Dynamics of Output and Employment in the U.S. Economy

Deepankar Basu

As the recovery in the United States economy continues to fail in improving the employment scene, discussion on the link between aggregate demand and employment has become interesting and urgent. Deepankar Basu, assistant professor of economics at UMass Amherst, is the co-author of a paper on this topic. Basu and his co-author, Duncan Foley, find a weakening relationship between output growth and employment.

As we document in this paper, the close relationship between output growth as measured by real GDP and employment generation that characterized the U.S. economy over the two decades after World War II has been weakening since the mid 1980s. This has led both to “jobless recoveries” in which aggregate unemployment has decreased less during the upturn phase of business cycles than what would have been predicted on the basis of the past association between output growth and unemployment changes, and also to “outputless crashes” in which the aggregate unemployment rate has increased by more during the downturn phase of the business cycle than past experience would have predicted.

Download Dynamics of Output and Employment in the U.S. Economy by Deepankar Basu & Duncan K. Foley

Media coverage of this paper:

New York Times Economix blog post on the evolving job story in the U.S. by Nancy Folbre refers to the paper:

Financial Times blog entry by Gavyn Davies refers to the paper (affiliations listed incorrectly as Amherst College):

The Lookout on Yahoo! News used the paper to do a story on the employment scenario in the U.S.:


Folbre blogs, some children may be “Born to Lose”

Nancy Folbre

Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about how low birth weight is a strong economic indicator of how a child will do in society. She also argues that exposure to environmental pollution is a key contributor to the health of newborns and has a strong impact on birth weight. (New York Times, 6/27/11)

June 27, 2011
Born to Lose: Health Inequality at Birth

Epidemiologists and economists have long agreed that low birth weight is an important, albeit approximate, predictor of future health problems. A wealth of new economic research tracing individuals over time shows that it is also an approximate predictor of future earnings problems, with statistical effects almost as strong as children’s test scores.

Among other things, low birth weight increases the probability of suffering from attention deficit hyperactivity disorder and lowers the probability of graduating from high school.

In the current American Economic Review, Janet Currie of Princeton, a pioneer in this new area of research, summarizes recent findings and points out that children of black mothers who dropped out of high school are three times as likely as children of white college-educated mothers to suffer low birth weight.

Many of the mechanisms that underlie this inequality are linked to characteristics of the physical environment, such as exposure to environmental toxins.


Friedman discusses problems with health care system on Connecting Point

Gerald Friedman

Gerald Friedman, UMass Amherst economics professor, appeared on WGBY’s Connecting Point to discuss the problems with our current health care system. According to Friedman, 15% of the U.S. population does not have health insurance and approximately one-third of Americans do not have insurance at some point during the year or inadequate coverage. “We have superb health care and wonderful technology, but a growing part of the American population doesn’t have access to it.” 

Massachusetts has done a much better job than other states addressing the problem of access. In fact, 98% of residents are now covered as a result of the health care bill that came into effect in 2006. While Friedman acknowledges that this is a major accomplishment, he is concerned that we have not addressed the issue of cost. He cites accountable care organizations as a possible solution to address the rising costs of health care, but is not convinced they can work within our current insurance system. Friedman believes that ultimately some sort of national health care system, which is the system adopted by many other countries, may be the only solution.


Badgett’s research on same-sex marriage cited in Newsday

M.V. Lee Badgett

A columnist writing in response to the passage of a new law in New York legalizing same-sex marriage says the institution of marriage is evolving. The author cites research done by M.V. Lee Badgett, economics and director of the Center for Public Policy and Administration, and her book, “When Gay People Get Married.” In researching the book, Badgett found that European countries that legalized same-sex marriage during the past 15 years saw lower divorce rates and higher levels of heterosexual marriage than countries that didn’t legalize it. (Newsday, 6/26/11)

Alums Ash Boyce PERI

Economists share $360,000 NSF grant for Environmental Justice research

Michael Ash & James Boyce
University of Massachusetts Amherst economists James K. Boyce and Michael Ash have received a grant of $360,000 from the National Science Foundation (NSF) to study Environmental Justice (EJ) in the United States, in collaboration with colleagues at the University of Michigan and the University of Southern California.

“Environmental Justice” looks at unequal access to a clean environment by race and class. President Clinton’s 1994 Executive Order 12898 made EJ a federal priority.

The UMass Amherst team is part of a three-university consortium for research on EJ. Boyce and Ash co-direct the Corporate Toxics Information Project of the Political Economy Research Institute at UMass Amherst.

The other two lead researchers are Paul Mohai of the School of Natural Resources and Environment at the University of Michigan, a pioneer of EJ research and the lead investigator for the project; and Manuel Pastor, Jr., who heads the Program for Environmental and Regional Equity at the University of Southern California (and holds a 1984 Ph.D. in Economics from UMass Amherst).

Boyce, Ash, and their collaborators will use a unique dataset from the U.S. Environmental Protection Agency’s ‘Risk-Screening Environmental Indicators’ project (RSEI) to examine the social, economic, and geographic structure of exposure to industrial toxic releases in the United States.

