Sunday, March 15, 2015

Support for free markets by country

The Pew research Center carried out a Global attitude and trends survey in October 2014 which shows some interesting results. One result that brought my attention is the differences in support for free market economic systems.

As you can see South Korea is the country that agrees most with the statement "Most people are better off in a free market economy,...".

Greece, Japan and Spain are on the opposite site. Economic Stagnation or crisis seems to correlate well with this. But, arguably, is Northern Europe, US and UK the most economically free countries. So, it seems that the non-economically free countries tend to blame something they don't have for their problems.

Tuesday, February 24, 2015

A new Data Scientist position

The White House has appointed its first chief data scientist (CDS) for data policy.

 "CDS will be to responsibly source, process, and leverage data in a timely fashion to enable transparency, provide security, and foster innovation for the benefit of the American public, in order to maximize the nation’s return on its investment in data."

This new post will be filled by D J Patil.

Thursday, January 15, 2015

Older leaders by countries

A month ago the Telegraph published an article about how the old pensioner is ruining the young generations’ future and hopes in the UK. It was a bit harsh but the whole point was that youngsters are a minority without political or economical power and therefore brought to their knees by the politically active and rich older generations.

If that is the case, that should have a negative impact on future (present) economic growth. First, it’s known that older generations are more conservative and risk-averse: they’ve got much to lose (assets, savings) and nothing to win (low and decreasing productivity). Secondly, with a more conservative society, regulation would grow, new technologies banned (Uber, Airbnb?) and anti-inflation policies applied. With a scenario like this, younger generations’ expectations would be pretty grim. Creativity and innovation would be harder and as a consequence investment scarce. GDP growth is to good extent a consequence of expectation. Japan could be an example of this.

Research has found a direct relationship between GDP and population age. Smlan Roy, has calculated that the shrinking working-age population dragged down Japan’s GDP growth by an average of just over 0.6 percentage points a year between 2000 and 2013, and that over the next four years that will increase to 1 percentage point a year. Germany’s shrinking workforce could reduce GDP growth by almost half a point. In America, under the same assumptions, the retirement of the baby-boomers would be expected to reduce the economy’s potential growth rate by 0.7 percentage points.

The effects of population age on GDP is probably more complicated than that. Experience is key:
“A clutch of recent studies suggests that older workers are disproportionately more productive—as you would expect if they are disproportionately better educated. Laura Romeu Gordo of the German Centre of Gerontology and Vegard Skirbekk, of the International Institute for Applied Systems Analysis in Austria, have shown that in Germany older workers who stayed in the labour force have tended to move into jobs which demanded more cognitive skill. Perhaps because of such effects, the earnings of those over 50 have risen relative to younger workers.”

It is well known that there is an inverted U relationship between age and salary being 50 when the maximum is reached, ie where experience is not enough to compensate for the loss of creativity.

In any case, seems clear to me that on the extreme a society full of 70 years old pensioners could hardly grow. But even more important, a society were power is biased toward older people wouldn’t be fair.

I generated the following graph that shows the average age of the CEOs of the largests companies and Government members per country. 

The second graph shows the difference between the average leader (CEOs and Gov. members) and the average citizen.

In all cases the leaders are older than the average citizen. Spain is the most extreme case, they are about 25 years older.

Wednesday, December 17, 2014

Data languages and salaries

Last month O’Reilly published their annual DataScientist Salary and Tools Survey. It brought a lot of attention and was the most read article for several weeks at R-bloggers. This is the second year of this report which is an anonymous survey to expose the tools successful data analysts and engineers use, and how those tool choices might relate to their salary. 800 respondents who work in and around the data space, and from a variety of industries across 53 countries and 41 U.S. states.

They found that tools from, what they describe as cluster 3 (Python, R, Matlab,…), increase the average data scientist salary by $1,900 per tool. On the contrary tools in Cluster 1 (SPSS, SQL, Excel, SAS…) bring down salaries by $1,100 per tool. Specifically the report states “The median salary of respondents who use tools from Cluster 1 but not a single tool from the other four clusters is $82k, well below the overall median [which is $98,000]”.

The data was collected from Strata conference attendees which is made of a broad spectrum of data analysts. So, I thought, why don’t we use another source and focus on economics? I checked what Linkedin says about salaries in the economiscs sector about data softwares in the USA and these are the results:

*salaries are in US dollars, the number of jobs are according to LinkedIn USA in December 2014.

Seems that the maximum salary is reached by the combination R+SQL or R alone. But the largest number of opportunities are for those who know SQL, around 750.

This results match those reached by O'Reilly. R seems to be growing and salaries grow accordingly.

Sunday, November 16, 2014

Education in the OECD

Economic theory and empirical research stresses how important human capital is for economic growth and society’s welfare. The more educated and productive individuals are, the richer and freer societies are. In order to know the potential economic growth, then, it’s key to measure and compare human capital among countries and regions. Yet, human capital is by definition very hard to measure, by human capital economists mean knowledge, imagination, creativity…
The simplest way to measure human capital is by measuring knowledge in a very specific field. This is what the OECD does every year in a survey to adults of 22 countries. The survey includes reading and mathematical questions and the results of which always draws a lot of attention.

The last results were published in a report back in September and proved to be very interesting. The report compared the literacy level with variables such as educational attainment, unemployment and earnings.
One of the most striking results is how different literacy and maths levels are in each country. In fact, the average 18 years old teenager in Japan, Finland and the Netherlands has a higher literacy and maths level than the average post-graduated in Spain or Italy (post-graduates younger than 35) and, even more surprisingly, even the average 16 years old teenager in Japan has a similar literacy and maths level than the average the average post-graduated in Spain or Italy.

The incentives to study tertiary education are also very different on a country basis (incentives as earnings and without taking into account education costs). The average post graduate worker in Chile, Brazil and Hungary doubles the average salary of a worker with upper secondary studies.
But if we assume free international labour markets, the best thing you could do if you are a post-graduate worker is to move to US on the other hand if you are a worker with below upper secondary education then move to Denmark.

Wednesday, October 15, 2014

Who is happy?

The European Social Survey is an extraordinary data set providing information about the social activities of 42,000 people in 22 European countries. Economists have been using it to analyse and study social behaviour. This paper from 2006 wrote by Benesch, Stutzer and the misbehaved Bruno Frey analyse the impact of time spent watching TV and self-reported life satisfaction.

Interestingly when one controls for the major factors of human satisfaction, i.e. Financial satisfaction, feeling of safety, trust in people, social activities; time spent watching TV still has an statistical significant negative impact on human happiness and the more you watch the more unhappy it makes you in an exponential way. (I think Youtube may have the same negative impact.)

Even though it’s not the purpose of the paper it’s interesting to see that the most import factor for life satisfaction is financial stability (the desire to be rich has a negative impact, though) followed by be engaged in social activities.

More specifically, according to the regression analysis the happiest person is either an early 30s year old, or retired, woman, who doesn’t live abroad but lives in a farm or house in the countryside, self-employed, volunteers in community service, highly educated, married, living without children at home and working around 30 to 35 hours a week.

Monday, September 15, 2014

The history of culture diffusion

Nature, the magazine, published a 5 minute animation about the spread of culture and ideas through the history and the world (from 600AD to present day) by following birth and death place of main personalities in history like Leonardo da Vinciy. One can see the cultural activity of the Renaissance in Italy and the Rome empire, and the French, American and British cultural and scientific explosion of the XVII and XVIII century. It clearly is a bit Eurocentric but is also interesting and beautiful, anyway.