Enrico Moretti joins us to talk about America’s most dynamic labor markets, the “brain hubs” and their impact in the U.S economy and society.<\/p>\n
Enrico Moretti is the Michael Peevey<\/span> and Donald Vial Professor of Economics at the University of California, Berkeley. He serves as the Editor in Chief of the Journal of Economic Perspectives and is a Visiting Scholar at the Federal Reserve Bank of San Francisco. He is also Research Associate at the National Bureau of Economic Research (Cambridge), Research Fellow at the Centre for Economic Policy Research (London) and the Institute for the Study of Labor (Bonn).<\/p>\n","protected":false},"excerpt":{"rendered":"Enrico Moretti joins us to talk about America's most dynamic labor markets, the \"brain hubs\" \u00a0and their impact in the U.S economy and society.","protected":false},"author":13,"featured_media":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","episode_type":"audio","audio_file":"http:\/\/podcasts.la.utexas.edu\/cepa\/wp-content\/uploads\/sites\/21\/2019\/09\/19-09-25-Policy-at-McCombs-Podcast-Enrico-Moretti.mp3","podmotor_file_id":"","podmotor_episode_id":"","cover_image":"","cover_image_id":"","duration":"","filesize":"73.83M","filesize_raw":"77414528","date_recorded":"27-09-2019","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":""},"tags":[20,30,17,29],"categories":[],"series":[2],"class_list":{"0":"post-181","1":"podcast","2":"type-podcast","3":"status-publish","5":"tag-business","6":"tag-economics","7":"tag-mccombs","8":"tag-policy","9":"series-policymccombs","10":"entry"},"acf":{"related_episodes":"","hosts":[{"ID":693,"post_author":"38","post_date":"2020-10-29 17:58:44","post_date_gmt":"2020-10-29 17:58:44","post_content":"\n Carlos M. Carvalho is an associate professor of statistics at McCombs. Dr. Carvalho received his Ph.D. in Statistics from Duke University in 2006. His research focuses on Bayesian statistics in complex, high-dimensional problems with applications ranging from finance to genetics. Some of his current projects include work on large-scale factor models, graphical models, Bayesian model selection, particle filtering and stochastic volatility models.<\/p>\n\n\n\n Before moving to Texas Dr. Carvalho was part of the faculty at The University of Chicago Booth School of Business and, in 2009, he was awarded The Donald D. Harrington Fellowship by The University of Texas, Austin.<\/p>\n\n\n\n Dr. Carvalho is from Rio de Janeiro, Brazil and before coming to the U.S. he received his Bachelor's degree in Economics from IBMEC Business School (Rio de Janeiro) followed by a Masters's degree in Statistics from the Federal University of Rio de Janeiro (UFRJ).<\/p>\n","post_title":"Carlos Carvalho","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"carlos-carvalho","to_ping":"","pinged":"","post_modified":"2020-10-29 17:59:59","post_modified_gmt":"2020-10-29 17:59:59","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=693","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":580,"post_author":"42","post_date":"2020-07-03 19:53:40","post_date_gmt":"2020-07-03 19:53:40","post_content":"\n Mario Villarreal-Diaz is CEPA\u2019s Managing Director and Senior Scholar. Mario joins CEPA from the University of Arizona where he was an Associate Professor at the Department of Political Economy and Moral Science and taught in the Philosophy, Politics, Economics, and Law undergraduate major.<\/p>\n","post_title":"Mario Villarreal-Diaz","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"mario-villarreal-diaz","to_ping":"","pinged":"","post_modified":"2020-07-03 19:53:41","post_modified_gmt":"2020-07-03 19:53:41","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=580","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"}],"guests":[{"ID":589,"post_author":"42","post_date":"2020-07-03 20:05:13","post_date_gmt":"2020-07-03 20:05:13","post_content":"\n Enrico Moretti is the Michael Peevey and Donald Vial Professor of Economics at the University of California, Berkeley. He serves as the Editor in Chief of the Journal of Economic Perspectives and is a Visiting Scholar at the Federal Reserve Bank of San Francisco. He is also Research Associate at the National Bureau of Economic Research (Cambridge), Research Fellow at the Centre for Economic Policy Research (London) and the Institute for the Study of Labor (Bonn). <\/p>\n\n\n\n Professor Moretti\u2019s research covers the fields of labor economics and urban economics. He has received several awards and honors, including the Society of Labor Economists\u2019 Rosen Prize for outstanding contributions to labor economics, the Carlo Alberto Medal, the IZA Young Labor Economist Award and a Fulbright Fellowship. His book, \u201cThe New Geography of Jobs\u201d, has been translated in eight languages and was awarded the William Bowen Prize. <\/p>\n","post_title":"Enrico Moretti","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"enrico-moretti","to_ping":"","pinged":"","post_modified":"2020-07-03 20:05:13","post_modified_gmt":"2020-07-03 20:05:13","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=589","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"}],"transcript":" Welcome to the Policy of McCombs podcast, a data driven conversation on the economic
\n\ue5d4
\nissues up today in this series. We invite guests into our studio to provide a highlight
\nof their work presented during a visit to the University of Texas at Austin Policy.
