NEWSWIRE: 9/16/19

  • Unmarried women from all socioeconomic backgrounds are facing a shortage of eligible unmarried men, according to a new study. The men who are already married to comparable women have an average income that’s 58% higher than the unmarried men who are available, and are 30% more likely to be employed. (Journal of Marriage and Family)
    • NH: Most discussions of declining fertility focus on across-the-board social forces affecting younger generations coming of age--forces like declining upward economic mobility (relative to parents), the rising opportunity cost of raising children, and growing educational attainment, urbanization, or secularization. The idea is that men and women in each new generation will end up coupling in one form or another and that how many children are born as a result will be determined by overall inclination and economic feasibility.
    • But there is another way of looking at declining fertility. And that is to observe that (a) couples at any age are much more likely to have children if they are married than if they are unmarried, and (b) that marriage rates at all ages have been steadily declining since the early 1980s. This is not happening primarily because people are less interested in marriage or are choosing to marry later. Surveys show that the vast majority of young men and women still want to get married. The biggest reason they offer for why they haven't yet is that "they have not found the right person." "Not ready to settle down" is a much less important explanation. Meanwhile, the share of women who end up remaining never-married at every age continues to rise.
    • In short, there is a widening gap between the share of women who want to marry and those who actually do get married. Just as there is a widening gap between the number of children women want to have and the number they realistically expect have. All this may point to a growing and systemic obstacle to marriage facing younger (Gen-X and Millennial) generations.
    • What might this obstacle be? Many social scientists think they have found it: The declining "marriageability" of men in the eyes of women. The bottom line is that young women are beginning to outperform young men on many measures of and educational and professional attainment and salary. This matters, because even in today's progressive cultural environment, both men and women (in every educational and racial group) overwhelmingly deem high status and the ability to "provide financially for a family" to be more important for a husband than for a wife. Matching these attitudes is the fact that women in all demos tend to marry "up" in terms of education and income. And the fact that low-income women (who today are the least likely to marry) are far more likely than high-income women to cite unavailability of financially stable men as a reason not to get married.
    • This "man deficit" perspective has given rise to several emerging bodies of research and commentary. One (see, for example, Promises I Can Keep: Why Poor Women Put Motherhood Before Marriage) interprets the steep fall in marriage rates in poor neighborhoods as the result of a decline in the economic fortunes of poor men rather than a decline in the cultural values of these communities.  Another (see Men on Strike: Why Men Are Boycotting Marriage, Fatherhood, and the American Dream - and Why It Matters) focuses on all the deep-seated social changes that are driving more men to give up and opt-out. At the shrill extreme, this take merges into the mad-as-hell men's rights movement. (Ready to take the red pill?) Finally, there are more practical guides on how this growing disequilibrium affects women's dating prospects--and what they can do about it. See Date-onomics: How Dating Became a Lopsided Numbers Game
    • The new article by Dan Lichter, Joseph Price, and Jeffrey Swigert is an academic effort to bring the best Census data to bear on this numbers gap. (Go here for a slightly earlier public version, "Mismatches in the Marriage Market"; see also this popular summary in Inc.) First, the authors sort all married women by several variables (age, race, education, income, and so on) and then similarly sort their husbands. Next, they construct "synthetic husbands" for all unmarried women assuming these have preferences similar to those already married. Then they do the same for men. Finally, they match all of the unmarried women to all of the unmarried men--and look at how many are leftover.
    • Lichter et al. find that that there is a considerable excess of unmarried women for (two-way matchable) men in every age bracket over 22--especially for men in their 20s and men in their 50s and early 60s. They also find an excess among men with at least 2-year or 4-year college degrees (but not among grad degrees). And an excess in income brackets over $30K (but not over $125K). Women want men who achieve more than they do--but men, apparently, shy away from women who achieve at the highest levels! See charts below.
    • The authors' findings are provocative and worth exploring further. I would be especially interested in how this marriage-gap has changed over time. Demographers have generally shied away from this topic--mainly, I think, because it offends politically correct sensibilities. This observed mismatch, after all, is premised on unequal gender-role expectations and might be interpreted as suggesting a zero-sum conflict between men's achievement relative to women and their compatibility in marriage. I say, don't start with value judgments. Start with the evidence. And just look where it leads.

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  • Whether they’re 13 or 30, there’s one thing children of adults active on social media have in common: They all complain about “sharenting.” Many report feeling embarrassed and disrespected; some young adults worry what their parents share could be hurting their professional reputation. (The New York Times)
    • NH: Decency, propriety, circumspection, modesty--that's all these Millennial (and Homelander) young people are asking of their out-of-control parents when it comes to social media use. Is that too much to ask? See this NYT video.
