Research Findings

After the flood, the flood map: uncovering values at risk


October 8, 2018

Climate change is making the planet we inhabit a more dangerous place to live. After the devastating 2017 hurricane season in the U.S. and Caribbean, it has become easier, and more frightening, to comprehend what a world of more frequent and severe storms and extreme weather might portend for our families and communities.

When policymakers, officials, and experts talk about such threats, they often do so in a language of “value at risk”: a measurement of the financial worth of assets exposed to potential losses in the face of natural hazards. This language is not only descriptive, expressing the extent of the threat, it is also in some ways prescriptive.

Information about value and risk provides a way for us to exert some control, to “tame uncertainty” and, if not precisely predict, at least to plan and prepare prudently for the future. If we know the value at risk, we can take smart steps to protect it.

This logic can, however, break down in practice.

After Hurricane Sandy in 2012, I went to New York City to find out how residents there, particularly homeowners, were responding to a new landscape of “value at risk.” In the wake of the catastrophe, they had received a new “flood insurance rate map” that expanded the boundaries of the city’s high-risk flood zones.

129 billion dollars of property was now officially “at risk” of flood, an increase of more than 120 percent over the previous map.

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Research Findings

Do women board directors promote social responsibility?

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October 6, 2018

Last year the European Union began advocating for a quota system that requires companies to appoint women to at least 40% of their board seats. According to the EU commissioner for justice and gender equality, Vĕra Jourová, advancing women on boards is “good for business.”

Many countries in Europe—including Norway, Belgium, France, Italy, the Netherlands and Germany—have already imposed national quotas to mixed effect. In the U.S., where women fill only about 20% of corporate director roles, there is little talk of quotas even among advocacy groups. Yet firms face growing pressure to appoint more women to the boards from policy makers, women’s rights advocates and even large investors.

There are many reasons to advocate for greater diversity on corporate boards. Many investors believe that women improve performance, enhance a firm’s reputation and contribute to creativity and innovation.

Yet little is known about the impact of gender diversity on the board on corporate policy and practice—especially when it comes to corporate social responsibility.

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Research Findings

Do characteristics of secure work make workers feel secure?


October 3, 2018

Most people work because they need to provide shelter and sustenance for themselves and their families. These needs are not temporary or fleeting. For these workers, regular paychecks and health insurance are necessary features of their employment. Having stable and reliable employment is therefore of vital importance.

The formula seems simple. If workers have a job, they should feel more secure than those that don’t. Moreover, certain types of jobs are thought to be more secure than others (e.g., professionals versus retail workers). In reality, however, perceived insecurity is not a one-dimensional phenomenon.

Specifically, there are two major types of perceived insecurity: job insecurity and labor market insecurity.

Job insecurity refers to workers’ assessment of their likelihood of losing their job, whereas perceived labor market insecurity refers to workers’ assessment of their ability to find another job similar to their current position.

In a recent study I found that jobs which are widely viewed by society as secure are associated with lower levels of perceived job insecurity by job holders. However, that same type of work is mostly associated with higher levels of perceived labor market insecurity. How can this be? How can secure work precipitate insecurity?

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Research Findings

Do managers maximize efficiency?


September 29, 2018

The core of mainstream economics is rational choice theory. According to this theory, the guiding principle of human behavior and decision making is that individuals maximize their own self-interest.

Rational choice theory provides the foundation for the idea that for-profit businesses maximize profits and efficiency. Profit is the ultimate goal, but in a competitive market the surest way to maximize profits it to maximize the efficiency of the business.  Competitive discipline plus rational choice results in organizational efficiency.

As critics have long pointed out, rational choice theory is based on heroic assumptions: that individuals have perfect information and computerlike information processing capability, which are used to maximize utility. Economists justify maintaining these assumptions because rational choice models allegedly produce accurate predictions. (They don’t, but that’s another story.)

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Research Findings

Too many bachelor’s degrees for too few skilled jobs


September 26, 2018

People who earn post-secondary degrees have better lives than those who do not. They get better jobs, earn more money, are healthier, happier, and are more civically engaged.

In the popular imagination—and research literature—it is through education that people from poor backgrounds improve their socioeconomic status. Education is an essential part of the American meritocracy.

If you want to improve someone’s life, send them to college!

But everyone involved with higher education—and a large number of people outside of it—are aware of college graduates who are underemployed, or working in relatively low-skilled jobs. Jokes aside, about humanities majors working in restaurants, anyone who spends time around young adults knows some who struggle to find work commensurate with their education.

