I actually want to dig into the application process works. I think that's important and I've learned a little bed talking to M p one Kate who have applied for disability who have been denied them, russian I came away with uniform european from my peace is that it can be quite challenging to get disability and I think it's actually important the debate as it speaks of this question. Our people just like showing up getting a Czech early, Is it actually like to apply for disability?
Unlike what were process, are you going to go through sure? So the first thing I know is that there's a waiting period, so if you apply for disability, when you're disability is, is developed. When you, the onset of the disability, you dont get back pay for five months after the onset of your disability, if you're serve as your application is approved. Five months later, so there's some waiting period. Where you have to serve wait out your application and you're not getting money. The other thing to know is that the key thing that, Checking on as part of this application process is whether you can engage in what they call substantial gainful activity or gene, which is this. This really important term. Within this
Building insurance conversations SBA is given amount. Currently, I believe it's eleven hundred eighty dollars a month so really not that much it's it's barely poverty love all mid tens of thousands of dollars a year can make. More than that. You definition we are not eligible because it shows that you're too, though he is not work, reducing to an extent that you need this program. If you can demonstrate that you cannot engage in substantial gainful activity then you might be eligible. So that means that when you're applying, you can't be engaged in substantial gainful activity. If, during those five months, when your applying an and not getting benefits, you can't be working too much because then, by definition, you wouldn't be eligible for this programme. So a lot of the people I talk to you for the story described this period where there are just for waiting around without
out earnings without benefits from the programme and to rely on support from from what Nigger savings they had the mostly from friends and loved ones to thrive, and so it's a early application process and there's a long appeals process for many people's well, that that a small percentage of people get approve on the first go and then a lot of people appeal. and that can take months, if not years that power says in and of itself creates a lot of a lot of issues for people. It creates a period that they have to pay for that they don't have an obvious way to pay for an and people who worry about the effect of the programme. On work, like David Otter, have made the point that the more time you're waiting for your application to be approved, not working, that's honey
are the labor force that makes it harder for you to jump back in. If you get rejected- and so personally because of that in personally, just because even rejected people have serious disabilities, you see the people get rejected are making, on average, like eight to nine thousand dollars a year, which is not substantial, gainful activity. That's below the level that the programme says you have to earn in order to qualify for these benefits These are people got rejected and so you're you're dealing with vulnerable population and a population that remains vulnerable, whether or not they get on the programme or not. So one of the things that this strives to sit sit so couples. you're. One is it. I was really struck by the doubting your piece showing that in the areas ray of high prevalence of of use of the disability programme,
Maps on two areas are very poor health, so it's not just were seeing people who are disabled in those areas, but mortality and heart attacks and all kinds of other things it objective. We show us what health is like there are, showing that these areas have a real real issue. I found that very persuasive. But what they wanted to drill in on here is a little bit of. But what are we trying to achieve because I think there's a container,
this issue in social policy, where Republicans or or just people folks will point out a problem with a programme, and maybe that problem is true, and maybe it is true, but what they always want is for. If you solve the problem, then you ve cut spending, and so there is a lot of people want to cut basically all federal programmes either on defence saying they all want to cut disability insurance, but then cloaking it in these other arguments. Right and in some cases you hear organs, but state flexibility and efficiency in here you get these arguments about we're getting people back into the workforce and something I was struck by reading. Your piece was that if your actual intention was to help people with real disabilities war,
that you could structural programme to do that. But it's not cheaper. It's not just taking disability insurance away from them. It's actually easing their way back into the workforce and supporting them and duties of the things about the huge talk about them below, but because I think this is a place where the conversation gets very confused, We could have more of a social policy effort to try to help people with disabilities work or we could cut disability insurance sharply. But The effort to see the doing the two is the same thing is not true right, so I think it's hopeful for me at least, and think about this thing about the two things that people who want to reform the parameters to do so? One thing you could want to do is reduce federal spending and you can totally its apart the federal budget. If you want to reduce the federal budget, you can cut anywhere