\nEmma Combs is produced by the Center for Enterprise and Policy Analytics at the McCombs School of Business.
\nI am your co-host, Carlos Carvalho, with my colleague Mario Villarreal.
\nOur guest today is Enrico Moretti. Enrico is the Michael B.V. and Donna Viol professor of economics at
\nthe University of California, Berkeley. Enrico has a vast publication list in the fields of labor and urban economics.
\nAnd he joins us today to talk about his book, The New Geography of Jobs. Enrico, welcome to Policy McCombs.
\nThank you for having me. So let me start with two great quotes from the book. First, I
\ncan remember at the beginning you say that what divide America today is not just socioeconomic
\nstatus, but also geography. And the second one, which is the very end when you say that one of the most intriguing
\nparadoxes of the global economy is becoming increasingly local.
\nSo I think those two quotes are a good start for free to run us through the argument of the new geography
\nof jobs. Sure. We tend to think of the American labor market
\nas one unified labor market. But in reality, there are 300
\nlabor markets in the U.S., one for each metropolitan area in the country.
\nAnd the wages, the incomes, the standard of living that a worker
\ncan receive in each of these markets is different, is quite different
\nand it’s increasingly different. So the main argument of the book is that
\nthe American communities are growing apart in terms of their economic success, in particular,
\nwhen you’re looking at wages and and economic factors
\nand that these factors ultimately also have an effect, a deep effect on other parts
\nof those communities that are not just purely economics, but they extend to
\ncrime, to politics, to health, to to even family formation.
\nWe live in a country that is incredibly in increasingly different and different increasingly
\ndepend on geography. And the difference when you when you called the Great Divergence, it
\napplies not only to high skill labor, but to everybody to live in those communities. So I remember
\none of the. Tell us a little bit about this, the story of Bill Gates. And I think that that there’s an anecdote about Albuquerque
\nand Seattle there that I think, you know, shows a divergence. Yeah, I think that’s a very compelling
\nstory, because I think it highlights how communities can grow apart. It’s
\na story about two two places, Seattle and Albuquerque, Seattle. We tend to think of Seattle
\nas this remarkable local economy. Today, it’s one of the most successful
\ncities in the U.S. in terms of innovation sector salaries, job growth.
\nIt’s a place that has been on fire for the past 20 years in terms of
\nthe labor market. But Seattle wasn’t really like that
\nin the late 70s. It was a. It was struggling
\nSeattle in the late seventies, didn’t have much. I took it
\nout at old industrial structure, mostly logging and some some
\nsome truck manufacturing. The only advanced manufacturing they had was boring,
\nbut Boeing was really struggling back then. It was shedding jobs by the thousands and the city
\nwas really hurting. You could see it in its board in the local
\neconomy, but also in the school in crime, in all the local amenities
\nthat were really suffering. And then something happened. And by the
\nway, at the same time, you know, we you could also see it in
\nits cultural institutions, in its hospitals, and its pretty much any aspects of public
\nlife was struggling. But then something happened. It was
\nJanuary of 1979 that changed the trajectory of the city forever.
\nAnd then what happened was, as more startup decided to relocate from
\nAlbuquerque, New Mexico, to to Seattle, that’s
\nmore startup nobody noticed at the time. They were only eleven jobs. And that’s more
\nstartup. Was was Microsoft. Microsoft not started
\nin Seattle all the time. Albuquerque was a more of a tech destination
\nthan than Seattle. The main reason why Bill Gates and Ann
\nAllen at Pudi, the startup scene in Albuquerque, was that that’s where the clients were. That’s where software
\nusers were. They wanted to move back to their family. They grew up in Seattle.
