Bill Frey on demography and future elections

by Ryan Streeter on November 19, 2014. Follow Ryan on Twitter.

Bill Frey is always interesting. This new Politico article has some important and interesting maps on America’s changing racial demography.

This graph provides a nice summary of the trend that the subsequent maps illustrate:

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Sanandaji on Piketty’s missing entrepreneurs

by Ryan Streeter on November 19, 2014. Follow Ryan on Twitter.

I always enjoy reading Tino Sanandaji. This NRO piece offers an interesting analysis of Piketty’s omission of self-employed business owners and entrepreneurs in his conclusions about earnings and wealth in America. Main takeaways:

  • An influential study by Cagetti and De Nardi used Federal Reserve data in 1989 to estimate the wealth share of self-employed business owners. Self-employed business owners constituted 8 percent of the population, but owned one-third of national wealth and more than half the wealth of the top 1 percent.
  • In 2010, self-employed business owners account for an astonishing 70 percent of the wealth of the top 0.1 percent. If we look at top earnings rather than top wealth, self-employed business owners accounted for around 50 percent of the total earnings of the top 0.1 percent. These facts are never mentioned in Piketty’s book.
  • Last year, the 500 CEOs of the Fortune 500 collectively earned $5 billion. By comparison, the best-performing hedge-fund manager alone earned $4 billion. The total earnings of the 0.1 percent are somewhere around $800 billion per year.

Are Indianapolis, Cleveland, and Providence forming the next generation of innovation centers?

by Ryan Streeter on October 23, 2014. Follow Ryan on Twitter.

There is a notable economic restructuring occurring in Indianapolis, Cleveland, and Providence that is perhaps forming a next generation of innovation nodes.

That’s from an interesting new report by the Center for Population Dynamics at Cleveland State University at

The authors are looking at an important, if not incomplete, measure of regional economic success: the share of advanced degrees in a metro area.

And the growth rates since 2005 – not to mention absolute figures – offer some surprises. For instance, the top 25:

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And then the authors show which cities have experienced the most growth relative to others since 2005:

What’s driving America’s drop in entrepreneurial activity?

by Ryan Streeter on October 21, 2014. Follow Ryan on Twitter.

I’ve written about this trend before:

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This interview by Jim Pethokoukis with Ian Hathaway on this trend is interesting.

Young firms are declining as a share of the total number of firms. We’ve covered this before and previously linked to Hathaway’s recent article with Bob Litan on this.

One thing to draw attention to, though, are Hathaway’s non-policy speculations about why this is so (he also suggests that regulatory and education policy are important factors in all this). He says:

One explanation, which isn’t very exciting, is just that we experienced high growth, population growth in certain regions, businesses needed to be formed to meet that local demand and after that growth slowed down, the firm entry rates maybe came down with it.

Another explanation has to deal with business consolidation. So economic theory would say that the more consolidated an industry is, the higher the barriers are to firm entry.  There may be a connection there; others have talked about this.  It’s something that we’ve seen in a number of sectors.  I have some more research coming out in the coming weeks and months that will address that issue as well.

Whatever the case, the numbers don’t lie. Here are some charts to a recent Haltiwanger et. al. paper that Pethokoukis also links to:

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A lot of this trend appears to be driven by loss of startup activity in retail and services:

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College bubble update: More students – especially among affluent families – take on debt

by Ryan Streeter on October 9, 2014. Follow Ryan on Twitter.

This Pew study is interesting. It shows that even in the wake of the college bubble, college debt continues to increase. The problem has grown especially fast among the wealthier student population.

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The fastest-growing 25 cities since the recession

by Ryan Streeter on October 9, 2014. Follow Ryan on Twitter.

Geographically, the recovery has been concentrated in a relative handful of regions. Nationwide, real per capita GDP rose a meager 3.8% from 2010 through 2013…[A] handful of metropolitan areas have enjoyed much faster growth. For the most part, these are areas that have cashed in on the current technology or energy booms, and in some cases, both. Also, surprisingly, there have been some very good gains in some of the nation’s long-distressed industrial heartland metro areas, as the combination of energy development and a resurgent automobile industry have boosted regional GDP.

That’s Joel Kotkin in his latest Forbes piece. Here’s the top 25 fastest-growing cities since the recession ended:

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European demography, economy, and identity…and neo-druid communitarianism

by Ryan Streeter on September 28, 2014. Follow Ryan on Twitter.

This is the best line I’ve read this week: “Outside of some vaguely anti-American, neo-druid communitarianism among some, there’s not much holding Europeans together.”

That’s Joel Kotkin on Europe’s woes in his latest Forbes article.

He makes that point after citing familiar demographic and economic sources of Europe’s problems, such as this:

Europe’s poor economy stems in large part from policy. The strong welfare state so admired by progressives here has also made Europe a very expensive place to do business. High taxes and welfare costs, long tolerable in an efficient economy like Germany, have a way of catching up with companies and countries. This has been particularly notable after the financial crisis; since 2008 the unemployment rate has shot up 5 percentage points while dropping steadily in the Untied States.

But, Kotkin speculates, maybe it’s not just demography and economy that is holding Europe back.

Perhaps the greatest challenge to Europe is not demographics, economics or energy, but one of identity.

On the multi-lingual, multi-cultural continent that is Europe, Kotkin notes, that identity used to be rooted in a common faith. Now that Europe is highly secularized, is there any such thing as a “European identity”? Kotkin thinks not, and believes this is the source of the separatism we see in Europe right now.

It’s an interesting question.

Are there poverty traps or not?

by Ryan Streeter on September 27, 2014. Follow Ryan on Twitter.

That’s an interesting question posed by this Economist blog post.  The author, keying off this paper by World Bank economists saying that poverty traps are overblown (contra the arguments made, for instance, by Paul Collier’s popular book The Bottom Billion), says that the answer isn’t clear.

The answer to the question will essentially explain how to square this chart….

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…with this one:

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by Ryan Streeter on September 25, 2014. Follow Ryan on Twitter.

Not sure if anyone really uses that word in Germany, but it’s what comes to mind while looking at the exceptional level of satisfaction Germans have about their economy compared to other developed nations, via Pew.

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Falling marriage rates and employability of men

by Ryan Streeter on September 25, 2014. Follow Ryan on Twitter.

After decades of declining marriage rates and changes in family structure, the share of American adults who have never been married is at an historic high. In 2012, one-in-five adults ages 25 and older (about 42 million people) had never been married.

That’s from a Pew survey released yesterday. Here are the trend lines:

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The survey also shows that 78% of never-married women say “a steady job” is very important when considering a potential spouse. The falling labor force participation rate of young men is thus tied up with the falling marriage rate:

Among never-married adults ages 25 to 34, the number of employed men per 100 women dropped from 139 in 1960 to 91 in 2012, despite the fact that men in this age group outnumber young women in absolute numbers. In other words, if all never-married young women in 2012 wanted to find a young employed man who had also never been married, 9% of them would fail, simply because there are not enough men in the target group. Five decades ago, never-married young women had a much larger pool of potential spouses from which to choose.