one thing to know there is that the story about demographics and about a gene and about women coming to the workforce turns out to have been largely true. And now the number of people in the programme is falling on the sheriff on the programme is falling faster than in the number of people who are falling on the programme, that's fine and as well lot of that in the long term. The expectation of groups like this are security castration in the congressional Budget Office is it this is going to cost about a constant amount over time. So if the Cbo found that the program cost zero point, seventy eight percent of GDP in twenty sixteen- they projected that in twenty twenty seven it will cost zero point. Seventy eight per cent of GDP, with literally to the hundredth point of the decimal,
cost. So I don't think it's an obvious place to start cutting the federal budget so that we, as the other reason that people on reform this programme, which is that they think there are people on the programme who could work and are working and whatever reason those people, so I don't know situation while enough to know that they would be better off working and so have chosen to beyond this programme, and I'm totally sympathetic to to to help disabled people work and but I think, if you talk to disability advocates an and people serve, who work indirect service provision I wish the barriers are or not disabled people. are like living high on the Haug. The berry are you need home care workers who help you do chores around the house that you are hard freedom, when a really hard for you to do. When you spend time working, you need accommodations at your employer. You need a tight job market because I'm just like all,
their vulnerable populations, arms, like black Americans, disabled people are the last to get higher during recoveries employers to want to take chances on them. You want to offer transportation options, because a lot of disabled people are unable to drive on their own Just like a lot of support that you can offer. You could offer temporary or a partial disability entrance program that supplements wages, but doesn't replace them entirely. But all those things cost money It's really striking to me David order and marked again often argue that the? U S should model disability reform off of something that the Netherlands did in the nineties than anyone had like what I would even say, was a genuinely out of control disability system. There, said something like twelve to fifteen percent of time. Age men were on disability insurance and it was. It was eating out like four hundred and twenty five per cent of their gdp,
they did this crackdown. That looks a lot like Obama, care for disability, insured where they mandated that employers by temporary disability insurance for their workers and and only after that was exhausted. Would people go on the roles and even despite All of that then spends twice as much nearly three times as much on disability benefits as we do and in addition to that they have universal health care. One thing that SD does it gets you on the care? And so, if you get off the program, you lose your Medicare and you are likely uninsured. If you can't get on Medicaid, they have child allowances,
that parents honesty I or parents on disability insurance. If they leave the programme still have a way to support their kids, they have active labour market policies to encourage all people, but especially people people with disabilities to to the the workforce to support them. It's just like a comprehensive cradled, a grave welfare state that will help attached to the labour market. If you need to be- and we don't have that at all and the way the policy discussion is being conducted is as though we're just going to cut this programme, and everything will work out all right and without adding another net to catch people who might be left behind, and I think that attitude comes a lot from the nineties experience with welfare reform, where I think the conventional wisdom and conservative circles was. We cut this cash welfare programme,
And behold, poverty did not explode. There were not children. Freezing Fun Subway grates, the waiting, a Patrick Moynihan predicted, there would be an, and so why not do this for other programmes that we can? We can crack down force people into work? and things work out. I think what we ve learned in your subsequently is that with welfare reform, stuff didn't work out, extreme poverty, explode the share of of single mothers, who don't have any earnings or any welfare payments doubled. The sheriff people earning two dollars a day, cashing come increase. The share of people who are on food stamps, who tell food stamps under like threat of perjury that they have no earnings on, has quadrupled or something like that, and I worry that if you try to do something somewhere with us, die you'd have similar, observe humanitarian calamity.