  • Japan, one of the world’s most immigration-resistant countries, is increasingly recruiting foreign workers in what amounts to a grand social experiment. The aging nation needs workers, but is welcoming more immigrants with extreme caution amid fears of political and social unrest. (The Wall Street Journal)
    • NH: Most economists postulate that a wealthy aging economy has much to gain from a relationship with a poor young economy. By investing in the young economy, it can get a higher ROR on its capital. And by trading with the young economy, it can buy low-skill or low-capital intensity goods at a lower relative price.
    • Unfortunately, cross-border investment and trade only gets you so far. Much of what a wealthy economy consumes consists of non-tradable services--everything from cleaning and gardening to nursing and driving. Also, if your fiscal system depends on taxing the young to care for the old, importing cheaper products is of limited benefit. To derive the full advantage from the poor economy, the wealthy economy needs to import the poor people--not just the things they make. 
    • This is a good way to think about what Japan is trying to do. Japan has little interest in new citizens. Japan has a long history of discouraging the assimilation of foreigners. This distinguishes Japan--and indeed most of East Asia and much of continental Europe--from nations with a history of high net in-migration rates (for example, the UK, Canada, New Zealand, Australia, and the United States). In the Anglo-Saxon model, immigration is favored for social and political as well as economic reasons. By tradition, they see themselves as diverse, pluralistic, and open-ended. Their political institutions are (within limits) predicated on ideas that transcend a single ethnicity, language, or place of birth.
    • So here is the question: Can Japan thread the needle and find a way to benefit economically from new workers without extending the political or social benefits of real citizenship?
    • We'll find out.  Abe's new program imports people from poorer Asian countries like Vietnam and the Philippines for training and work on a strictly "guest-worker" basis. Workers cannot bring family members, must pass tests in Japanese language and manners, must work under close employer and government supervision, and must return home within five years. The government can dial back the program or terminate visas without notice. In theory, these workers could pass an exam to qualify as permanent residents after living in Japan continuously for ten years. In practice, the five-year "go home" rule will make that unlikely.
    • Having so little contact with immigrants, the Japanese public is supportive so far. Japan is one of the only nations in the world today in which people say they favor more rather than less immigration. Employers certainly support the program. Still, public protests have occurred at locations where these guest workers are being trained.
    • The numbers are ramping up: In 2018, the total number of guest workers was about 160,000 more than the year before. That's still less than half of the U.S. immigration rate. But it is an unprecedented inflow for Japan.
    • If the experiment continues, the biggest crossroads facing the government will be whether to continue imposing strict limits on residency and family members (as the Gulf states do on migrant workers from India). Or whether it begins to allow families to become full immigrants--and if so, on what terms. As Germany discovered with its own postwar guest-worker program for Turkish workers, it's difficult for people to live and work side by side in the same community without basic questions about rights, equality, and citizenship being raised.

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  • Charities affiliated with Big Pharma spent $7.4 billion in 2016, up from just $370 million in 2001. While these charities claim to be helping consumers save money, their payments are ultimately masking the real cost of drugs and helping pharma companies carry off huge price increases. (The Economist)
    • NH: The systematic use of price discrimination by firms with significant pricing power and low marginal production costs is a rising new issue among antitrust economists. A firm engages in perfect or "first degree" price discrimination when it can offer a different price to each consumer based on his or her ability to pay. In theory, every dollar in consumer surplus can be scooped out from under the demand curve and transferred to the firm. Much of the new debate over price discrimination surrounds tech companies that use big data to learn everything about each consumer's behavior--and that then translate that knowledge into a "personalized price" tailored to each buyer.
    • But Big Pharma has long pioneered lower-tech methods of price discrimination. These include, for example, re-importation bans that allow Big Pharma to set radically different prices for the same product in different countries. But the one that has seen the most stunning recent growth is the rise of charities, sponsored by Big Pharma, that help patients "in financial need" pay the cost (either the whole cost or the insurance deductible) of the drugs they need. These charities--each charity is specific to each firm--enable these firms to price specialty drugs at astronomical retail prices and then offer "discounts" based on each consumer's ability to pay. Financial eligibility typically starts at five times the poverty line ($125,000 for a family of four).
    • The key is to maximize revenue while keeping consumers indifferent to any out-of-pocket cost--so, for example, a patient won't bother to replace a brand drug with an equivalent generic. (Medicare and Medicaid wisely prohibit this sort of kickback practice; but private insurance companies are unprotected.)
    • Incredibly, as the author points out, spending by these Big Pharma funded charities has grown 20X over the last twenty years. And they have become a nonprofit behemoth. They now account for half of the 20 largest charities (by spending) in the United States.
