Worthwhile Canadian Initiative

Does (cohort) size matter?

In the US, the portion of young men between the ages of 18 to 34 who report having at least one partner has fallen substantially in recent years (sorry for the small image size):




Charts similar to the one above have prompted talk of a sex recession. Yet worries that Millennials are killing sex (as well as napkins, diamonds, and casual dining) may be premature. This data comes from the GSS, which samples a few hundred people between the ages of 18 and 34. The 95 percent confidence intervals around these estimates, shown by the whisker bars on the chart, are very large. For example, the margin of error on the 2018 estimate for men (77.5% with at least one partner) is 7.5 percentage points.

In my submission to the annual Macleans Charts to Watch compilation here I compare the GSS numbers to those obtained from the much larger Canadian Community Health Survey. I find a smaller, but similar, downwards trend in young men's sexual activity rates north of the border. With the larger sample, I could pinpoint the downturn more precisely: it is concentrated among 20 to 24 year olds.

It does seem that these numbers are picking up something real. The question is, what?

Some basic facts about the distribution of sex

The Canadian Community Health Survey is an annual voluntary survey, carried out by Statistics Canada, that collects information about a wide range of health outcomes and risk factors. As part of the 2013-14 survey, 47,764  Canadians between the ages of 15 and 49 were asked about their sexual activity - whether or not they have ever had sex, and if they have had sex in the past year.

The majority of those surveyed reported being sexually active, as shown in the graph below. For example, about 88 percent of 18-19 year old women surveyed in 2013-14 (or 0.88) reported having sex in the last year.  For women, the probability of having had sex in the past year peaks at age 25-29. For men, it peaks 10 years later at ages 35-39. 

These estimates, because they are based on survey data, are subject to some margin of error. The vertical bars represent 95 percent confidence intervals - the true population mean will lie within that confidence interval 19 times out of 20. When there is little to no overlap between two confidence intervals, it is fairly certain that one group of people is having more sex than another group of people. So it is possible to say, with a high degree of confidence, that 18-19 year old girls are more likely to be sexually active than 18-19 year old boys, and 45-49 year old men are more likely to be sexually active than 45-49 year old women.

Quebec is a distinct society, parental leave edition

My colleague Jennifer Robson has recently published a study on parental leave for the Institute for Research on Public Policy. It provides a detailed comparison of parental leave in Quebec and the rest of Canada (ROC), and provides a number of recommendations for changing the way that parental leaves are delivered through Canada' Employment Insurance system. 

As Professor Robson describes in her study, Quebec's parental leave policies are quite different from those in the rest of the country. It is easier for parents who are self employed, and those who work relatively few hours, to claim leave. The parental benefits themselves are more generous in Quebec, especially for mothers with above average incomes - the basic Quebec benefits maxed out at $962 per week in 2016, while the maximum benefit in the rest of Canada was $537. Quebec also sets aside a portion of parental leave for fathers.

Can sex triumph over patriarchy?

The way women and men spend their time has changed profoundly over the past century. Women in the developed and, to some extent, the developing world are spending much less time in unpaid household work, especially in tasks like cooking, cleaning, and laundry, and much more time in paid work. Men are doing a little bit less paid work, and perhaps a little bit more household work (Aguiar, Hurst and Karabarbounis).

Being in the paid workforce is not intrinsically superior to, or of greater moral worth than, being a housewife or a stay-at-home parent. But there is one salient difference between unpaid work within the home and paid work: cash. Money can be withdrawn from the household budget and used for one's own personal pleasure. Unpaid work is much harder to convert into the latest phone or an evening out with friends or a new coat.

Babies as Human Capital in an OLG model

I'm trolling Elizabeth Breunig. Because she said that "Human capital is one of the more odious terms in the capitalist lexicon". And I like the term "human capital", because I think it helps us think more clearly about investment in training and education.

Are new-born babies "human capital"? My first thought was that they possess no human capital, because they haven't invested in learning anything yet, so it was an abuse of the concept to say that babies are human capital.