I think it's also- and I promise is my last points, as I know, if and rambling for awhile. It's also worth putting this. In broader perspective, I think one reason people worried about this program is that men's labor force participation has been falling for decades, so since one thousand nine hundred and sixty seven, the share of men aged twenty five to fifty four who are in the labor force, fell by eight point four percentage points. That seems like a significant problem on his lot of debates about what is that our group was a disability insurance. It does not teams turns, so I'm Jason, firm in front of the programme was on the weeds. Back in the day of former, I had a kindness for the White House. I did an analysis. in that sense, nineteen sixty seven sixty I'd just wouldn't rise at arm, so he soon want to compare them baseline, where there is no growth in the programme and
and the people who were on the programme worked at the same rates that disabled people were not on. The programme worked out. So the ideas you take, these disabled people, you take them off the program. You assume they act like the people who are disabled and are off the programme, and this is a pretty conservative assumption. Since the people were off, the programme are definition we disabled people were more able to work, and so Anything you would expect taking people off this programme that they would work at lower rates. But in any case, if you do that, you see that, as is the eye, can contribute at most zero point. One percentage points so observing one percentage points caused by us die verses, eight point, four percentage points drop or period, so it extremely about one. Eighty fourth of the phenomenon, I so speaking of tat the labour force. We had a white paper that is very much about this this week, and I think you should drive us into its own administrative data, so
Today we love Swedish administrative data here and the weeds bathing Dena should Ministry of Data via my vault into first place because of how much we love this working paper, cynicism, Bert, called children and gender inequality. Evidence from Denmark from Henrik Levin Cameo Land S and Jacob out of hand too strong a halt so good, I believe, and wood. They do is a really interesting, really depressing analysis of the gender wage gap, at least in my view, where they look at Em Danish Administrative Data from nineteen eighty twenty thirteen and they really find it so much of the gender wage gap is. It happens right at the moment when kids are born. Davis amazing chart and hearts are really great for audio, but I will describe it as best I can, where they are Oh using the great thing is they ve all this administrative data? measure, the earnings of men in
in Denmark, and they show what bins to earnings. At the moment, a first child is born and for men, things kind of denote go on on a trajectory they're going on it's a slight upward incline of yours, at this chart for women. There is just a nose dive in earnings that they never recover from one of the other really great charts- and this also compares women who have kids, verses women who don't and the same bang the women who don't have kids. They look really similar to men. They don't really experience a big wage gap. But again you see the two paths, verge at the moment that children are born this meat, so this researchers about Denmark. But it really mirrors, I'm very well a lot of the research on the gender wage gap in the United States. Claudia Golden at Harvard Marian Bertrand at University of Chicago of published, very similar work, showing that what we talk about as a gender wage gap
is increasingly better urge you as a child care penalty or child care wage gap. One of the things they write in this paper is that they find in Denmark that deep, the fraction of gender inequality caused by child penalties and increase dramatically over time from about forty percent and eighty to eighty percent and twenty thirteen. What that means is a nineteen eighty. There were a whole bunch of things that tended to cause a gender wage gap. Women were not pretty Waiting in the labour force is much they were not getting as far in the area. Occasional system. There is more discrimination. and that they were fighting against a lot of seems to have faded away by no means disappeared, particularly on discrimination front, but women now graduating higher rates from education from hydrogen. ten than men do you their increase, we underlying feels that were male dominated the gender. wage gap is
coming more and more so a story about what happens when children are born and the caregiving penalty that women experience and the West I'd say one thing and jumped out at us about this paper is that the researchers from Denmark, a scandal in a country that has very generous leave policy is one where you know we think of you know and as we are talking about this before the show we saying. Oh, if this were the, U S would say well what we need is paid family leave and strong social supports. Denmark has all of that, and yet they still have this this sam, this penalty for town there can, I quote, the part of the paper, the talks with the domestic, such a sports goods, using it's good for setting the context of this over the period we consider their right. Public childcare is universally provided at a heavily subsidized price from six to twelve months after birth, until the child reaches the age or public childcare becomes available theirs.
