Master Life Faster: Newsletter

Why You Should Live in a Big City

Posted in Newsletter by Paul Lem, M.D. on March 3, 2009

Volume 2, Issue 3
SOCIAL: Escaping the ghetto
HAPPY: The power of divorce
WEALTHY: Why you should live in a big city


“I don’t think of myself as a poor deprived ghetto girl who made good. I think of myself as somebody who from an early age knew I was responsible for myself, and I had to make good.”
-Oprah Winfrey

Escaping the Ghetto

Barack Obama visited Canada last week. Police and security forces closed the downtown core of Ottawa and did their best to hold back crowds of excited people. It was a huge event, and rightly so. The first black President of the United States is a historic milestone, especially considering discriminatory voting practices weren’t outlawed until 1965.

Despite this achievement, black people remain significantly under-represented in skilled professions. Although blacks make up 9.9 percent of all workers in the U.S., they hold only 5.3 percent of high-skilled jobs. Why is this?

Economics of Poverty
logic-of-lifeIn “The Logic of Life,” economist Tim Harford shows that two of the main reasons are peer pressure and discrimination. The effect of peer pressure was revealed by a Harvard study where researchers asked kids to make a list of their friends. White kids who did well in school made it on a lot of friend lists. In contrast, black and Hispanic kids had more friends if their test scores were mediocre.

When black and Hispanic kids do well in school, they increase their chances of escaping fom the ghetto. This is not popular. People don’t like it when they’re stuck in crime and poverty but their friends are able to escape.

Consciously or subconsciously, poor achievers sabotage the efforts of high achievers. Smart kids are accused of “acting white” and made to feel like a traitor to the group.

Prejudice in the Workplace
Black manEven if black and Hispanic kids ignore the taunts and keep working hard, they still face an uphill battle against discrimination. Economists Marianne Bertrand and Sendhil Mullainathan generated 5,000 resumes based on real documents. The resumes were modified to be either good or mediocre, and a computer randomly inserted distinctively black or white names. The researchers sent out one good and one mediocre “black” resume, and one good and one mediocre “white” resume to over a thousand classified ads in the Boston Globe and Chicago Tribune. Voice mailboxes were set up to collect the responses.

The results were depressing. White names received 50 percent more interview offers. It was as though job applicants were grouped into three categories: “white and gifted,” “white and ordinary,” and “black.” If you were black, employers didn’t seem to notice if you had extra skills or experience. If employers don’t care, then what’s the motivation to do well in school? For young black kids, this is an unfortunate lesson from the school of hard knocks.

Fitting In?
As a parent, these findings highlight the importance of encouraging your kids to find friends who study hard and do well in school. Also, you may want to think twice before giving your kid a distinctively black or ethnic-sounding name. Yes, it worked for Obama (“a skinny kid with a funny name”), but I bet there are days when even Obama wishes his middle name were not “Hussein.”

References
Agesa J, Monaco K. Industry racial employment by skill level: the effects of market structure and racial wage gaps. Journal of Labor Research. 25(2): 315-328. Abstract.

Austen-Smith D, Fryer RG. (2005). An economic analysis of ‘acting white.’ Quarterly Journal of Economics. 120: 551-83. Abstract.

Bertrand M, Mullainathan S. (2003). Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination. NBER. Working Paper. Abstract.


“Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”
-Abraham Lincoln

The Power of Divorce

Fighting knightsOne of my favorite songs of 2008 was “Disturbia” by Rihanna. I like the spacey mix of dance beats and electronica. A few weeks ago, I was sad and angry to learn that Rihanna’s boyfriend, Chris Brown, is accused of beating her. Police sources say Rihanna’s injuries included a bloody nose and bite marks on her arms.

Violence against women is unacceptable. Both men and women strongly condemn it. So why does it happen? Tim Harford shows that the cause is often an imbalance of power.

You’ve Come a Long Way, Baby
In the 1950s, women in unhappy marriages didn’t have a lot of options. Housework was tedious and time-consuming, and jobs for women were low-paying and uncommon. There was no contraception, and most women were tied down with several children.

Things started changing in the 1960s. Household appliances reduced the effort of housework. The birth-control pill was approved for contraceptive use. In 1969, Ronald Reagan signed a bill introducing “no-fault” divorce. This meant either spouse could walk away from the marriage by demanding a divorce. Before this bill, divorce required the consent of both parties. This meant one partner could withold permission or extort favorable terms.

As states passed no-fault divorce laws, women gained the power to walk away from bad marriages. This motivated men to behave better. Domestic violence fell by 30 percent, the female suicide rate fell by 10 percent, and the number of women murdered by their partners fell by 10 percent.

Economics of Relationships
Although women have more power today, black women are still at a disadvantage compared to white women. The reason is low supply and high demand for marriageable black men. In 32 states, more than 10 percent of black men are in prison. In New Mexico, the figure is an astonishing 30 percent.

This situation puts black women in a weak bargaining position. There are not enough black men to go around. And the men who stay out of jail realize they are in demand, and don’t need to get married to have fun. The result is some black women are pressured to marry beneath themselves or stay in unhappy relationships.

Rihanna is one of the most successful 21-year-olds on the planet.  I hope she uses her status and power to find a better boyfriend.

References
Cowen T. (2007). Matrimony has its benefits, and divorce has a lot to do with that. New York Times. April 19, 2007. Full Article.

Stevenson B., Wolfers J. (2006). Bargaining in the shadow of the law: divorce laws and family distress. Quarterly Journal of Economics. 121(1): 267–88. Abstract.

Charles KK, Luoh MC. Male incarceration, the Marriage Market, and female outcomes. NBER. Working Paper. Full Article.

Harford T. (2008). Divorce is good for women. Slate. Jan 16. Full Article.


“Once I was in the city, I really enjoyed it. Just to experience things. There was so much new stuff.”
-Madeleine Peyroux

Why You Should Live in a Big City

Times SquareDo you know anyone who’s never lived in a big city? If you answered yes, you may want to tell your friend that the wage gap is 32 percent between the country and cities with populations greater than 500,000 people. Part of the reason is cities attract better-educated and higher-skilled workers. But even accounting for the differences in eduation, experience, race, occupation, and tenure, the gap is still more than 25 percent.

Bright Lights, Big City
Having ruled out these differences, economists believe the explanation for the wage gap is cities enhance the accumulation of human capital. In other words, a worker in New York City learns more and learns faster than someone in Kalamazoo, Michigan. In New York, there are more schools, more networks, and more opportunities to learn from the successes and failures of others. Also, workers can specialize in narrower fields and acquire deep expertise more quickly.

What should you do if you live in Kalamazoo? Statistics show almost no wage gains in the first year that someone moves from the country to the city. But wages rise 10-14 percent in the second year, and reach almost the same level as other city-dwellers by the third year.

City Slickers
What happens to people who move from the city to the country? It may surprise you to learn that these people typically experience a wage increase of 10 percent. When you transplant a New Yorker to Kalamazoo, she usually has the skills and chutzpah to outcompete her new neighbors.

So even if your idea of heaven is a 20-acre ranch in Montana, consider spending a few years in a big city to develop your skills. It’s an investment that should pay off for the rest of your life.

References
Glaeser E, Mare D. (1994). Cities and skills. NBER. Working Paper 4728. May. Abstract.


Introducing the Master Life Faster wiki

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Scientists around the world are constantly discovering new ways for you to become happy, healthy, wealthy, smart, and social. The purpose of the wiki is to filter and synthesize the best science for living your best life.

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Copyright 2009 by Paul Lem, M.D. All Rights Reserved.
Posted to: https://masterlifefaster.wordpress.com

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