Thursday, November 20, 2014

Brain Drain Is Economic Development

What I mean when I write "brain drain is economic development" at Pacific Standard magazine.

Theme: Migration and economic development.

Subject Article: "A Cuban Brain Drain, Courtesy of the U.S."

Other Links: 1. "Big cities are dominating the recovery, leaving the rest of America behind."
2. "Cuba’s Talent Export Strategy."
3. "Dublin: the tiger’s roaring tech hub."
4. "Ireland to phase out tax break used by technology firms."
5. "Innovation nation: Show us the money before it's too late."
6. "A Global Role for Universities: Helping Firms Boost Exports."
7. "Era of Dying Places."

Postscript: Brain drain is a firm concern. For example, consider workforce development:

Ireland has been ranked in 6th place among 60 countries in terms of its ability to develop, attract and retain talent for companies. It is also placed in 13th spot in a separate poll on the best places in the world to do business. ... 
... “The best-ranked countries have a balanced approach between their commitment to education, investment in developing local talent, and their ability to attract overseas talent,” said Prof Arturo Bris, director of the IMD World Competitiveness Center. “Countries with smart talent strategies are also highly agile in developing policies that improve their talent pipeline.”

For talent, migration is brain gain. For companies, migration is a loss of intellectual property. Workforce development programs share the view of companies. Talent is developed for the benefit of local companies. In this sense, the interests of business are at odds with the interests of talent. Countries that are pro-business are necessarily anti-talent. Workforce development is nothing more than a public subsidy for private businesses. That's a rotten policy.

Tuesday, November 18, 2014

The Economic Geography of Workforce Development

Brain drain is economic development at Pacific Standard magazine.

Theme: Brain drain boondoggles.

Subject Article: "Retaining Recent College Graduates in Boston: Is There a Brain Drain?"

Other Links: 1. "Location, location, location! Why space matters in demography and why we should care."
2. "Keeping the best minds local."
3. "Income per Natural: Measuring Development as if People Mattered More Than Places."

Postscript: Economist Edward Glaeser wrote, "Retaining talent requires us to fight the regulations that make entrepreneurship too rare and housing too expensive." He's wrong. If you disagree, then read this. I accept Glaeser's conclusion that land use regulation drives up real estate prices. But when Glaeser infers migration patterns from his analysis, he looks foolish. He's over-interpreting his results. I wouldn't care save that others take such statements as policy gospel. Where's the proof that fighting regulation that makes housing too expensive retains talent? The evidence (you know, actual migration research) says otherwise. If you find evidence linking zoning regulations to migration, please share. That would be useful regarding gentrification. Citing Glaeser or other similar work as proof that zoning deregulation would help mitigate gentrification is ignorant.

Monday, November 17, 2014

Concerning Upward Mobility, Geography Is Destiny

At Pacific Standard magazine, the ability to choose one's neighborhood determines the economic destiny of your children.

Theme: Geography of upward mobility.

Subject Article: "The Neighborhood Effect: Localities and Upward Mobility."

Postscript: Migration (i.e. geographic mobility) begets upward mobility:

“My interpretation of these results leads to a focus on pupil aspiration, ambition and engagement. There is nothing inherently different in the ability of pupils from different ethnic backgrounds, but the children of relatively recent immigrants typically have greater hopes and expectations of education, and are, on average, more likely to be engaged with their school work.

“This is not by chance of course. A key point about London is its attraction to migrants and those aspiring to a better life.”

The good professor's interpretation is backed up by this research on birthplace diversity.

Thursday, November 13, 2014

France Is Dying

At Pacific Standard magazine, France can't be dying because France isn't real.

Theme: Brain drain.

Subject Article: "Émigré Matters: Re-Examining France's Brain Drain."

Other Links: 1. "Review: Graham Robb, 'The Discovery of France: A Historical Geography from the Revolution to the first World War'(New York: W. W. Norton and Co., 2007), 358pp. "
2. "Rulers of the territory: Andy Beckett finds out how modern America was built with lengths of metal chain in Andro Linklater's Measuring America."
3. "Bar Mleczny."
4. "Beyond 'Border Guard Bob': Marketing Pittsburgh means much more than just retaining 'knowledge workers,' writes Christopher Briem. We also have to attract them from other places."
5. "Theatre Bizarre casts dark, magical spell at Masonic."
6. "Critical Geopolitics: The Politics of Writing Global Space."

Postscript: Brain drain reconsidered:

“For a city like Philadelphia, which needs to raise the college attainment of its residents to remain competitive and fulfill employer demand, having so many college students in our own backyard is a great advantage and a great asset to leverage,” says Deborah Diamond, Campus Philly president. “At the same time, as the Boston paper accurately points out, the mission and goals of higher eds is to educate students for the world, not the just local labor market, and this is especially true in regions like Philadelphia and Boston where our higher eds draw students from around the world.”