\nThat was not like an economic choice. That was something that had to do with where they grew up. And
\nthey wanted to move back close to their parents and are a place where they grew up.
\nBut that’s individual choice. Eventually changed the trajectory of the city
\nof Seattle and the city of Albuquerque permanently. If, in fact, if you look at the data,
\nyou can clearly see that, you know, Albuquerque and Seattle are trending
\nalong similar path in the years before 1979. But after
\nMicrosoft moved there, you start seeing Seattle
\ntaking off at an increasingly fast rate, attracting more
\nand more college graduates, more and more workers with master’s degrees, more and more startups
\nand investment in tech. As as Microsoft grows to the 80s and the 90s,
\nit becomes the center of a cluster that expands well behind
\nMicrosoft. It now employs androids of thousands, if not millions
\nof generate meters of good jobs in the area, which is ultimately why
\nwhy Seattle is booming. At the same time, you look at Albuquerque as being not doing
\nas well. Wages have been stagnating and it hasn’t been attractive to
\nhigh skilled labor to the same extent. So does the scoop to finish this one. And I think you should
\nsay that the amount of light and high school laboring Albuquerque is about the same now than it was in 1980.
\nIn the same when I mentioned here is the work in 2012. Right. But a low skilled worker
\nwill be making $4000 more in Seattle in 1980. And now it makes $14000
\nmore than Albuquerque Incident 2012, which is which is a dramatic difference. Right. So
\nthat impact to the cluster. It goes beyond the high skilled labor impacts, the low skilled labor workers
\nin those localities as well. One important fact that it’s often lost, especially people
\nwho are critical of this type of growth, is that the growth of the innovation
\nsector. Increases the demand for
\na lot of other jobs that are not in the innovation sector. And I think Seattle really
\nexemplifies it as the number of engineers, computer
\nscientist, mathematician and software developers grew in Microsoft
\nand in the in the Seattle area. The demand for local services also
\nincreased because these people needed local services. Anything from
\ngoing to a restaurant building. How is childcare? Doctors. Lawyers? Real
\nestate? Entertainment and retail.
\nAll these jobs are local services. And they they employ a vast
\nand diverse group of people that are not in tech. They’re not in innovation
\nand actually the majority of the workforce. That’s true in every city in the U.S.
\nAnd while we see story is that cities that are booming in terms of innovation
\nsector jobs are also increasing the demand for service
\njobs. So for people who have just regular jobs in a store and restaurant in a
\ndriving a taxi, or they’re architects, doctors and lawyers, and they
\nthey you know, there’s a powerful multiplier effect here. And for each tech
\njob, there are many jobs created in the local service sector. By my estimate, five
\nadditional jobs are created in the local service sector outside Witek for each
\nadditional job. And I think it’s what it means is that the growth of the tech sector really
\nis not generate benefits for not just for a group of people, but on a broad base.
\nThis is a good opportunity for to pivot to a general
\naspect of the book that I think is fantastic. And there is a constant concern
\nin general in society, economists, policymakers, politicians, the society at large
\nabout creating good jobs. And it’s a constant conversation.
\nNow, your book alludes alludes to that. So what are the main lessons
\nthat you can draw from your work about how. Do we create good jobs
\nin a society you talk about the need of supporting a viable ecosystem for companies? ECD,
\nyou just described the trickle down multiplier effect. And I would add something
\nbecause after all, we’re a policy center, policy oriented center. What is a role for public policy there?
\nIt’s a great question. It’s probably a big one of the main questions for our times.
\nIn a society where some cities are attracting
\na lot of high paying jobs and creating all this additional job creation
\noutside tech while other cities are struggling. You know, I think about the Rust
\nBelt. Think about places like Flint or Detroit. They clearly don’t have that
\ntype of job creation. The question about what to
\ndo to help the cities that are struggling to generate
\ngood jobs. It’s crucial. I
\nthink that the when you look at the history of high tech clusters
\nin the U.S., whether Silicon Valley. You know, the big of all or like smaller clusters that you see throughout
\nthe nation, there is not many examples. In
\nfact, there is no example of clusters that were created by a deliberate policy on the part
\nof a local government or a mayor or a state. Gardner said. Well, in a great day or the next
\nSilicon Valley, the typical story that you see is very similar
\nto the Seattle story, where a local company start growing
\nin a sector and and then you start attracting other companies that are similar. And around that
\ncompany, you see you fall into like an ecosystem gets formed that then makes that
\nplace even more attractive and attracts even more companies, more workers of that type.