According to Boyce, “The RSEI data give an extraordinary window into both who is on the receiving end of toxic industrial pollution and who is on the sending end. No other data permit this type of analysis. Our research will be useful to environmental justice scholars, community activists, and socially responsible managers and investors.”

Ash, who is also appointed in the Center for Public Policy and Administration, notes, “This research can improve understanding of the dynamics of environmental inequality, with broader impacts in public policy, community health, and corporate environmental performance.”

Boyce and Ash’s Corporate Toxics Information Project (CTIP) publishes the Toxic 100. CTIP emphasizes the use of right-to-know information to improve environmental performance. As Boyce describes it, “Our aim is to move from the ‘right to know’ to the ‘right to clean air and water.’”

Alums PERI

Creating Jobs by Building Infrastructure for Bikes and Pedestrians

Heidi Garrett-Peltier

A new study by Heidi Garrett-Peltier ’10 PhD, assistant research professor at the Political Economy Research Institute, finds that infrastructure projects with major bicycling and walking components are more labor-intensive than “road-only” building projects. The study says the bicycling and walking oriented work generates about 46 percent more jobs overall. ( [Ore.], Post-Gazette [Pittsburgh], 6/20/11)

Download “Pedestrian and Bicycle Infrastructure: A National Study of Employment Impact”

Folbre UMass Economics

Folbre blogs on the value of early childhood education

Nancy Folbre

Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about the value of early childhood education and why businesses should consider it a good investment. She notes that the programs have political support across the ideological spectrum, but also points out that budget cutting at the state and federal levels are likely to reduce funding for the programs. (New York Times, 6/20/11)

June 20, 2011
Will Business Buy In To Early Childhood Edcuation?

Economists disagree about a lot of things, but many agree that public investments in early childhood education pay off. The social benefits far exceed the social costs.

A recently released study of 1,000 poor children who benefited from Chicago’s Child-Parent Center Education Program (which includes intensive preschool, parent training and support for students through third grade), suggests that every dollar spent on the program yielded nearly $11 to society, including increased tax revenue and reduced spending on child welfare, special education and grade retention.

Graduate Kurtulus UMass Economics

Kurtulus awarded Huber Fellowship

Fidan Kurtulus

Fidan Ana Kurtulus, assistant professor of economics at UMass Amherst, has been awarded a prestigious 2011 Michael W. Huber Fellowship by the School of Management and Labor Relations at Rutgers University for her research on employee ownership and shared capitalism.

The fellowship recognizes Kurtulus’s trailblazing research on participatory workplaces. Her analysis of worker attitudes towards employee ownership, worker participation, and profit sharing has appeared in leading publications such as the Industrial and Labor Relations Review and the 2011 Annual LERA Research Volume Employee Ownership and Shared Capitalism: New Directions and Debates for the 21st Century.

Kurtulus’s latest research, co-authored with economist Douglas Kruse, explores how worker participation can mitigate economic downturns. Kurtulus states, “Companies with employee ownership have shown greater employment stability in face of the current Great Recession. It’s remarkable that better workplace organization can soften the impact of even a severe macroeconomic crisis.” These results were widely cited, including coverage in the New York Times, after Kurtulus presented them in May 2011 at the London School of Economics.

In 2009-2010, Kurtulus was a J. Robert Beyster Fellowat Rutgers University. She is one of several UMass scholars recognized for work on shared capitalism. Other recent fellowship recipients include Daphne Berry, a doctoral candidate at the Isenberg School of Management, Dustin Avent-Holt, a doctoral candidate in Sociology, and Dr. Erik Olsen and Dr. Philip Melizzo, both recent alumni of the UMass Amherst Economics Ph.D. program.

With a new certificate in Applied Economic Research on Cooperative Enterprises and a cluster of scholars in the shared-capitalism network, UMass Amherst is a leading center for research on participatory workplaces.


U.S. gun laws and violence in Mexico: Is there a connection?

Arindrajit Dube

Arindrajit Dube, UMass Amherst economics professor, is co-author of the paper, “Cross-border Spillover: U.S. Gun Laws and Violence in Mexico.” The authors find that the expiration of the federal assault weapons ban in 2004 coincides with an increase in gun-related crimes and homicides in Mexico bordering on Arizona and Texas. A similar increase didn’t happen near the California border, perhaps because California has tough state gun laws, the authors say. (The New Republic, 6/15/11)


Pollin: Health care costs at heart of long-term debt problem

Robert Pollin

Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute, says controlling health care costs is at the heart of the nation’s long-term debt problem. Pollin suggests that it is possible to adopt a universal health care plan that could reduce per person expenditures, citing other advanced economies as examples. “What we really want is universal health care…for everybody, and to do it in a way where the costs are at least more or less in line with other advanced economies. Right now, the United States spends, on average, about twice as much per person as do other advanced economies, like Canada, like France, like the United Kingdom. And that’s not due to Medicare. In fact, Medicare is actually a relatively cheap way to deliver decent health care. The problem is the private insurance companies and the private pharmaceutical companies. And that’s what needs to be controlled to get long-term health care costs down. (Real News Network, 6/16/11)