Now and then I\’ll post a cartoon or quotation which is the sort of thing I\’d tack up on the bulletin board outside my office, or mix into the slides for a lecture. Last week I posted some thoughts about correlation and causation in the context of incarceration rates and crime, and supportive reader R.S. sent along this cartoon from the webcomic xkcd.
\”Job tenure\” is the term economists use to refer to how long someone has been at their current job. For example, people in their 40s typically have been at their current job for longer than people in their 20s–and so will have longer job tenure. But in the US economy, job tenure is falling. Julie L. Hotchkiss and Christopher J. Macpherson of the Federal Reserve Bank of Atlanta provide a useful figure illustrating the pattern.
The figure is just a little tricky to interpret. The horizontal axis shows birth year, and more specifically, it refers to those born in 1933, 1943, 1953, and so on up to 1993. The vertical axis show median job tenure with current employer. And the lines show a breakdown by age group. Thus, the top orange line shows that workers who were born in 1933 had a median tenure at their current job of 13 years in their 50s (which would have happened in the 1980s), but workers born in 1963 had a median job tenure of less than 9 years when they reached their 50s (which would have happened just a couple of years ago). The bottom yellow line shows that workers who were born in 1953 had a median tenure at their job of four years when they were in their 20s (that is, during the 1970s), but those born in 1983 had a median job tenure of only two years (in the 2000s).
Thus, the lines from top to bottom show that older workers consistently had more job tenure than younger workers, as one would expect. The downward slope of the lines means that those born more recently have less job tenure–if you look at the same age group.
The figure is really just one more way of confirming what most people already know: a connection between a worker and an employer doesn\’t last as long as it used to. Indeed, I\’ve recently offered some evidence that in the last decade or so \”All the Job Growth is in `Alternative\’ Jobs\” (April 11, 2016), which are jobs that are temporary or on-call or \”gig economy\” jobs that aren\’t premised on an ongoing relationship between employer and employee.
For the workers, this pattern means that you need to plan your work life with a little less attachment to your current employer, and one eye looking ahead to the next job. This means continual networking about jobs. It also means that employers are less likely to offer training, because they aren\’t expecting to be connected with employees for the long haul, so you need to be sure that you are always updating your own training and human capital.
For public policy, falling job tenure and the rise of alternative jobs point to the importance of having benefits like retirement accounts and health care be easily portable across jobs. It also suggests that as more people are switching jobs more often, the US should consider less emphasis on \”passive\” labor market policies like paying unemployment benefits and putting more emphasis on \”active\” labor market policies for job search, retraining, subsidized employment programs, and even in some cases direct job creation to bridge the period between other jobs.
Health Care at a Glance 2015 is an OECD databook: that is, a bit of text, but mainly charts and figures. It serves up the standard comparisons of US health care spending in the context of the rest of the world, along with a number of detailed comparisons of health status, the health care workforce, access to health care, quality of care, and others.
Let me start with the comparisons of US health care spending to the rest of the world, which are both familiar to me and also never fail to astonish my eye. US per capita health care spending is more than one-third bigger than any other country; moreover, it\’s two-and-a-half times as large as the average of OECD countries.
The US doesn\’t just spend more because it\’s a higher-income economy. As a share of GDP, the US spends more than five percentage point of GDP more than the second-place country; in addition, it spends nearly twice as much on health car as a share of GDP than the OECD average.
There\’s also an ongoing argument about whether the passage of the Patient Protection and Affordable Care Act of 2010 slowed down US health care spending. As I\’ve argued, the decline in the growth rate of US health care spending started well before the 2010 legislation, and moreover it was part of a global slowdown in the rise of health care spending. Here\’s a figure looking at the rise in health care costs across countries from 2005 to 2009, and also from 2009 to 2013. US health care costs rose more slowly than the international average in the earlier period, but have have risen faster than the international average since then.
It\’s also well-known that despite the relatively high levels of US health care spending, US public health statistics aren\’t especially good. Although the US doesn\’t measure up very well to other countries on access to health care, given that about 27 million Americans still lack health insurance, the causes of poor health go a lot deeper than the health care system. As the report notes:
\”Life expectancy in the United States is lower than in most other OECD countries because of higher mortality rates from various health-related behaviors (including higher calorie consumption and obesity rates, higher consumption of legal and illegal drugs, higher deaths from road traffic accidents and homicides), adverse socio-economic conditions affecting a large segment of the US population, and poor access and co-ordination of care for certain population groups.\”
So what is the US getting for its health care spending? Here are some tips and clues from the report. I\’ll let you look up the specific tables yourself, if you wish, and just cut to some of the comparisons that caught my eye.
Countries with a high number of doctors, like Germany, Sweden, and Austria, have 4-5 doctors per 1,000 people. The average for OECD countries is 3.3 doctors per 1,000 people. In the US, it\’s 2.6 doctors per 1,000 people.
When it comes to hospital beds, Japan by far leads the way with 13.3 per 1,000 population. For comparison, Germany has 8.3 hospital bed per 1,000 population, France has 6.3 hospital beds per 1,000 population, the OECD average is 4.8 beds per hospital population, and the US has 2.9 hospital bed per 1,000 population.