\nThe EDI Millgate case, I think is exemplifies how many of the clusters
\nin the U.S. form. And that’s a big that that makes
\nit very challenging for the Flynt’s for the Detroit, because it’s really hard to identify who
\nis the next Bill Gates. It’s really hard to identify who should we attract.
\nI think one thing that local and state government can do that has been
\nestimated to have a very good return for the local economy is to invest in the education
\nof their residents at all levels, whether it’s lower level of education or higher
\neducation, like state universities, like where we’re sitting right now,
\nthat investment, it’s as as a very good return, social
\nreturn. And from the point of not just for the individual who get that schooling, but also
\nfor other members of the community who leave surrounded by highly skilled workers.
\nAnd I think that once once the community start increasing its level of education,
\nin particular in high school graduation and college graduation, what you see is that the
\neconomy changes and makes it more attractive to sort of double employers were, you know, providing good jobs.
\nCould you elaborate on your take of using subsidies and
\nother type of economic incentives that local governments sometimes tried to
\nimplement to entice companies and try to bring that process that otherwise, as you
\ndescribe it, will be more organic and spontaneous in nature? Yeah, it’s
\na big issue. We’re spending part of 9 in a paper
\nestimate that we’re spend about 90 billion dollars annually on this type of subsidies.
\nSo it’s a big form of welfare, if you will, if you want. It doesn’t target individual but targets
\ncompany. It’s also an incredibly bipartisan policy. People both in blue
\nstate and red state love it. And you can see with me that their hopes are that, you know, if if the story is true that the hubs are
\nso economically prosperous after. So that’s what I
\ncan see, why governors are trying. Yes. To come in and say, listen, it’s great one. Yes. And the dollar offers
\nah ah, the dollar to get off her. The demand to get offer is very large.
\nWe just saw last DRDO Amazon HQ to Saga.
\nSome locales were offering six billion dollars to attract Amazon’s jobs.
\nAnd Amazon is not the only one. I mean, DDD Tesla received 2 billion
\nfrom promised in Nevada to go to Reno. Fox home received 2 me 2 billion from the state
\nof Wisconsin to go to Wisconsin. So it’s it’s really big money.
\nIt’s there are. I don’t think we know the answer, whether this is money that
\nis efficiently spent on one end. If there are these forces of agglomeration,
\nthere’s this tendency of of success to generate more success for communities.
\nIt’s not crazy to think that you want to subsidize the first movers that if the
\nseed that will then generate the cluster. On the other hand, a lot
\nof these subsidies are generally a zero sum game among communities in the sense that Amazon
\nwas going to go somewhere in North America by offering subsidies, essentially what, transfering taxpayer
\nmoney to the company? The net effect on average for the for
\nthe country is not. It is actually zero.
\nWe studied the subsidies in a paper with Michael Greenstone, Eric Ormoc,
\nand we’ll look at manufacturing subsidies for manufacturing plants. We are finding that and we’re
\ncomparing it. We’re looking at discount is when they’re bidding. It’s a bidding process
\nwhere essentially just like an auction where counties are offering an out and increasing the bids and so
\non. And we were comparing what happens to the county that wins the bids to the county that made it to
\nthe last round and barely lost it. And we were finding
\nthat for the incumbent manufacturing plants in a county that wins, we’re
\nfinding that winning increased productivity in that county.
\nSo these are players that existed before the big new plan gets attracted. And we’re
\nmeasuring 2.5 to of protecting this plan. We’re finding that prohibited increases in wages tend to
\nincrease in the county as a as an effect as a causal effect of a win in this.
\nThat doesn’t mean that that’s money that you know, that it’s all money well spent here and there.
\nIf you’ve got five million dollars, if you spend five billion dollars and you
\nget an increase in productivity, you really need to compare how much you spend with how much you put
\nin. So so the short answer to your question is, I think this is an area of active research.
\nWe don’t know exactly the cost and benefits, I think in the aggregate is almost certainly not
\na good idea because it’s a zero sum game for individual communities. It might be
\na good idea when they’re targeting specific, specific companies.