Then I remembered "Lark Rise to Candleford", (HT Frances), a memoir of 19th century girlhood in a poor English village. Only one couple in the village had any savings. They were saving for their pension. They were the only childless couple in the village. All the other couples had children, who were costly to feed and clothe, but would support them when they were too old and sick to work. Their children were their pension plans.

The Fuss Over TFSAs

Well, there seems to be a fair amount of fuss over the proposed doubling of the contribution limit to Tax Free Savings Accounts(TFSAs).  Kevin Milligan says the case for raising the annual TFSA limit is shaky as the benefit will be mostly to high wealth households rather than those at the middle or bottom of the wealth distribution.  There have been reports by the Broadbent Institute (the Kesselman study) as well as the Parliamentary Budget Office that also raise concerns about how over time the implementation of the expanded limit will increase the size of the tax exempt base and erode future government revenues.  Indeed, my WCI colleague Frances sees this as part of a long term agenda to constrain the size of government. 

Reverse Regression and the Great Gatsby Curve

[Update: I'm getting an awful feeling this post may be totally wrong. Does (1/b)/[1+Var(V(i))/Var(Y(i))] = b if the Lamarck model is true? If so, my proposal won't work. Wish I could do math.] [Update2. Nope, I think it will work. But Majromax in comments has come up with a simpler way to do the same thing. See my 01:19 pm comment.]

Economists normally run a regression of son's income on father's income, and interpret the estimate beta as a measure of "intergenerational mobility". (High beta means low "mobility"). I think we could learn something interesting by reversing the regression -- run a regression of father's income on son's income -- and comparing the results of the two regressions.

This post is about: econometrics (errors in variables bias); genetics (regression toward the mean); and mobility/inequality. I don't know much about any of those three areas, so I will probably get things wrong. I am not 100% confident my proposal will work, but I would like people with better technical skills than me to take a look at it.

Ideally, we should all agree on how we would interpret the results before we run any regressions.

How to deliver tax relief for Canadian families

In the 1960s, my mother's monthly family allowance cheque paid for a week's groceries.

In 2011, the median Canadian two-parent family had an income of just over $90,000. At that level of net income, a family with two children receives Canada Child Tax Benefit worth $87 per month. That doesn't come close to paying for a week's groceries. 

The Harper government has already gone some way to providing greater tax recognition for the costs of children through the introduction of the Universal Child Care Benefit and the introduction of a non-refundable child amount credit. Both of these are good policies. 

Yet they are overlaid upon a CCTB system that contains fundamental flaws.

Who needs the responsibility?

Twenty years ago, men and women had similar attitudes towards children - young women, on average, wanted slightly more children than young men, but the differences were nothing to speak of.

Now, on the other hand....

Within versus Between Sample Variation, or Why an Equal Marriage Means More Sex

It's clickbait, New York Times style: "Does a More Equal Marriage Mean Less Sex?" Spurred by findings of a paper by Sabrino Kornrich, Julie Brines and Katarina Leupp published in the American Sociological Review, the article argues that, "too much similarity in egalitarian marriages leads to boredom and decreased sexual frequency". In general, "the less gender differentiation, the less sexual desire.” "On an emotional level, “kindred spirits” sounds lovely. But when it comes to sexual desire, biology seems to prefer difference." 

But do these findings really stand up to serious scrutiny?

Marriage, Canadian style

Canadians are less inclined towards marriage than Americans. How much less?

The Historical Constants of Affluence

According to the recently released results of the National Household Survey, the top 1% of Canadians aged 15 and over earn $191,000 a year and tend to be predominantly male, university educated, married, most likely over the age of 45, and live in larger metropolitan centers.  It would appear that little has changed since the nineteenth century when it comes to the determinants of affluence.

Can IKEA Stay Profitable?

As part of moving my daughter into her new abode last week, I had an experience with IKEA, which got me thinking about whether the giant furniture retailer can continue its high growth and profitability.  Everyone is of course familiar with the basic approach used by this very successful company.  IKEA provides innovative, stylish low cost furniture in flat packs that you usually assemble yourself or can pay to have assembled.  

