Sometimes men and women want different things

Sometimes men and women want different things. Their actions in labour markets are one example of this. That’s OK, even if it results from socially constructed gender roles, so long as it leads to good lives for both genders. One recent example of where this might be the case comes in a new paper studying the mathematically gifted. (Hat tip to Stephen Hsu).

Two cohorts of intellectually talented 13-year-olds were identified in the 1970s (1972–1974 and 1976–1978) as being in the top 1% of mathematical reasoning ability (1,037 males, 613 females). About four decades later, data on their careers, accomplishments, psychological well-being, families, and life preferences and priorities were collected.

Their accomplishments far exceeded base-rate expectations: Across the two cohorts, 4.1% had earned tenure at a major research university, 2.3% were top executives at “name brand” or Fortune 500 companies, and 2.4% were attorneys at major firms or organizations; participants had published 85 books and 7,572 refereed articles, secured 681 patents, and amassed $358 million in grants.

For both males and females, mathematical precocity early in life predicts later creative contributions and leadership in critical occupational roles. On average, males had incomes much greater than their spouses’, whereas females had incomes slightly lower than their spouses’. Salient sex differences that paralleled the differential career outcomes of the male and female participants were found in lifestyle preferences and priorities and in time allocation.

Men and women differed widely on a large number of metrics. Particularly, men, much more than women wanted high pay, risk taking, merit-based compensation and, work involving physical objects. On the other the top three things women valued more than men were, in order: working no more than 40 hours a week, working no more than 50 hours a week, and working no more than 60 hours a week.

It’s OK for people to have different preferences, and it’s OK for those preferences to differ not just within groups but across groups. That’s because satisfying people’s job preferences is what gives them general satisfaction and happiness with their job (shock! horror!) Some people may want men and women to be more alike, and that’s fine, but we should do this keeping in mind the costs that may impose on both groups.

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Bad Signals from DCMS

Yesterday was the final day of a rushed, three week long Government consultation into the elimination of the ‘partial mobile not-spots’ — areas where there’s 2G coverage from some, but not all, of the 4 mobile operators — which cover a fifth of the UK.

The Government now considers such gaps unacceptable, and Sajid Javid has warned that he is prepared to legislate a solution should mobile network operators fail to come up with a satisfactory ‘voluntary’ response.

One of the options the consultation considers is the introduction of national roaming. Via government dictat, mobile operators would be required to enable customers to roam onto a competitor’s network if their home signal were not available.

As the ASI has warned in a submission to the consultation, national roaming would be a terrible idea.

Partial not-spots occur where mobile infrastructure is lacking. To address them we need things like more masts, more powerful equipment and more infrastructure sharing agreements. National roaming does nothing to achieve this, and on the contrary could harm investment and the quality of mobile networks across the board.

A system of national roaming rewards those who’ve invested least in their infrastructure at the expense of those who’ve invested the most. Were it to be introduced, networks could free-ride off the infrastructure of others where their own signal is weak or non-existent, and still ‘provide’ coverage for their customers. Roaming also creates a strong disincentive for any one operator to invest in infrastructure where there’s complete not spots or signal from all 4 operators is weak, as well as reducing the incentive to spend on general repair and upkeep.

Since mobile networks compete predominantly on coverage and the quality of their service, roaming reduces networks’ ability to differentiate themselves. With consumers less able (or less concerned) to judge the quality of an individual network, the return on investment further lessens.

Roaming could also have potentially disastrous consequences for network’s resilience. Were one network to experience an outage, customers would move en mass to alternate networks. This surge in traffic could overwhelm another operator’s infrastructure, leading to a domino effect of failures. This very real risk to critical infrastructure has long been acknowledged as a key argument against a permanent, ‘any to any’ system of national roaming.

For something that wouldn’t actually improve mobile infrastructure and could actually actively threaten it, national roaming wouldn’t come cheap, either. The government’s back-of-the-fag-packet figures put the cost of mandating roaming as between from £276-400m, compared with projected benefits of only £54-249m.

Creating a robust system of national roaming would be a lengthy, expensive, and complex procedure. There’s a very real risk that forcing mobile operators to divert resources towards roaming would result in the slowdown or scaling back of other projects, such as the rollout of 4G. To add insult to injury, consumers would also have to pay for the cost of establishing and operating roaming, even if it makes their service worse than it otherwise would have been.