\nBut it’s really hard to do it inefficient way because you really need to
\nthink you really need the local mayor and local going to be like a venture capitalist and have,
\nyou know, really pick the right. There are winners. And that’s a hard that’s a hard thing to do. So
\nit’s another topic that that local governments can have a role here is that
\nin some ways it’s hard for us to believe that everybody can be a success story. So some some cities are just have to realize
\nthat, you know, it’s better for our citizens to go somewhere else and go take advantage of this
\ncluster. There are gonna be they’re gonna be successful in becoming more successful with the size of the market matter and the force of attraction
\nthat you describe in the book. So having people giving people the ability
\nto move to the communities where they can be more prosperous, they can be more productive even in low skill jobs
\nis something that I currently wouldn’t do that great of a job. And I know you point to things
\nin the book, one, you talk about the the unemployment benefits they could be targeted
\nto how people actually move to find a better labor market. But the other one is the fact that housing supply
\nis a big issue in those clusters where. So so, you know. Do you see any cities dealing with those things
\nin any better way than others? Or do you agree that supply is the main issue
\nassociated with affordability? In cities across the country, I think supply is one of the key issues.
\nWhen you’re thinking about the big boom towns of the 1950s
\nand 1960s, places like Detroit, it was very easy for the average family to
\nwho was not living there to pack and move and move to Detroit and get a good job and get it.
\nIt was easy for them to find housing. But when you go about the boomtown of today,
\nSan Francisco, Seattle, Austin or Boston,
\nthese are much more expensive places to move. It’s not that easy for the average family to
\nrelocate there because of the cost of housing. And so
\nI think that the supply of housing in particularly productive cities
\nthat are experiencing increases in last.
\nYou know what? It’s a good thing, which is very strong labor demand and rising
\njob creation does play an important role. And what it does essentially
\ntransfer some of the benefit away from the families to the incumbent
\nland owners. We’re lucky enough to own land before affordable. And you point out that
\nthis sort of driver of inequality, that those those that is our virgin. This is generated not only
\ncomes to the labor market, but also to the housing market, right, because because there are a lot of the wealth is being created
\nthrough that. And that’s that’s that’s not a we can find that trend is easier in some ways, quote unquote,
\nto fight a trend for allow for more housing to be to be developing. But we fear I don’t know in America,
\nwe’re both from from places where I think we see a lot more density in the cities that we came from. And
\nAmericans find it a lot still. I think it’s time that cities
\nget used to high density in the right places. You want to build in smart ways. You don’t want to build
\nwithout any constraint. I don’t want people build on Golden Gate Park in San Francisco, nor on the hills.
\nI want people to build on undeveloped parking lot downtown. I want people to build.
\nIf there is one story building next to a train station in Silicon Valley, I want to develop
\nit to be able to build four, five, maybe six stories. We’re not talking about building skyscrapers. We’re talking about testifying
\nin the right places with the right strategies, not rocket science. Planners are figuring out a long
\ntime ago. We just need a political tie to turn.
\nI think the mayor is turning. Clearly, San Francisco’s changed a lot in that respect. I think the new
\nthe new planning commission and the new mayor are more prizing
\nthan in the past. And it’s been a long process. But
\nit’s. But but but there were some positive efforts in the legislator that
\nfailed. But the spurs of something. Yes. Scott Wiener, state bill
\nwas a very smart bill that would have a lot. Would have allowed density near transit
\nand would have constrained municipalities ability to.
\nTo veto these projects. I think the building
\nneeds to be done in a respectful way, respectful of the neighborhood.
\nA point I want to make is that it in an interesting way. I think building
\nmore in the right ways has environmental benefits as well, because if you don’t
\nbuild an urban core, well, you end up you induce sprawl on the periphery. And so
\nbuilding downtown or building where tragedy or building near jobs in places that
\nalready develop in the urban core actually as additional benefit because
\nit reduces the pressure on on the periphery of a city for
\nbuilding on the outskirts. The more units we can build in hot multi-unit buildings
\ndowntown, the fewer single family homes are going to be built
\non green land and the periphery. And I think that. The.
\nThe movement against development that developed in the 70s in many places in the
\nU.S. was motivated by good reason. People wanted to preserve
\nopen land and they did. After decades of massive suburbanization, they
\nwanted to preserve some of the land. And I think some of my
\nbest places were in the Bay Area are actually came from those fights and incredibly grateful that
\nthose fights took place. Today, though, people need to realize that you’ve done
\nwhat you want is you’re going to keep preserving green land on the periphery,
\nbut not to do that, you need to build more in the urban core and to build
\nthese marked ways, which means also add public transit and a local amenities.