    • It's similar, in a fashion, to the higher-ed practice of posting nose-bleed tuition sticker prices and then using FAFSA to assess each family's ability to pay. As with the FAFSA, these charities give Big Pharma a positive PR look by showing how much they "care" about affordability. Better still, the firms are allowed to deduct up to twice the value of their "in-kind charity" from their tax bill. Price discrimination is often like that: It makes you look better even while you're supercharging the consumer--and your own bottom line.
  • A top Hungarian politician recently chided childless people as “not normal” at a recent conference on Europe’s demographic future. Officials’ frustration was evident as they appealed to citizens’ patriotism and framed having more children as a public responsibility. (Financial Times)
    • NH: As we have pointed out (see "Trendspotting: 8/19/19"), pronatalism in many authoritarian-leaning governments isn't just a set of policies--it's a whole religious and nationalist worldview, reinforced by social stigmas and social rewards. "Having children is a public matter, not a private one," announced Laszlo Kover, speaker of parliament, who added that demography is “the most important issue” now facing Hungary. This is the new communitarian populism. Thus does the personal become political.
    • Opponents point out, correctly, that political repression and corruption is pushing some young Hungarians to emigrate, which is depopulating Hungary--and that in any case there is no clear evidence that religious nationalism has worked in any country to raise fertility. (Except perhaps in Israel.) On the other hand, Orban and his cronies can point out, also correctly, that Hungarian fertility has been rising in recent years and that there is no clear evidence that there is any better alternative strategy.
    • A similar incident occurred last week in South Korea, where Jeong Kab-yoon, a member of the conservative opposition Liberty Korea party, was widely condemned after suggesting to Joh Sung-wook, an economics professor, that she had focused on her career at the expense of the country’s birth rate. She has not "fulfilled her duty to the nation," he claimed. No one doubts that South Korea is experiencing a precipitous fertility decline. (See "Trendspotting: 9/9/19.") But it's likely that Jeong's out-of-nowhere condemnation is more a symptom of Korea's problem than a step toward a solution.
  • In the eyes of Berkeley professor Geeta Anand, America’s assisted living industry is selling a fantasy of lifelong self-sufficiency. Aging residents often need substantially more care than these facilities offer—and without more regulation or support for home-based help, she argues, they’re not going to get it. (The New York Times)
    • NH: Despite a near-doubling in the number of U.S. elderly over the last 25 years, the number of nursing home beds has actually dropped over that period of time. Why? Well, since they are heavily regulated, they are very expensive. Since no public program pays for them (except for the Medicaid-eligible "poor"), families have to pay for them out of their own pocket. And since the very idea of entering a nursing home is loathed by today's new generations of elders--initially by the Silent and even more so by Boomers--families will go to extraordinary lengths to avoid them.
    • What's filling the gap? Lots of things. More seniors are finding ways to live in their own homes--with or without home-health care assistance (which is growing robustly). More seniors are living with their families or their friends or their spouses. And, at the affluent end, more are living in assisted-living facilities--an industry which is positively booming.
    • Assisted living is doing so well because it is everything that nursing homes are not. Since these facilities do not need to provide round-the-clock medical care, they are largely unregulated, which saves hugely on cost. And their brand is as positive as the nursing-home brand is negative. Assisted living sells itself as a lifestyle for the active and independent--not for the frail and disabled. Its advertising focuses on "guests," not on "patients." And its amenities are those of the 5-star spa and hotel, not those of the ICU. It perfectly addresses how today's seniors (and their families) would like to see themselves aging.
    • To all this hype, Anand offers a welcome corrective. Yes, for younger seniors and those who are truly active and independent, assisted living often works well. But she points out that the average age of the assisted-living resident (87 years) is older than many imagine and that the majority of residents require help with activities of daily living (ADLs). To quote Anand: "The irony of assisted living is, it’s great if you don’t need too much assistance." Many families are disappointed, she says, and lawsuits are rising.
    • IMO, Anand is right. The assisted-living brand may be over-extended--trying to sell a never-slow-down autonomous lifestyle to a new generation of (Boomer) seniors who will need something different than what they are buying. To fill more of the gap, we should be turning more to more practical home- and community-based care options (which the Japanese excel at). And, inevitably, we need a new model of low-cost, Boomer-friendly institutional care to fill the space between nursing care and assisted-living--something perhaps like the "greenhouse revolution." 
  • Surprise: It’s Generation X that’s leading the way on ESG investing. Though Millennials get more attention for their interest in sustainable investing, interest and activity among Xers—who have much more net wealth—has climbed faster in recent years. (The Wall Street Journal)
    • NH: As a brand, ESG often translates into experience marketing. People today want to feel good about whatever they're doing--and that includes how they're investing their money. Who doesn't want to help save the world while they're saving for their retirement, especially if they're told it won't cost them anything? Few would turn down that offer. Except, of course, if fiduciaries point out that investors may actually be losing out on the deal (as recently happened in a big CALPERS board vote).