protected and paid maternity and parental leave up until two thousand and one parents are offered fourteen weeks maternity fell by ten weeks of parental leave to be shared between the mother and father. Since oh two has been extended to eighteen weeks, maternity leave and thirty two weeks of parental leave. They also have heavy subsidies to transportation, the elder care and education, they be universal healthcare system. So this is a true, cradled Grave Scandinavia in style, welfare state in which still seeing this penalty, but I think it's really. I think it's really important to draw some clear lines here, because this too, I was almost unrelated, taking place right, one is that there is a huge earnings hit us, seated with being the primary caregiver for child and the second- is that there is a large gender inequity in
The assignment of who pays that penalty right in this paper visiting way into the conversation in which you're saying the gender wage gap is the issue that we are looking at as though it were investigating. Where does the gender wage gap come from? The gender wage gap comes from the unequal distribution of the parental earnings head and another way of looking at it is like a family policy lends which is like why is there such a severe economic penalty for having children right, because one way to eliminate the gender wage gap would be if you could just like and Emily assigned it so that half of kids have dad's their primary caregiver right, and so that would be good. It would be great for these statistical phenomenon of the gender wage gap. It would not help at all women facing just pure gender discrimination.
workplace, which is like a concern that people have frequently, and it also wouldn't do anything about the fact that this is huge financial penalty associated with having children right, which I think is a social problem that is free standing from the gender inequity piece of it right that, if you look at the United States, if you look at most western countries, people are having children at below replacement rate level of population right and people who are doing the work of having children and raising them that allow society to continue over time are paying like a big net economic price for doing so and trying to alleviate. That is like one good thing to do: but part of what you're, seeing in Denmark is that providing more support for parents doesn't change the fact that most of the parent dean?
and by by women, why does like that this? Just like too, all in all questions here. Why things you have to then to you that as the structure of danish parental leave for getting finally for you now, if this would not be the weeds if we are not getting into the structure of scandinavian parental leave policies, I think one of the things that lets you need about. Denmark's printer, leave is most other scandinavian countries. They kind of saw this house, They saw their giving people generous parental leave and theirs, ok parents, you know you decide how you want to but it up. You know it's kind of a decision for your household engines, we women would just take most not all of the parental leave, it actually in a way it actually exacerbated the gender wage gap, because you saw women out of the workforce for a longer time, because these more generous leave PA sees that they were being exclusively taking advantage of. something you ve seen happen over the past decade or so is more scandinavian countries and started assigning a certain ports.
Their leave just a man, so it's kind of a use it or lose it situation. Iceland is actually on the This done this right now, the way their parental leave policy works. Is women get there a furious heterosexual relationship. Actually, even if your One parents gets three months, the other parent gets three months, and then you have three months to split up between the two of you in Denmark, there is no leave assigned to the male partner, and could take all of the leaving it. It is a lot of leaving we're talking about a year or so, and it's kind of interesting you think of a girl. What are your policy goals? I've been looking at Iceland This policy is a little bit and up slightly for another project and working on in Iceland, they really wanted more gender equality. It wasn't just about you not making sure that kids at a good start. It was about
having women and men have the same experience of parenting when a child is born in Denmark. There have not decided to go. As far as to say, this is important to us and we want to change the norms of parenting through our early policies, and so see. I be really curious to see if someone wants to redo this study with Icelandic Administrative Data, which has not yet grace to the weeds, but one great day, I M sure, will it I. I worry about that. To some extent, I mean, though, that Denmark is one thing. I want is a country that is half the size of her mind and extrapolating from it seems super difficult where fair. I just thought. I think it's interesting to think about new. We often just talk about frontal leave or maternity leave as a thing You know anything that is good, but the details of destruction. Matter. They matter a lot. Do you know them or a lot in terms of what outcomes you're going to get from a parental leave policy. I do think
