Frank Levy

Upstairs, Downstairs: Computers And Skills On Two Floors Of A Large Bank

Many studies document a positive correlation between workplace computerization and employment of skilled labor in production. Why does this correlation arise? The authors posit that improvements in computer-based technology create incentives to substitute machinery for people in performing tasks that can be fully described by procedural or “rules-based†logic and hence performed by a computer. This process typically leaves many tasks unaltered, and management plays a key role—at least in the short run—in determining how these tasks are organized into jobs, with significant implications for skill demands. This conceptual framework proves useful in interpreting how jobs were affected by the introduction of digital check imaging in two departments of a large bank. In one department, the tasks not computerized were subdivided into narrow jobs; in the other department, management combined multiple linked tasks to create jobs of greater complexity. The framework may be applicable to many organizations.

The Sharp Slowdown In Growth Of Medical Imaging: An Early Analysis Suggests Combination Of Policies Was The Cause

The growth in the use of advanced imaging for Medicare beneficiaries decelerated in 2006 and 2007, ending a decade of growth that had exceeded 6 percent annually. The slowdown raises three questions. Did the slowdown in growth of imaging under Medicare persist and extend to the non-Medicare insured? What factors caused the slowdown? Was the slowdown good or bad for patients? Using claims file data and interviews with health care professionals, we found that the growth of imaging use among both Medicare beneficiaries and the non-Medicare insured slowed to 1-3 percent per year through 2009. One by-product of this deceleration in imaging growth was a weaker market for radiologists, who until recently could demand top salaries. The expansion of prior authorization, increased cost sharing, and other policies appear to have contributed to the slowdown. A meaningful fraction of the reduction in use involved imaging studies previously identified as having unproven medical value. What has occurred in the imaging field suggests incentive-based cost control measures can be a useful complement to comparative effectiveness research when a procedures ultimate clinical benefit is uncertain.

Offshoring Professional Services: Institutions and Professional Control

We examine the reasons why one might expect it to be more difficult to offshore professional work than manufacturing work in a globalized world. We then provide data on the variations in a specific case — the offshoring of diagnostic radiology from the USA, UK and Singapore. We show that existing theories on the ‘offshorability’ of jobs have not captured how national institutions and occupational regulations continue to define professional work. We then review the question of supply from Indias perspective and report that both macro-institutional and organizational contexts make it complicated for Indian doctors to supply much of this service.

Offshoring and Radiology

It turns out that even American radiologists, with their years of training and annual salaries of

Dropouts, Taxes and Risk: The Economic Return to College under Realistic Assumptions

250,000 or more, worry about their jobs moving to countries with lower wages, in much the same way that garment knitters, blast-furnace operators and data-entry clerks do. . . . Radiology may just be the start of patient care performed overseas. —andrew pollack “Who Is Reading Your X-Ray?” New York Times, November 16, 2003

Researching the robot revolution

Most published estimates of the economic return to college rest on a series of best-case assumptions that often overstate returns and, most importantly, obscure differences in return across different institutions. We simulate the economic return to college under more realistic assumptions using U.S. Census data combined with administrative data from the more selective University of California system and the less selective California State University system. Specifically, we adjust for delayed graduations, the probability of dropping out, progressive taxes on earned income, and risk aversion. We perform a bounding exercise for ability bias. These each reduce expected returns to a Bachelor’s degree. Contrary to prior “best case” estimates, and under reasonable bounds for the ability bias, we find that the return to a college degree in 2010 could be less than the interest on unsubsidized Stafford loans. Returns are particularly modest for young men at the less-selective CSU system, largely due to high dropout rates, delayed graduation, and a lower effect on labor force participation compared to women. Our analysis begins to bridge the gap between standard estimates of the economic return to college and the institutional performance metrics reported in the Obama Administration’s College Scorecard.

Skill Demand, Inequality, and Computerization: Connecting the Dots

Considering a program for cross-disciplinary research between computer scientists and economists studying the effects of computers on work.

Is College Worth It? The Economic Return to College Adjusted for Dropouts, Taxes, and Risk

Inequality has social costs: it may engender political divisions, aggravate crime, and lead low-income families into poverty from which they or their children may not emerge. Dramatic shifts in relative well-being therefore demand attention. In the late 1980s, economists discovered that the earnings of high- and low-wage workers were rapidly diverging (Levy and Murnane 1992). Chart 1 plots earnings inequality for the years 1963 to 1995, measured as the percentage difference in earnings between the 90th percentile worker and the 10th percentile worker.1 Between 1963 and 1979, this difference in earnings hovered steadily at approximately 220 percent among men and 190 percent among women. Over the next ten years, these gaps grew into fissures. The 90–10 weekly earnings differential expanded by 110 percentage points for both genders between 1979 and 1989 and then edged slowly upward throughout the 1990s. Mirroring these trends, educational earnings inequality—the earnings gap between college and high school educated workers—increased by two-thirds in the same decades (Chart 2). By 1999, educational inequality easily exceeded its high set in 1940, the earliest year for which consistent data are available.

The Economic Future of American Families: Income and Wealth Trends.

Most published estimates of the economic return to college rest on a series of best-case assumptions that often overstate returns and, most importantly, obscure differences in return across different institutions. We simulate the economic return to college under more realistic assumptions using U.S. Census data combined with administrative data from the more selective University of California system and the less selective California State University system. We find that college in 2010 is a risker investment than in earlier decades. Many students - particularly young men who cannot access top-tier universities - face an economic return on college that, while positive on average, can reasonably inspire caution among students and their parents due, in part, to high dropout rates. While our results are based on California data, we site research showing similar distinctions among higher and lower tier institutions exist nationwide. Our simulations can be seen as a natural extension of the Obama administration’s attempt to create a College Scorecard.

U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations

children younger than six, live in poverty. Hewlett is concerned about the conditions she deems responsible for this situation: negative changes both in family structure and in public policy. But she is also concerned about the way these same changes, together with recent economic constrictions, have affected middleclass children. In particular, she argues that middle-class children increasingly suffer from a time deficit. Children in families in which both parents work and neglect the education and moral development of their children face problems just as real as those faced by children who grow up in poverty. Hewlett documents her case carefully, with statistics from a variety of sources. And because her goal is to draw attention to the problems threatening American children and to stimulate public policy to rectify these problems, she paints a very bleak picture. In the first two sections of the book she offers little hope; occasionally she even seems to bemoan the loss of that time when mothers stayed home and only fathers worked to earn a living. In the third section, Hewlett takes a more pragmatic approach, discussing ways in which both the private and public sectors can tackle the problems she describes. It is to her credit that many of the solutions she proposes lie with private employers and their policies toward families. Indeed, she identifies several employers who already offer particularly innovative family-oriented benefits. She does note, however, that child care provided by employers can be a mixed blessing: because it enables parents to spend more time at work, it leaves them less time with, and for, their children. Unfortunately, Hewlett does not address this dilemma directly enough to suggest possible remedies. Hewlett also offers a laundry list of public policy changes that would increase support for families. Although the changes she calls for would undoubtedly redress the problems she identifies, her list is so encompassing that she leaves the reader little hope that all her recommendations could ever be implemented. Because Hewletts purpose is to increase public awareness, she can provide only a superficial treatment of many of the issues she raises. Her book is thus a good introduction to what is happening to the American family, but it leaves an in-depth analysis to others.