    • Yes, portfolios that bear the ESG brand are unquestionably growing as a share of all managed assets in the United States. (The nonprofit Forum for Sustainable and Responsible Investment says it's now 26%.) As a share of all investors, which generation most asks about vetting their portfolios for ESG impact? Millennials. But as a share of all assets, which generation is most invested in ESG? Maybe Gen-Xers, as this article points out. But that's not due to their greater relative interest. That's due to their much greater dollars per investor (3X more than Millennials). And it may even be Boomers. Boomers are only half as likely as Xers to say they follow ESG. But they hold 3X again as many assets per investor as Xers.

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    • For the first time in recent memory, gains in British life expectancy have stalled. For towns and cities already struggling with poverty and health issues, the austerity cuts made after the financial crisis only exacerbated their troubles. (The New York Times)
      • NH: Since 2014, the UK has suffered a slowdown and reversal in life expectancy similar to that of the United States--although not quite to the same degree. As the UK Office for National Health Statistics observes, this recent deceleration in life expectancy has to some extent been observed generally around the high-income world (although a few very high longevity societies, like Japan, show no sign of a slowdown). See my discussion of U.S. mortality trends in "Trendspotting: 12/4/18" and "Trendspotting: 8/12/19." See also the first two charts below.
      • The longer-term drivers are probably also same as in the United States: a slowdown in longevity improvements due to less smoking and better cardiovascular medications (antihypertensives and statins); and a generational shift toward greater suicide, alcoholism, and drug use among the elderly. A recent short-term driver, which has hit the UK hard over the last three years, is one more echo of America: rising opioid addiction and mortality in most adult age brackets, especially males in their 40s and 50s. The opioid death rate is not as high in the UK, but British health authorities seem to be behind the U.S. in enforcing stricter prescription policies. See the last chart below.
      • As for the reporter's claim that the higher death rate is due to recent budget tightening at the NHS and to "Brexit turmoil," this is all just a gratuitous NYT editorial spin. There is no evidence for such a causal link. And if there were, could we expect the NYT to applaud PM BoJo for his promise to hugely up the NHS budget?

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    • A growing number of states and companies are moving to recognize gender-nonconforming Americans. Whether it’s at the DMV or on their credit cards, transgender and nonbinary people have more options to choose alternate gender markers and gender-neutral pronouns. (The Wall Street Journal)
      • NH: I have no problem with Millennials (or Homelanders) opting out of "binary" gender identity in their own social lives. We all live in such a hypersexualized pop culture and brand universe--thanks to all the generations that have shaped America since the 1960s--that young people should be allowed some respite. By all means, relax and be "unspecified" or "nonbinary" for a while.
      • I would, however, draw the line at public recognition of the objective facts that make us who we are. A community can't function without some basic agreement here. I may not "feel" like my chromosome-given gender. By the same token, I may not "feel" like my age, or my city of residence, or my eye color. Still, that doesn't empower me to compel the world to accept a new definition of self simply to suit my own interests. Unless we all decide to put on our VR goggles and pretend not to deal with each other for the rest of our lives.
    • The number of “middle ground” counties in America—areas where presidential candidates win by single digits—fell by 72% in the past 20 years. A comparison of the 1996 and 2016 elections shows that the political middle is disappearing, and the opportunities to target swing voters along with it. (NBC News)
      • NH: The trend toward ideological and political polarization is one that we have covered often on NewsWire. See for example "Trendspotting: 6/24/19" "Trendspotting: 4/8/19
      • The point of this comparison is summarized in the chart below. In 1996, when Bill Clinton ran against Bob Dole, exit polls showed that 1,100 counties voted for one candidate over the other by less than 10 percentage points. In 2016, when Hillary Clinton ran against Donald Trump, only 310 voted for one over the other by less than 10 percentage points.

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    Post-9/11 Vets Bear More Battle Scars. Veterans who served post-9/11 have had markedly different collective experiences—during deployment, combat, and in civilian life—than veterans who served in earlier eras. That’s according to new data from the Pew Research Center. Post-9/11 veterans, who make up about 20% of veterans today, are more likely to have been deployed (77% vs. 58% for pre-9/11 veterans) and served in combat (58% vs. 31%). Given their greater exposure to combat, it’s not surprising that post-9/11 veterans are also more likely to say that they had an emotionally traumatic experience related to their service. Fully 36% say they suffered from post-traumatic stress, compared to only 14% of their predecessors. In addition, post-9/11 veterans are more than twice as likely to say that readjusting to civilian life was difficult (47% vs. 21%). Still, large majorities of post-9/11 veterans—including those who had traumatic experiences or participated in combat—would recommend the military as a career choice.