One thing, though, is interesting in the paper was their proposed transmission policy? Yes, served merely ended the paper, but they found that the work effort of the maternal grandma was an important influence on serve the labour. Applied decisions of of apparent, but the paternal grand There was not a major influence. Basically, I e if your mom worked or not in relation. Peggy till the mothers mom right, yes, the mothers having a baby rat right. So Sir, yes, Oh, you look to your parent for norms, the husbands parents don't appeared a matter all that much, but if the mob, mom took some leave or verses like kept. Working forces have dropped out working entirely that seems to influence really strongly what what her daughter does as mother, which interacts with
interesting way was let Maoist saying about there being sons or fixed cost of parenting that you have to distribute in a way what policies like Iceland's are trying to do is replaced that serve social. We determined MIKE's, division of expertise Sean's around around child rearing on that's serve inherited through the mores of family, with a state dictated, division, that is more gender, egalitarian. And if that happens, one thing that could happen what matters is proposing where he in this graph, you see a big drop in means for women when they have a baby and no corresponding drop for men and so maybe what happens? If you see a drop half that size for each gender in the hypothetical paper after after some policy like that is put in place, but maybe you still
have the effect of those cultural norms and even with some, some heavy sticks to push you in the direction of equality. It remains lopsided or maybe it's way more effective. We would think in both of those curs look smooth and there's no serve drop in, and occur earnings for either gender These norms are so hard to break. one thing that's interesting about Iceland's. You have three months from on three months for dad three months to split the monster. Split just go to the moment when you look at takes leave, so I kind of lean towards unless you, like, literally beat people into changing these norms. They stay very, very similar, I'm gonna, four hundred and twenty two reactionary points to put on the table. When is I'm not going to like go to the bank on this idea? But I think that we should give some credit for the possibility that there is an average, a differential distribution of preferences for spending time with babies versus spending time
work between mothers and fathers. I think I think, will be silly to rule that out of bounds in advance, in particular in light of what we're seeing about the persistence of these kind of childbearing patterns. The other thing that I think it is very important for for. U s liberals to think about is that there is an important social class element to what aspect of family policy in family economics. You really care about right when I talk to sort of my pure parents in DC there, a lot of interest in you know having. It ought also to speak right. People have careers that are important sources of their personal identity and is very important to them too to
cell, in that career, and to make that compatible with with other kinds of them, because they have got to talk to people working in Working class, service occupations, poor parents. That is much less likely to be the case right if you, if you work at sea vs, if you work at Starbucks, if you were cleaning people's houses, if you work taking care of other people's children, would you are much more likely to want out of family policy? Is more economic opportunity to work since spend time with your children. I think you particularly fine that among working class mothers, but even leaving the gender aspect of it aside, rightly the question of is your ideal to like have arranged so that you can be at work whenever you need to be so that you can be a superstar verses. Is your ideal to have it arranged that you can be home whenever you need to be? Right, like there's a real. This real tension there and it's gonna depend
to an extent unlike water you're, like what's your position in the in the class structure of the economy because I mean it you just eat, it makes a big difference it and I think that a lot of the sort of target and messaging run. This is naturally developed by people who are themselves in high status, professional careers and it's important to recognise that most people are not in those kinds of careers, and you know their primary interest may be in fact, in their family is rather than in there, their short of their careers, their working, because they need money? There's an interesting little Philip in the in the paper and forge an imprint this section of it out, but they find that they look at the in Denmark? They say it is well understood in the public sector, provides a really great work environment, but at less pay and kind of less opportunity for four aggressors
we want and what they show is a prior to having children. Many women's interests and in an actual working in the public sector is equal and then, after having children, women become much more likely to than men to work in the public sector, thus implying a trade off first of quality of life work. Flexibility of work supports over can pay an end and advancement, which I think those low betook, do what you're saying that, if you're, if Europe is that, if your priorities begin to shift and just what choice you want to make changes, that's a choice. It is a sort of having at all, but also people want to make different choices. Writer and one question is: how do we? How do we permit that also agree with your initial framing here I won questions. Had you close the gender wage gap? Another question is: how do you just make it not so punitive to have