Diamond states the university mission diplomatically. No place can lay claim to any talent. Places don't own people. As long as people develop, what happens to a place shouldn't matter.

Wednesday, November 12, 2014

When Increasing Housing Supply Won’t Lower Rent

The rents are too damn low, thus constraining new housing construction at Pacific Standard magazine.

Theme: Globalization and gentrification.

Subject Article: "Low rents in rural Minnesota stymie new housing."

Other Links: 1. "Does Population Change Drive Demand for Housing?"
2. "5 takes on the rural housing problem in Minnesota."
3. "The Rent Gap."

Postscript: As I hope this post demonstrates, real estate markets are a lot more complicated than the usual platitudes about unleashing supply as a solution to housing affordability problems. Even within so-called rural markets, there is substantial heterogeneity. For example:

Rural counties with a large proportion of "creative-class" workers have tended to recover more quickly from the recession. But "amenity-rich" areas near national parks and other natural areas aren’t doing nearly as well, even though they boomed in the 1990s. ...

... “For the amenity creative class counties, the added human capital endowment provided by workers engaged in skilled, creative activities does not appear to have hastened job growth in recovery,” Wojan writes.

So what’s going on with the amenity-rich counties?

Creative-class counties that don’t have big natural amenities may have performed better because they tend to be located closer to metro areas and may be part of metro “commuting sheds,” the study says. Counties that are rich in natural amenities, on the other hand, tend to be located farther from metro areas – think of Park County, Wyoming (with Yellowstone National Park) or Flathead County, Montana (Glacier National Park).

Another factor is that creative-class counties that were not amenity rich also were more likely to be college or university towns, which can provide some insulation from economic cycles, the study said.

I've highlighted the part of the passage that resonates with my blog post about the rural housing shortage. Small towns and the like that can tap into global jobs (tradable and divergent industries) can afford the rents necessary for new housing construction. Small towns and the like with a jobs base of manufacturing (tradable but convergent industries) cannot. For people toiling in nontradable jobs or tradable convergent jobs, the ideological thrust of deregulating housing construction won't solve the rent is too damn high problem.

Monday, November 03, 2014

Does Population Change Drive Demand for Housing?

A better way to measure housing demand at Pacific Standard magazine.

Theme: Globalization and gentrification.

Subject Article: "Affordable housing and the legit big-city whinge."

Other Links: 1. Brian Kelsey, principle and founder of Civic Analytics.
2. "78704 population didn't change much 2000-2012 but % w/ bachelor's degree or higher increased 37% to 50%. #atxaffordability"
3. "Congratulations, Your City Is Dying!"
4. "Understanding Population Change and Density in St. Louis (UIC & nextSTL @ PXSTL)."
5. "Democalypse 2014 - South by South Mess: Mex Tex."
6. "The Other Side of the Growing Disconnect Between Where You Live and Work."

Postscript: "No Need to Fear a Fall in Population":

But the rate of population does not affect the growth rate of per capita GDP. Here’s a scatter diagram (Graph A) for the OECD (Organisation for Economic Co-operation and Development) member countries over the last forty years showing the average growth rate of GDP per person and the average growth rate of population.  This reveals that and there’s absolutely no correlation between the two. For example, in Mexico, where the average annual growth rate of population was whopping 2%, the annual growth rate for the GDP per capita was only 2%. There is even a country with a negative population growth rate having a growth rate of per-capita GDP at more than 5%.

Population growth does not equal economic growth. Demographic decline does not equal economic decline. Population change does not take the temperature of a regional economy or real estate market.

Wednesday, October 29, 2014

Innovation Geography: The Beginning of the End for Silicon Valley

At Pacific Standard magazine, innovation is increasingly flat (not spiky).

Theme: Economic convergence.

Subject Article: "L.A. tech economy is underrated, venture capitalist Peter Thiel says."

Other Links: 1. "Bay Area growth crisis: 114,000 new jobs created and 7,000 new housing units."
2. "Big tech start-ups bypass Silicon Valley."

Postscript: Whatever you want to call the economic era after manufacturing (if you think there is a successor to manufacturing), I see evidence of convergence. Economic convergence is decline. In less normative terms, convergent economic activity diffuses geographically. Economic activity that used to concentrate in Silicon Valley now happens elsewhere. The world goes from, in Richard Florida parlance, spiky to flat. However, the world still looks spiky, but less so. I'm not interested in the false dichotomy (spiky vs. flat). I'm interested in the trend (spikier vs. flatter or divergent vs. convergent).