For all of these problems, national roaming isn’t even an effective solution to partial not-spots. Roaming would be ‘non-seamless’, meaning that calls would be dropped when a phone switches from one network to another. This means that roaming would do very little to help those travelling by motorway or train and going through patchy areas at speed. Calls made where there’s weak signal also risk being dropped when they would have previously stayed connected, and in some areas connection could ‘bounce’ between operators as the phone tries to lock onto the strongest signal.

Roaming would also impact other, surprising elements of consumer’s mobile experience. Roaming on another’s network means that you lose access not only to things like voicemail, but all data services. The practicalities of roaming mean that a phone will probably ‘lock on’ to a network for a few minutes before searching again for a home signal, which means that consumers could be left without internet and other services for a prolonged period of time, despite only experiencing a temporary loss in signal. In addition, a phone which constantly scans for signals and changes networks will deplete its battery far quicker than one locked onto the same operator.

To ask consumers to lose core mobile services and accept diminished handset performance in the name of tackling partial not-spots is frankly absurd. Whilst it may be possible to disable roaming on some devices until needed, the fact that it’s a good idea to do so simply highlights what an enormous waste of time and resources national roaming would be.

Everything so far suggests that introducing national roaming would be a mistake. But when you look at the scale of the problem of partial not-spots, you start to wonder why DCMS even launched this consultation at all.

DCMS point out that 21% of the UK’s land mass is covered by partial not-spots; but they also admit that mobile networks are already working to bring this down. Project Beacon, an infrastructure sharing project between Vodafone and O2 is expected, once completed, to bring this down to 13%, leaving just 2% of premises affected by partial not-spots.

It’s not even clear why the government is so concerned with land mass coverage statistics, anyway. When you look at the percentage of the population with 2G coverage, you see that every operator hits 99%. In addition, spectrum licence obligations mean that 99% of the population will have 4G coverage by 2017 (and developments like voice over WiFI may prove an effective way of  extending coverage and call quality). It’s somewhat misleading, then, to portray a lack of signal as a problem for a significant chunk of the population. Whilst losing signal in rural areas and when travelling can be annoying, it’s millions of miles from clear that it justifies such extensive intervention from the government.

At best, national roaming would bring marginal benefits at great cost. At worst, it would be an expensive, time consuming and potentially destructive disaster. It runs the risk of reducing competition and investment, and sucks for both mobile operators and consumers. Hopefully the consultation will convince DCMS that national roaming is a terrible solution to a problem blown way out of proportion. Certainly, the department would be best to focus on projects that would actually improve mobile infrastructure, such as reform of the inaccessible and outdated Electronic Communications Code. National Roaming is one call that it would be good to drop.



Our visa system is failing international graduate entrepreneurs

The Entrepreneurs Network has just released a new report. Based on a survey of 1,599 international students, Made in the UK: Unlocking the Door to International Entrepreneurs reveals how the UK’s visa system is failing international graduate entrepreneurs who want to start a business in the UK.

Undertaken with support from the Adam Smith Institute and in partnership with the National Union of Students (NUS), we find that a significant proportion of international students – that is students coming from outside the EU – have entrepreneurial ambitions. In fact, 42% of international students intend to start their own business following graduation. However, only 33% of these students, or 14% of the total, want to do so in the UK. Clearly we are doing something wrong.

The Tier 1 (Graduate Entrepreneur) visa was set up in 2012 to encourage international graduates to start their businesses when post-study routes were taken away. However, uptake has been woeful and the results of the survey suggest this isn’t likely to change any time soon:

  • Just 2% of respondents intending to start a business following graduation applied for the UK Tier 1 (Graduate Entrepreneur) visa, with almost two thirds, 62%, saying they didn’t even consider it.
  • Nearly half, 43%, of respondents think their institution is certified to endorse them for a Tier 1 (Graduate Entrepreneur) visa.
  • Only 18% think that the UK has better post-study processes in place for international students than other countries; 32% think it is worse than other countries.

