INFLATION ARTICLE
Today, our education reporter Allie Bidwellwrote aboutthe eternally skyrocketing costs of college textbooks. The report shows that the average college student spends up to $1,200 per year on textbooks, and that costs have grown by 82 percent in just a decade.
[READ: How to Find Cheap College Textbooks]
Everyone knows calculus textbooks are exorbitantly priced. The question is: compared to what? One answer is that textbook costs have gone up compared to everything. When compared to the broader consumer price index for all items economy-wide, textbook prices have grown by three times as much. The consumer price index for all items grew by nearly 27 percent from 2003 to 2013. Meanwhile, the CPI for textbooks shot up by nearly 82 percent.
Compared to basic necessities like food, shelter, and clothes, textbook costs have risen dramatically. And even compared to the cost of medical services, which notably has grown quickly in recent years, textbook prices have grown far more quickly. Below is a chart exploring how textbook costs compare to an assortment of other goods.
Interestingly, tuition and textbooks both have experienced roughly the same pace of price growth over the last decade. And though students are spending extra on their textbooks, they are at least saving money on computers, the prices of which have fallen significantly.
And if students want to feel a bit better about their textbook costs, they need only go to the local gas station. The CPI for gasoline has more than doubled over the last decade – a pace much faster than that of textbooks or tuition. As for two of college students' favorite vices, the results are split: The cost of alcohol hasn't quite kept pace with the broader CPI, but the cost of cigarettes has grown faster than the cost of either textbooks or tuition – both of which are arguably the better investment
GDP ARTICLE
Get Some Sleep, and Wake Up the G.D.P.
FEB. 1, 2014
Inside
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Inadequate sleep can lead to costly decisions, not to mention a lot of mindless web surfing. Miguel Co
Economic View
By SENDHIL MULLAINATHAN
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January is always a good month for behavioral economics: Few things illustrate self-control as vividly as New Year’s resolutions. February is even better, though, because it lets us study why so many of those resolutions are broken.
But a more important question may involve a resolution that so many of us fail to make. It involves a commodity that nearly everybody needs more of, and our failure to address it arguably has as much impact on our well-being as inadequate exercise and unhealthy eating.
The problem is very simple: Many of us need more sleep.
Here’s an alarming statistic: A survey by the Centers for Disease Control and Prevention found that one in 25 people admitted to having fallen asleep while driving during the previous month. To put that in perspective, mathematical models based on this data imply that an estimated 15 to 33 percent of all fatal crashes in the United States might involve a drowsy driver. But even that may be an underestimate, as some people who fall asleep at the wheel may be sheepish about acknowledging as much in a survey.
What does sleep have to do with economics? Doesn’t it sit squarely in the realm of physiology?
First, the economic consequences of inadequate sleep are surely huge. There may be more sleepy workers than drivers. In one month in 2008, a poll showed that 29 percent of workers had fallen asleep or had been very sleepy at work. The effects can add up: one study in Australia calculated the cost of sleeplessness at 0.8 percent of the country’s gross domestic product.
Yet even that number, which emphasizes the physical and medical consequences of inadequate sleep, omits the biggest potential impact on the G.D.P. Most of today’s workers rely on their mental and social skills. And if those workers don’t get enough sleep, their lethargy, crankiness and poor decision-making will hurt the economy in assorted and significant ways.
For example, one study has shown that “cyberloafing” — wasting time on the web — increases on the day after the start of daylight saving time, when people are short an hour of sleep. Other research shows how cognitive performance deteriorates when sleep is inadequate: We have less capacity to remember, to learn or to be creative, and we become less optimistic and less sociable. And these consequences aren’t reserved for extreme sleep loss: Studies show that two weeks of sleeping only six hours a night can have the same impact as one or two nights of total sleep deprivation.
There is an odd divide here. Ask why one person had an unproductive day at work, and lack of sleep often seems an obvious answer. But ask why national productivity has fallen, and reduced sleep can appear to be a frivolous answer. Yet what is total output but the sum of all individuals’ work?
Sleep deserves serious study by behavioral economists for another important reason. Some struggle with medical issues — like insomnia — that make sleep hard. But for many of us, the quantity and quality of sleep come down to a matter of choice. Still, only a few enterprising economists have looked closely at this, and generally those have assumed that we choose our hours of sleep optimally. The idea is that we thoughtfully trade the use of an hour of sleep for an hour spent doing something else. But it is worth questioning the assumption that these are rational and optimal choices. Judge for yourself. Was watching that extra episode of “Game of Thrones” last night worth the sluggishness you’re feeling right now?
We also need to ask another question: Why do we neglect our sleep? It’s not as if the ill effects of fatigue are a surprise. If for no reason other than self-interest, we are vigilant about our children’s sleep, so it’s hard to understand why we are so cavalier about our own. This puzzle is even more pointed because the benefits of sleep are immediate. Eat better or work out more, and you’ll see the benefits weeks, months or years down the road. Sleep more and you’ll see the benefits tomorrow.
The research on this question is sparse, so we must speculate.
Part of the problem may stem from a misunderstanding of physiology. We may overestimate our ability to overcome the effects of sleep deprivation. Have you ever told yourself, “I’ll be tired but I’ll just tough it out”? It’s easy to think that willpower will make us alert. Or we may believe that caffeine compensates for lost sleep. While it can make us more alert, as shown in a study on Navy SEALs, it does not restore all mental function. And it makes sleeping well even harder.