Some measures are a way of capturing how well the health care system deals with chronic diseases like diabetes or asthma. The working assumption is that if complications from these conditions are leading to hospitalization fairly often, then they aren\’t being especially well-managed. The US doesn\’t do especially well on these measures. Rates of hospital admissions for asthma and chronic obstructive pulmonary disease (COPD) were about 240 per 100,000 population for the average OECD country, but about 320 per 100,000 in the US. Hospital admissions for diabetes are about 150 per 100,000 in the average OECD country, but about 200 per 100,000 in the US.
However, when it comes to measures of the efficacy of high-tech medical interventions, the US health care system performs well. For example, one such measure is the share of people over-45 admitted to a hospital with acute myocardial infarction (AMI) who die with 30 days. The OECD average is about 8 per 100 cases, while in the US it\’s 6 per 100 cases. Similarly, if you look at the thirty-day mortality rate after admission to hospital for ischemic stroke, the OECD average is about 8 per 100 admissions, while in the US it\’s about 4 per 100 admissions.
When it comes to MRI scanners, Japan leads the way by far with 46.9 per million population, but the US isn\’t far behind at 35.3 per million population. The OECD average is 14.1 MRI scanners per million population. CT scanners are a similar story. Japan again leads by far with 101.3 per million population, but the US is in the top three with 43.5 per million population.
A few years back, I tackled the broader question of \”Why does the US Spend More on Health Care than Other Countries?\” (May 14, 2012). Here, I\’ll just note that the US ends up with a health care system that excels at high tech, high cost care, but does an average to below-average job at other aspects of health care. The OECD report notes that the US manages to have one of the highest five-year survival rates for those with breast cancer, but a substantially below-average five-year survival rate for cases of cervical cancer.
Here\’s a final figure, which divides up total health care spending into inpatient care, outpatient care, long-term care, medical goods, and collective services. Strikingly, the US is at the bottom in term of share of spending on inpatient care, but at top in share spent on outpatient care and near the top in the share spent on \”medical goods.\”
Many discussions of the US health care system take most of how it operates for granted, and then argue over \”single payer\” or \”health care exchanges\” or expanding Medicare. My sense is that specific comparisons across countries can be a useful way to shake up thinking. For another recent post with this element, see \”A Cross-National View of Health Care Systems: Thoughts on Canada, the UK, and Germany\” (March 10, 2016).
Many collections of quotations (for example, here, here, here, and here) include this gem attributed to Nikita Khrushchev, who was premier of the Soviet Union from 1958 to 1964: “Economics is a subject that does not greatly respect one\’s wishes.” It’s a great put-down. But in what context would Khrushchev have said such a thing?
I had not been able to find a reference for the supposed comment. But an article about Khrushchev visiting Mao in 1958 that appeared in the Smithsonian in May 2012 cited an essay by James Kenneth Galbraith as a source of the quotation. The essay, called “The Day Nikita Khrushchev visited the Establishment,” was published in Harper’s in February 1971, and reprinted in the compilation of Galbraith’s essays called A Contemporary Guide to Economics Peace and Laughter that was also published in 1971.
The context is a visit from Khrushchev to the United States in 1959, and more specifically, the part of the visit where he visited the Manhattan house of Averill Harriman, a Democratic politician and power-broker who among other roles was US Ambassador to the Soviet Union from 1943-1946, US Secretary of Commerce in the Truman administration, Governor of New York, and held several positions in the State Department during the Kennedy and Johnson administrations.
Galbraith is discussing a period toward the end of the evening, which is supposed to be devoted to asking questions, but in which various members of the US establishment are instead making little mini-speeches to impress each other–followed by dry comebacks relayed through Khrushchev’s translator. As Galbraith writes of the questions that were asked:
“Almost all began with a disavowal of Communist sympathies and a strong affirmation of faith in the American free enterprise system. In light of the asset position of the speakers, neither disavowal nor avowal seemed absolutely essential. All of the questions were phrased to convey information, not to elicit it. A Ring Lardner parent once responded to his offspring, “`Shut up,’ he explained.” On that afternoon there was a slight variation. “`I would like to tell you something,’ they asked.” However, the questions did not convey much information and not because they were brief. As he spoke, each interrogator covertly eyed the others present to see whether he was making a decent impression.
Finally it came time for Galbraith’s own question/mini-speech, which he described in a delightfully self-deprecating tone.
Harriman nodded at me and I came through with a question urging Khrushchev to accept the thesis of American Keynesians, such as myself, that the capitalist crisis was now under control. I developed the question with care and at considerable length for I had concluded that the other men present could do with a lecture on modern economics. Many were still very suspicious of Keynesian fiscal policy: they, as well as Mr. Khrushchev, needed to understand the true foundations of American well-being. As my question continued I watched my audience out of the corner of my eye. I could see that they were following me closely. Presently I finished. Mr. Khrushchev replied that I was entitled to my views, that he was sure I took them seriously and that he was glad I had confidence in the system. He added that economics is a subject that does not greatly respect one’s wishes.
So the good news is that the quotation is authentic in the sense that it has an actual source! The bad news is that the quotation is Khrushchev as filtered through his translator, and then remembered and paraphrased by the witty and sardonic Galbraith a dozen years later. And the unexpected twist is that while the quotation is often deployed today as a way for conventional market-oriented economists to put down those who substitute wishful thinking for the clear-eyed analysis of tradeoffs, it was originally deployed as a communist put-down of those who believed in Keynesian economics and free markets. (For an earlier blog post on Galbraith as a master of writing and rhetoric, see here.)