In a recent study, I found that more recent cohorts of college-educated adults are struggling to find high-skilled jobs. There are too many college graduates for too few skilled jobs.

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New book

Rock stars are made, not born


September 24, 2018

Have you ever wondered how some men and women muster the courage to pursue careers in rock music, despite the fact that so few of them will actually “make it”? Or have you questioned why some individuals would intentionally choose a path that will undoubtedly be filled with struggle, miniscule economic payoff, and a slim chance of success?  

Sure, once musicians get to the level of fame of R.E.M., Nirvana, or The White Stripes, it all seems worth it. But what about the countless other musicians who don’t attain such levels of success? Why would they commit to such seemingly irrational choices? In my new book, I attempt to answer these and a host of related sociological questions. Continue Reading…

Research Findings

How are temporary jobs harming the well-being of you and your spouse?


September 22, 2018

As the economy emerges from the recession, headlines such as “unemployment rate at record low” or “thousands of jobs added to the economy” fill the news sources. These are seemingly great news—not just for the economy, but also for individuals and their families who have experienced or could experience unemployment.

Sociologists and economists have shown that jobless men suffer from psychological problems and depression, but the damage doesn’t stop there—so do their spouses. Likewise, women feel unhappier when they lose their jobs. Although they suffer these effects alone; the well-being of their male spouses doesn’t change when they lose their job.

What the headlines don’t tend to report is that the new jobs behind the declining unemployment rates are often temporary. At best, they are one- or two-year fixed-term positions, or worse, they are casual, seasonal, or offered via a temp agency. So it is questionable how much better it is to have a temporary job that will end soon, compared to being jobless.

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Research Findings

How does income inequality affect the relation between economic growth and CO2 emissions?


September 19, 2018

Since 2014, global energy related carbon dioxide emissions have stagnated while the global economy has grown, ushering in the era of “decoupling.” The International Energy Agency (IEA) attributes this phenomenon to increases in renewable energy consumption, shifts from coal to natural gas, enhancements in energy efficiency, as well as structural changes in the global economy.

The first three of these factors have a clear association to decoupling. For instance, one may expect decoupling of economic growth and emissions, if the share of energy consumption from renewables increases. Similarly, enhancements in energy efficiency should reduce emissions, assuming there is no corresponding increase in energy consumption, which is referred to as the rebound effect (However, colleagues and I have critiqued these assertions; see links above.)

Structural changes in the global economy, also cited by the IEA, are more complex than these other factors contributing to decoupling. What are “structural changes in the global economy”? Have there been changes in how wealth is accumulated? If so, are these changes deliberate? Is growth in the global economy shifting to different nation-states? If so, which ones?

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Research Findings

The criminal justice system as an engine for downward socioeconomic mobility

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September 17, 2018

Over the past forty years, the growth of the criminal justice system in the United States has had many damaging consequences for individuals, ranging from economic hardship to health and family problems. Nobody doubts that getting involved in the criminal justice system affects one’s future life chances, especially because prospective employers (and even institutions of higher education) are increasingly requiring applicants to disclose any criminal past.

But isn’t this really just a problem for serious criminals serving time in prison or for poor people, who lack the financial resources to buy their way out of any problems with superior legal representation and who are more likely to be involved in the criminal justice system in the first place?

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Research Findings

Elite men and inequality in the hedge fund industry


September 15, 2018

“I’m sorry, but so and so’s brother needed to get hired. Shit happens,” Karen recounted, with resignation, a time her boss denied her a promotion.

Karen is a white woman who works at a hedge fund, a private financial firm. She continued, “When there’s big money, greed, power, people protect their own. And sometimes it’s the guy in the parish, the guy in the corner [office], the guy in the whatever.”

Karen’s account provides insight into why firms run by white men manage 97 percent of hedge fund assets­—a $3.55 trillion industry. Moreover, she sheds light on why these elite men have amassed riches.

Indeed, I find that gender and racial inequality provide a key to explaining why hedge funds drive the divide between the rich and the rest. Since 1980, U.S. income inequality has skyrocketed, in part due to mushrooming pay in financial services. Hedge fund managers are well represented among the “1 percent” with average pay of $2.4 million. Even entry-level positions earn on average $372,000. ($390,000 is the threshold for the top 1 percent of families.)

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