Children I mean we do have some programs in in American and you see them elsewhere that are direct payments. Two hundred and twenty two parents of children who does not big compared to the cost of having a child. I mean the child tax. Credit is not equal, the cost of childcare you've. Other countries in an donors a lot more about this than I do and then maybe once Japan on it, we have universal child allowances right which are more generous in what we do here, but but but again to dump all the way I think one question is in countries it have pretty declining birth rates. How much
You want to try to work on this as a tool of public policy. How much do you want to try to, at the very least, even out the question of saying you know what having children we consider society valuable work and we're gonna make sure as a country that, if he were not punished for it, so that, at the very least, when you're thinking about that the treasure making is not between earnings children, one could do that. I mean we are rich societies. We have a lot of options here, but to my knowledge, no one is gun that far and trying to make families putting full. side that that the gender differential childcare whole yeah? I think the question around chat allowances is a good one, because I think it highlights the extent to which its inescapable, how governments have to make choices about what kind of families they want to support. So one critique you often hear about it how tax credit and and related policies is even if there really large, I think, maybe the largesses. I think Luxembourg, which is something like four or five thousand dollars per kit,
that still not enough for us care and really expensive city Correct me if I'm wrong map, but I dont think that good could tear four year So, if you really want to help people of for child care, you set up a childcare programme and a lot of scandinavian countries have done that of its typically implemented as pre K with the pre it ended very very long. So you start some kind of education programme when you're like one or two and otherwise have Leaver earthen child. Your policies on their serve free appointed access are heavily subsidized to bridge the gap. but when you are funding that rather than funding to shout allowance, you're saying we value having both parents and a household working and that's the structure may that we're we're trying to subsidize here. I think they're totally legitimate reasons to subsidize that family type
it's more gender, egalitarian. It is more conducive to economic growth, partially that's kind of an accounting thing because serve if you hire a child care worker to watch your kid, that's contributing to the formal economy, whereas if you stay home to watch your kid, that's not but I think like the difficulty in making policy here is having Denmark has a much closer, shared cultural understanding about what what families they want to promote in the very differing conception than the one we have the United States. I think it was an accident than when we came close to getting a universal childcare system in the seventies under under Nixon. He veto and in a veto message. There was written by Papua Cannon those basically It wasn't even in arguing that it was fiscally irresponsible or values money. It was just saying this is the government teaching your children and, and it is a war against stay at home others and in our society. We cannot tolerate
The weeds harry you just done, like I'm tired of gender gap, gibberish how hires is look. what? What's the? U S figures on this local, incredibly similar. So most Thirdly, there's two studies I really like in this area. One is from Claude Gordon Adam Harvard and you can read about a year or so ago, up at this and show now it's a dead, a stick figure version of this talk. She gave at the American Economics Association that I found the most clarifying thing. I've read about why the gender wage gap exists and she is charts in there that really show a very, very similar pattern. They're, not quite as clear as the ones this one, because we don't have the administrative data that markets, but it be solution. The wage gap is very, very small when men and women finish their education, and that a separate study by me Bertrand Chicago found that for MBA? Is, I think,
Women are earning ninety three cents on the dollar to man, which is still a gap, but a pretty small one by time, you got two people getting into their thirty. Is the wage gap is at its biggest point ever, and images incur says Thirty's fortys and in the wage gaps. Drinking. In the end, when women had their fifties and what's happening, then kids are getting out of the house going to college and women seem to be participating. in the workforce in a more significant way, so the pet as identified in this paper. I think if we had the administrative data on the United States, they would look like very similar unit? One of the things we ve talked about a lot is government programmes. I think the flip side of this than a lot of the economists that I talk to think about it, structure of work and how that responds to the facts of we have increasing number of two parent working.