Based on these and further findings, the report puts forward nine recommendations for government, including:

  • Removing the Tier 4 ban on self-employment for those working within an institutional programme (curricular or co-curricular) or other accelerator.
  • Allowing UKTI-approved accelerators to endorse international students in their programmes under the Tier 1 (Graduate Entrepreneur) scheme.
  • De-coupling the risk for educational institutions in endorsing international graduates for Tier 1 (Graduate Entrepreneur) visas from institutions’ Tier 4 license. This should be made explicit in the official Home Office guidance and in the way the Home Office applies its audit procedures for institutions.
  • Reinstating a post-study work visa, de-coupled from the sponsor system, to allow international students to explore markets and industry before finalising their business idea for the Tier 1 (Graduate Entrepreneur) application. In fact, 81% of the respondents considering starting their own business are interested in the possibility of permanent residency under the Tier 1 (Graduate Entrepreneur) visa.

Our visa system isn’t supporting the entrepreneurial ambitions of international graduates. As things stand, we are training some of the world’s best and brightest young people at our world-class universities only to push them to set up their businesses overseas.

Philip Salter is director of The Entrepreneurs Network.

Another reason why Keynesian economics doesn’t work

Let us imagine that this Keynesian idea that government should spend more money in a recession stands. Not that we’d want to give in to the case in general, but let us assume it for the moment. Why might it still not be a good idea to depend upon this tactic? As Larry Elliot explains:

The second drawback is that the investment – even assuming it happens – will take time to arrive. Every EU country has sent in a list of pet projects and these will have to be assessed by a panel of experts before a final list can be drawn up. This is a recipe for bureaucratic delay and the customary horse-trading as each country demands its share of the action. It is unlikely work will begin on a single project until 2016, when what Europe needs is an immediate boost to demand.

That could come in three ways. It could come from a more meaningful push from the centre, perhaps through the European Investment Bank. It could come from nation states if they were given more budgetary leeway by Brussels to run bigger deficits until growth has returned. And it could come from the European Central Bank through a quantitative easing process. The latter is by far the most likely and will dwarf in size what the commission has just announced.

Government, most especially at the EU level, is simply such a lumbering and inefficient giant that it’s not possible for it to get such fiscal stimulus moving in the required timescale. Very much like the American experience of insisting that there were all sorts of “shovel ready” projects out there, then finding that government rules mean that nothing is ever shovel ready. There’s always a year or more of paperwork to fill out before anything can be done.

With us still accepting the basic premise, that the deficit should widen, that there should be a greater gap between tax revenues and government expenditure in a recession, perhaps we should be looking for something that acts near immediately instead of increased spending? Like, say, an automatic reduction in national insurance payments in a recession? Like, umm, Keynes himself said would be a good idea?

Markets make us better people

One of the most common objections to market-based societies is that they erode non-market motivations to doing good. Critics, with this objection, say that although markets can in some areas latch onto greed and turn it to society’s benefit in some areas (“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest”) they can also pervert and corrupt existing motivations in domains where markets are inappropriate.

Consider blood donations: many argue that if you start paying for blood donations then people will stop seeing them as a good deed but as a market activity, and lose their ‘intrinsic motivation’ to give blood. Overall you might get less blood, or less good blood than before, even though you’re now spending money to get it.Back in 2012, Harvard communitarian political philosopher Michael Sandel (famous for his online lectures), wrote a hugely popular book What Money Can’t Buy: The Moral Limits of Markets making roughly these arguments (read a wonderful review here).

These questions are discussed widely, but what’s weird is they tend to be tackled mainly with a priori thought experiment arguments like mine about blood, above, and anecdotes, even though they are empirical questions. We can actually test whether you get less or worse blood when you pay for it! (You don’t) We can test whether people are less pro-social when you add extra market institutions!

A new paper by Björn Bartling, Roberto Weber and Lan Yao, “Do Markets Erode Social Responsibility?”, in the Quarterly Journal of Economics tries to do as much:

This paper studies whether concerns for social responsibility persist in repeated market interaction. We develop a laboratory product market, in which socially responsible behavior by firms and consumers involves incurring additional production costs to mitigate potential negative externalities imposed on individuals otherwise uninvolved with the market.

The data from Study 1, conducted in Switzerland, show, first, that there is a non-trivial share of socially responsible products supplied and demanded in all our market conditions, and that—importantly—the market share of the fair product is stable over time in all conditions.

Second, the socially responsible product, which costs more to produce, sells at a price premium that persists with market experience. In most cases, this price premium increases over time, suggesting that consumers’ willingness to pay for socially responsible products is not eliminated with repeated market interaction. Third, we show that individual-level market behavior is consistent with a preference for positive social impact, though such concerns are heterogeneous.

In other words: markets do not erode existing pro-social motivation; they complement it.