February 13, 2014
Economics & Valentine’s Day
By Cindy Ivanac-Lillig
One of this blog’s objectives is to bring the most un-economic subjects into the realm of economics. My hope is that this will entice folks to further study the “dismal” science. Today, Valentine’s Day is my target!
The economic implications of who we date and marry seem pretty obvious on a micro level. If you fall in love with someone that earns a lot of money, it is clear that your joint economic situation will probably be comfortable and vice-versa. By the way, I am in no way advocating one situation over the other.
However, it also seems that there are macro-economic implications to these decisions as well. Joanne Weiner writes in a recent Washington Post blog:
“Marriage is one of the unexpected causes of the growing income gap. Research from a team of international economists led by Jeremy Greenwood at the University of Pennsylvania found that a common measure of income inequality (known as the Gini index) is about 30 percent higher than it would otherwise be if better-educated people randomly married other people instead of marrying people with similar levels of education.
What this means is that income inequality has grown worse over time partly because highly-educated people are marrying other highly-educated people…”
This phenomenon is probably just a symptom of wealth concentration and not a cause, but either way, it is fun to think about what it may mean in terms of policy rationale. For example, there are many worthwhile initiatives aimed at having a greater proportion of low income students attend and graduate college. The scientific, well-documented argument is that this will enhance their skill set which will in turn improve their life-long earning potential. This is true, but how about if another reason is simply that they would be sitting in class on Valentine’s Day and may find their future partner there. This partner will likely make more money than someone they may have met in their community given that this future mate is on his/her way to graduating college. And again, money isn’t everything, but household income is still one of the most reliable variables to measure standard of living and overall economic well-being.
Economic textbooks would be so much more interesting if they taught about a Dating Possibilities Frontier as opposed to the Production Possibilities Frontier!
Wishing you a Happy Valentine’s Day and a right shift of your Dating Possibilities Frontier (sorry to my married readers – you have already maximized your utils)! Check out #Fedvalentines on Twitter. They have been quite entertaining in the past.
December 31, 2013
FOMC Infographic & 2014 Calendar... Happy New Year!
Check out our new infographic. It aims to give you a sense of the overall institutional framework around our national monetary policymaking body -- the FOMC. Hopefully, it helps make more sense of it all, most especially the unique voting structure. And for my avid FOMC followers, it has a handy-dandy calendar as well, indicating the dates the committee is tentatively scheduled to meet in 2014.
Wishing you and your family a happy and healthy new year!
Please note: the image was updated to reflect a change in color and rotational details on 01/02/2014Posted by Cindy at 7:48 PM | Comments (0) | TrackBack (0)
November 27, 2013
Evolving Internet Solutions for Students
By Cindy Ivanac-Lillig
In October, we held a series of webinars to mark the Federal Reserve System Financial Education Day. We had guest presenters from the Illinois Student Assistant Commission (ISAC) and College Greenlight present a joint session on financial aid and scholarships. ISAC is a wonderful resource on the FAFSA process. College Greenlight is a customizable scholarship database, searchable on characteristics such as gender, religion, etc. They are both amazing resources. It is awesome to think that, on College Greenlight’s website, you can extract within seconds a list of customized scholarships available with all the pertinent application details at no charge. Please check out both organizations’ October webinar presentations here for more information.
The internet has enabled students and parents to find the cost of college, the scholarships available, and every possible statistic down to how many pounds, on average, freshmen gain. But something that doesn’t seem relatively available is how likely a particular student is to be able to attend and graduate from any given college. Based on research from the Center for American Progress, the particular college a student chooses impacts his/her probability of graduation as much as previous grades, availability of financial aid, etc. This is the type of complex analysis that is not easily aggregated. Therefore, college choice still seems to be dictated in great part by students’ exposure to particular institutions at home and in school. There must be a way to technologically bridge the gap of aggregating the average net cost of college, the level of students’ satisfaction, the graduation probability, the strength of alumni networks, etc. Coming soon, I hope, to a technology entrepreneur near you…
The internet has enlarged the marketplace, increased competition and ultimately value. Our students are being served well by organizations like ISAC and College Greenlight, but just think what else could be done to increase their chances of not only getting into college but graduating.
Please share any resources that you may have with readers on college choice or financial aid.