\nAnd that’s a very progressive policy and a very environmentally friendly policy. So so the
\nthe the other the other issue that the it’s you bring out is a very important
\nissue is the fact that the reason for high school labor to be paid
\nso much more at this point in time is not only to force hide the man of high school labor,
\nbut the short supply of high skilled laborers who identify that as another point of of of something that we
\ncan do about it to avoid this sort of divergence. Right. Of of high skill. Are the benefits
\nto high skilled labor. And you pointed it to the fact that, you know, we might not be producing enough
\ncollege graduates, for example, in good college graduates. So there is clearly a giant abortion
\nin demand and people wanting to go to college. But the market has not adapt to that. I think we,
\nyou and I, both Polish professors, all of us, you’re working in university. And it’s
\nalways that’s something that we should be thinking about. ‘CAUSE Clearly, yes, having more high school laborers produce will be a good idea.
\nHow to do it is is very different. And I think I see universities as big negative players in
\nthe business because we are monopolists. We don’t like to adapt and like to grow. And
\nI feel that that we could be doing a lot more. What are your thoughts on that? I think this is one
\nof the key issue for the aggregate economy with the U.S. There is
\noverwhelming evidence that the supply of
\ncollege grads was growing very fast in the U.S. in the 60s and the 70s,
\nand it slowed down in the 80s and then after the 80s. And
\ntoday is not as high as it should be. One effect is that the
\npremium that the monetary premium for going to college has doubled. So even in the 70s,
\nthe 80s. Since since the late 70s. Yes. So even back then, college
\ngrads would make more than an art school graduate. But the difference was about 40
\npercent today. The difference is above 80 percent. And so
\nif you then measure it over a lifetime of a worker, we’re talking about big money, big
\nmoney. It’s a huge difference in terms of how much you can buy and your standard of living.
\nAnd I think ultimately that’s one of the reasons why inequality nationally has grown. Is the fact
\nthat that the gap between those who have a college degree or more and those
\nin high school degree or less, the gap in salaries has grown so much. And that gap has grown
\nso much in part because the supply of college God does not keep pace
\nwhere there’s growing demand for college grads. That comes from general changes in technology
\nin the workplace. Now, universities have reacted by increasing their
\ntuitions, just like if it’s supply, growing demand. Well, the
\nquality, not somewhat quantity, not so much the same quality as it used to be.
\nIt’s still even after the tuition increases, though, it’s still a good deal
\nlike a college graduation because it pays so much more than before. And because
\nit’s a benefit that keeps repeating itself every year for your life, for your career.
\nIt actually still dominates the increase in tuition.
\nIn fact, when you think about college. Graduation is an asset.
\nPeople have compared the return on investing in your children education with the return of investing
\nin the stock market. We return investing in the bond market, in real estate and so on. Well, for
\nthe past three years, investing in college education was been the best asset you could invest in.
\nThere was no other asset that had a higher return. Even just purely economic
\nbenefits, let alone all the other benefits that we would think a college education generates.
\nObviously better knowledge, all the intellectual benefit.
\nWhat what should be the role of universities? Well, I think that that certainly expanding
\nand targeting education better is crucial. I think
\nthat a very important player in this space should be community colleges set to air colleges
\nthat are playing this very important role of taking students who might otherwise stop the high
\nschool and then are going to two-year colleges. And then they prepare
\nworkers for Ford for high school. John four-four Yes, because perhaps
\nthe purpose there is to a. Up their skills game, not necessarily
\nthe credential game that often is attached to a college degree without necessarily
\na bump in the skills. Yes, and it could be college who do that have their skill
\nlevel. Actually, they they they are good engines on mobility.
\nThe I think a very good model. California is a very good model
\nwhere people have the best of the students. So some community college students stop
\nat 2 years and then go to get a job. Some the best can go can enroll into the
\nUniversity of California system and I have them in my classes. And it’s hard,
\nhardworking, bright students and they’re actually sometimes even better than the student who started
\nat Berkeley. So this transfer mechanism actually provides a way out for the top part of distribution
\nof the community college students to move up to a four year college. And it’s it’s.