The problem is aggravated by a common belief that lost sleep can be made up for, that we can manage our “sleep debt.” But why should we be any better with this debt than we are with money? When the time comes for a payback, there always seems to be something more appealing for our money or time.
Whatever the reasons, the problem appears to be spreading. One careful study found that the number of “short sleepers” — those who got fewer than six hours of sleep a night — rose 22 percent from 1975 to 2006, a trend that was most pronounced and significant among full-time workers.
Technology is an obvious culprit here. Web searching and cellphone use both flourish in the wee hours. Before the dawn of the web, I would stay up watching television. But there is something soporific about television: I would often nod off. Not so when I’m online. As technologies expand, these problems may only worsen.
We can do something about this in our own lives. It’s not too late to add a resolution for this still-young year: to partake more in what Shakespeare called the “chief nourisher in life’s feast.” A good night’s sleep has immediate effects on our productivity, and, best of all, it can even help us keep our other resolutions.
SENDHIL MULLAINATHAN is a professor of economics at Harvard
UNEMPLOYMENT ARTICLE
Youth unemployment
Generation jobless
Around the world almost 300m 15- to 24-year-olds are not working. What has caused this epidemic of joblessness? And what can abate it?
Apr 27th 2013 | From the print edition
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HELDER PEREIRA is a young man with no work and few prospects: a 21-year-old who failed to graduate from high school and lost his job on a building site four months ago. With his savings about to run out, he has come to his local employment centre in the Paris suburb of Sevran to sign on for benefits and to get help finding something to do. He’ll get the cash. Work is another matter. Youth unemployment in Sevran is over 40%.
A continent away in Athlone, a gritty Cape Town suburb, Nokhona, a young South African mother of two, lacks a “matric” or high-school qualification, and has been out of work since October 2010, when her contract as a cleaner in a coffee shop expired. She hopes for a job as a maid, and has sought help from DreamWorker, a charity that tries to place young jobseekers in work. A counsellor helps Nokhona brush up her interview skills. But the jobless rate among young black South Africans is probably around 55%.
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Official figures assembled by the International Labour Organisation say that 75m young people are unemployed, or 6% of all 15- to 24-year-olds. But going by youth inactivity, which includes all those who are neither in work nor education, things look even worse. The OECD, an intergovernmental think-tank, counts 26m young people in the rich world as “NEETS”: not in employment, education or training. A World Bank database compiled from households shows more than 260m young people in developing economies are similarly “inactive”. The Economist calculates that, all told, almost 290m are neither working nor studying: almost a quarter of the planet’s youth (see chart one).
If the figures did not include young women in countries where they are rarely part of the workforce, the rate would be lower; South Asian women account for over a quarter of the world’s inactive youth, though in much of the rich world young women are doing better in the labour force than men.
On the other hand, many of the “employed” young have only informal and intermittent jobs. In rich countries more than a third, on average, are on temporary contracts which make it hard to gain skills. In poorer ones, according to the World Bank, a fifth are unpaid family labourers or work in the informal economy. All in all, nearly half of the world’s young people are either outside the formal economy or contributing less productively than they could.
Young people have long had a raw deal in the labour market. Two things make the problem more pressing now. The financial crisis and its aftermath had an unusually big effect on them. Many employers sack the newest hires first, so a recession raises youth joblessness disproportionately. In Greece and Spain over a sixth of the young population are without a job (see chart two). The number of young people out of work in the OECD is almost a third higher than in 2007.
Second, the emerging economies that have the largest and fastest-growing populations of young people also have the worst-run labour markets. Almost half of the world’s young people live in South Asia, the Middle East and Africa. They also have the highest share of young people out of work or in the informal sector. The population of 15- to 24-year-olds in Africa is expected to rise by more than a third, to 275m, by 2025.
In rich countries with generous welfare states this imposes a heavy burden on taxpayers. One estimate suggests that, in 2011, the economic loss from disengaged young people in Europe amounted to $153 billion, or more than 1% of GDP. And failure to employ the young not only lowers growth today. It also threatens it tomorrow.
A clutch of academic papers, based mainly on American statistics, shows that people who begin their careers without work are likely to have lower wages and greater odds of future joblessness than those who don’t. A wage penalty of up to 20%, lasting for around 20 years, is common. The scarring seems to worsen fast with the length of joblessness and is handed down to the next generation, too.
The overall ageing of the population might blunt this effect by increasing demand for labour. But Japan’s youth joblessness, which surged after its financial crisis in the early 1990s, has stayed high despite a fast fall in the overall workforce. A large class of hikikomori live with their parents, rarely leaving home and withdrawn from the workforce.
Economists know much less about “scarring” in poor countries. A big study by Richard Freeman of Harvard University and Wei Chi and Hongbin Li of Tsinghua University suggested any impact of joblessness on young Chinese earnings disappears after three years. But studies elsewhere have reported more troubling results. An analysis of the labour market a decade after Indonesia’s financial crisis in 1997 suggested that young people who lost their jobs then were less likely to be in the workforce, and if they were, to have only informal jobs. A study of Argentina and Brazil found that young people who joined the labour force during a recession fared systematically worse as adults.
The damage may be less in dynamic economies and greatest in stagnant ones where unemployment comes in long bouts—as in the swathe of countries around the Mediterranean. Spain, France, Italy and Greece have some of the highest youth joblessness in the rich world. Morocco, Egypt and other north African and Middle Eastern countries have among the worst rates in the emerging world. Though they are at different stages of development, these countries all suffer disproportionately from employment’s main curses: low growth, clogged labour markets and a mismatch between education and work.