Love, paternalism, selfishness - and money.

Smokers smoke. Gamblers gamble. Drinkers drink. Why should anyone else care?

Some non-economists believe that economics assumes selfishness. Each person is only concerned about themselves, and their material consumption. Selfishness can be represented formally like this:

    u=u(x)                                                        (1)

A person's "utility", their well-being or happiness, is a function, u, of their consumption of goods and services, represented by the vector x.

An entirely selfish person doesn't care if others smoke or gamble or drink. Her well-being depends only on her own consumption. Live and let live (or, as the song goes...).

Taxation of the family: everything old is new again

Matt Krzepkowski and Jack Mintz have recently produced a working paper titled "No More Second-Class Taxpayers: How Income Splitting Can Bring Fairness to Canada's Single-Income Families."  The paper argues that higher income single-earner married couples are "disadvantaged by the current system." It proposes to put an end to that by allowing income splitting, so a one earner couple with income of $200,000 a year would pay about the same taxes as a two-earner couple where each person earned $100,000 per year.

The Krzepkowski and Mintz paper is the latest salvo in a long war over the best tax treatment of the family. Alexandre Laurin and Rhys Kesselman produced an analysis of income splitting for the CD Howe Institute in 2011, and back in 2000, Carole Vincent and I wrote a paper on Taxing Canadian Families for IRPP (downloadable here: Vincent_Woolley).

While cleaning out the the bottom drawer of my filing cabinet I came across a number of other, older studies of the taxation of families in Canada. As most are in the public domain, but difficult or impossible to obtain elsewhere, I thought I'd post them here. What is remarkable about them is the degree to which they presage the current policy debates - most of the ideas in the Krzepkowski and Mintz paper were brought forward and discussed in the 1960s and 70s. Understanding why they were rejected then may help clarify the current policy debate.

What's a man worth on the dating market?

Last fall I stopped talking about the economics of gender, and began talking about the economics of sex. It was wonderful. 

So much can be discussed under the rubric of economics of sex. Take, for example, the pick-up artist phenomenon, described in books like The Game. It's like Cesar Millan's Dog Whisperer books, urging men to be alphas, take a leadership role, and ignore begging and requests for attention. The major difference as far as I can see is that pick-up artists aim to make women come to bed, rather than dogs come to heel. 

How can son preference persist?

In much of North Eastern India, there are 915 or fewer girls for every thousand boys - a sex ratio of more than 1.09 boys per girl. The persistence of such high sex ratios is puzzling, because it violates Fisher's Principle.

In most species, the ratio of males to females is approximately one to one. Fisher's principle explains why. In a society with fewer females than males, females achieve, on average, greater reproductive success than a typical male. Accordingly, any inheritable tendency that predisposes parents to producing females spreads. The number of females rises until, eventually, equality between males and females is restored.

So how can son preference persist?

Who is the caregiver?

In the picture on the right, who is the caregiver, the man or the woman?

(To find out the answer, click "Continue reading...").

Births Revisited: Births, Population and Per Capita Income

Well, after my last post I finally got around to calculating another measure of the birth rate – births per capita.  Total births are a useful aggregate but the measure does not adjust for population size.  There are other fertility measures out there such as births per woman aged 15 to 44 years but per capita births is a nice intuitive measure that adjusts for population size and can be readily compared to other numbers – such as per capita income. Moreover, it was easy to calculate.

Recessions and Making Babies

It would appear that the severity of the global recession is affecting fertility rates in many countries.  The fertility rate as measured by the number of live births per woman in Europe has dropped substantially in a number of countries according to The Economist.  These results suggest that rather than lowering the opportunity cost of having children, recessions create the economic uncertainty that makes those about to undertake breeding much more skittish and therefore more likely to postpone childbearing.  Unemployment and enchanted romantic evenings are not positively correlated.