\nI would. From what I see, from from what I see appears to be a generally successful
\nidea. One more question. Yeah, a couple
\nI have a couple of my own. I wanted to say I want to own. I wanted to talk to to ESCA
\nquite addressed the last question that we have here about the trend since 2012. Of course. I mean,
\nEnrico, you wrote the book in 2012. What would be
\nsome updates or new trends imagined? Imagine year your. Putting out
\na new edition of the new Geographe few jobs would be one or two things that
\nyou will be like. Oh, these would have to be there. Yeah, it’s interesting. I
\nread the book. I mean, I was working on the book during the Great Recession
\nand many of the trends that I was talking about were visible. But I would say that
\nthey are even more visible. I mean, the difference between the
\nsuccessful local economies, the San Francisco’s the Austin’s Deraa legs, the Boston
\nand the less successful look like Detroit. The Flint was clearly visible in 2012.
\nBut since then has become even more pronounced. When you look at wage
\nincome differences between these places as Karaka ever since.
\nIn some sense, this is the way I’m thinking
\nabout the Strand’s is not it’s not like a short-run
\nforces, but the more deep-seeded forces. And I think after the recession ended
\nit, the economic geography became even more even more polarized. Now, the thing
\nthat happened was that. I think it was previous rebel in 2016
\nwith an electro presidential election, and I think the geographical map of the
\nvote for Trump versus Clinton really tracks the
\nthe UDD economic geography that that I’m discussing in the book.
\nWe also see similar development in other countries. If you think about
\nthe vote for Brexit, it really tracks the the divide in the UK.
\nIt really tracks the divide between the more successful international,
\nglobal local economies in the UK like London and the more struggling
\nformer manufacturing places in northern England. And then the yellow
\nvest producing in France also is very, very similar. It’s a divide between
\nbetween three or four global cities in France and the provinces that they’re really
\nstruggling. So in all this, I think what what has happened is that one is the economic trends have strengthened.
\nThe economic strength that I describe in the book is strengthened. And two, that we’ve seen in a wave of
\npolitical outcomes that I think have been dramatic instead.
\nYes, I can be interpret as a reaction to the strands. So just to close it out, you’re here in Austin
\nand in walking here, you mentioned to me that if you look over your work over the past, let’s say 20, 30 years,
\none of the biggest winners of this divergence has been Austin. Austin is
\nan outlier. What did you call it in 1980? What would you describe as the 1980 versus now?
\nWell, I would characterize Austin Local.com in the 1980s as a sleepy provincial town.
\nAnd then outsiders characterize it today as a global center of innovation, one
\nthat attracts firms and workers from around the world
\nand is driven by indeed the very fortunate I describe in the book. I think that
\nthere are other cities that have. More tech jobs
\nnow. But in terms of changes over time proportionate to what they wear, Austin is the biggest
\nsuccess stories since 1980 in the U.S. Go. Thanks for joining us. Policy McCombs.
\nIt was a pleasure. Thank you for having me. Before we wrap up, you can get more information
\nin our medium page. Thanks for listening to Policy McCombs. See you next time.<\/p>\n"},"episode_featured_image":false,"episode_player_image":"https:\/\/podcasts.la.utexas.edu\/cepa\/wp-content\/uploads\/sites\/21\/2021\/05\/SC_PolicyMcCombs_Art-scaled.jpg","download_link":"https:\/\/podcasts.la.utexas.edu\/cepa\/podcast-download\/181\/policymccombs-enrico-moretti.mp3","player_link":"https:\/\/podcasts.la.utexas.edu\/cepa\/podcast-player\/181\/policymccombs-enrico-moretti.mp3","audio_player":null,"episode_data":{"playerMode":"light","subscribeUrls":{"apple_podcasts":{"key":"apple_podcasts","url":"","label":"Apple Podcasts","class":"apple_podcasts","icon":"apple-podcasts.png"},"google_play":{"key":"google_play","url":"","label":"Google Play","class":"google_play","icon":"google-play.png"},"google_podcasts":{"key":"google_podcasts","url":"","label":"Google Podcasts","class":"google_podcasts","icon":"google-podcasts.png"},"spotify":{"key":"spotify","url":"","label":"Spotify","class":"spotify","icon":"spotify.png"},"itunes":{"key":"itunes","url":"","label":"iTunes","class":"itunes","icon":"itunes.png"}},"rssFeedUrl":"https:\/\/podcasts.la.utexas.edu\/cepa\/feed\/podcast\/policymccombs","embedCode":"Enrico Moretti on The New Geography of Jobs<\/a><\/blockquote>