Households, I really like tether, but she wrote a book a few years ago where she writes we, we have this workforce that was a developed with the idea of a silent partner at hull like the workforce. that we will all work in today. A kind of came to be when there is someone to manage all the stuff happening outside of work in it. Really tumultuous as we try, and moving to a universal. We still have very similar hours and structures and expectations, but you don't have that other per and at home. So I think that's also some of this is government. in some of its corporate policy as well like way, if companies decided is worth the trade off to have schedules that accommodate caregiving, because they think they will keep telling people at their company. I think that is a struggle for a lot of companies rate oh and am you do something with the government
has some involvement with with making it a little easier to tender care, giving responsibilities, but also something that rests. In the hands of a lot of private businesses as well, how they want to handle this- and I think, also that is in some ways made more difficult by that the transition to a predominantly personal service. is economy. I think here at at vocs, as it has been a pretty family friendly and invite meant in our chief, Warm Williams, is a mother in, and we have a lot of parents of young kids. Unstuck But we are also in a fairly unusual industry, we don't. By and large, like our output, jesting floats on the internet right and like you, don't need to see like what state of dishevel meant I am in when I write and article if I'm running round or doing something at four a m as I was today or are so I guess you can be very flexible right, but if you are cutting hair
or giving massage is or taking care of the elderly, or you know if you are performing in person services which so many people do as their work. It's challenging to just sort of be like clockwork, flexible as Abbas, collective peep, to be there when the appointments are but a kind of depends or eight like one of the most interesting case, study, I've seen on the wage gap- was pharmacists who at a huge wage gap in the nineteen seven. he's when you got a lot of mom and pop pharmacies stores and basically like that you're saying that If you are not there to open the pharmacy, like tough luck, people can come here so we are taking care of your toddler to get their drugs, but as pharmacies of increasingly become chains, and you know you have severe employing you know her. grids and thousands of pharmacists, you can schedule your hours lot differently, you can kind of sign out like granted. You do. You will have days your kid sick. You have to work round
but their pharmacists. become more interchangeable. It doesn't you don't really care whose giving you your drugs, you just want. Someone at sea, vs in those in that sort of way. You know you can actually see personal service jobs. Moving to re use. There Under wage gaps a little bit faster because the work that is, provided, is less dependent on that exact person being their specific time, verses someone there to drive Gruber someone there to give you a massage or fellow prescription like if you wanna get your hair cut right just to say, like will, the salon has like a big guenaud, efficient hr back end. and the like some body will be there to cut your hair. I think people want the person right saving, then we got into equal what jobs the supply for like were hairstyle is maybe knows much pharmacists more, I don't worry. Grail can do that, there's a lot of jobs. There are, but I just mean it's it's like gets it. I think it's a problem, ladies
It's like they're good solutions to the schedule, flexibility, but there solutions that like work in all key, and it's worth noting that did this place out with the most precarious, The lower wage scale where, while it is a case that a big companies could have the sort of pharmacists like back ends, Actual trends were seeing in the labour market or to this just in time, scheduling where people are even less flexibility. They don't know what they're schedule be for the next week before it happens on their off moved around really aggressively. I mean there's a lot of really you. You could very much of thought. Well, look. We have the internet now in telecommunications, and people can do things over the phone and over Skype, and this can be all kinds of ways to solve this. But in fact, if you look at the lower of the labour market. What you are seeing is less respect for the schedules of a lot of workers, and so by mean
if you're the corporation, to see why that makes sense, but it is not good for for the people, and it is very much not good for this problem right, I'm mad optimistic, sailed out optimistic note. Keep people listening to pack, ass, saint, blossoming blue weeds and get a bat and Sarah they get Dylan forbidden on the show. Today, tar producer, Peter Leonard, the weeds, evokes media. I guess production and you know what I'm excited about from vocs media are due. Podcast sure, yes, I'm so excited for today, land which is launching on President's. Two February nineteenth. If you have not, if you don't happen to know what president's day But how did this coming Monday known as this coming Monday, this coming Monday, listen to the trailer subscribe on Itunes. I think you'll hear that three of the four of us on there China is hosting it it's going to be fine. It's really also guide.
We'd sands. Actually, you can subscribe to it now wherever podcast are subscribe to, and we would appreciate it if you did that raises the rankings makes her more people see it. so good use a go. Look for today explained on Apple pie, cast or reverie get your PA guess you have our personal gain. he about show really is gonna, be great and you should be a lesson and leads only back on Friday, yeah.
Transcript generated on 2021-09-13.