Class Notes: How divorce affects wealth, COVID-19 and education inequality, and more

This week in Class Notes:

• • Education-related searches after school closures are highest in affluent areas.
  • COVID-19 may speed up automation in jobs with high infection risk, which would affect mid-skilled women the most.
  • Divorce decreases personal wealth, but men may be in a better position to recover.
  • Our top chart shows a rise in high- and low-income jobs as middle-skilled jobs disappear.
  • Clara Totenberg Green explains how parent-created “learning pods” may deepen inequality as schools prepare to start the year online.
  • This week’s spotlight explores how policy drives up physicians’ wages and health spending.
  • And check out Isabel Sawhill’s new piece “Social capital: Why we need it and how we can create more of it,” a crunchy examination of waning trust and weakening relationships.

Inequality in education-related searches

In response to school closures, many families have sought out at-home learning resources. Bacher-Hicks et al. use internet search data to gauge inequality in families’ adaptation. They find a sharp increase across the board in searches for resources that help students transition to online instruction (like Google Classroom) and independent or supplemental instruction (like Khan Academy). But areas with above-median socioeconomic status searched at twice the rate of below-median areas, and searches related to online instruction were 15% higher for each additional $10,000 in an area’s mean household income. According to the authors, gaps in search rates suggest that low-income and rural students lack the resources to keep up with their higher-income peers while schools are closed.

COVID-19 and automation

In response to COVID-19, employers are investing in workers that never take a sick day: robots. To investigate the effects of the pandemic on automation, Alex Chernoff and Casey Warman identify occupations and regions most subject to automation and high infection risk. Consistent with previous automation research, the authors found that areas in the “American Heartland” have the most automatable jobs but not always an infection rate high enough to cause a quick shift. Black workers and women are more likely to work in positions at the intersection of automation and infection. Mid-educated women are twice as likely as men to work in a position vulnerable to both, likely because of the concentration of women in mid-skill jobs like those in health care and administration.

Divorce and personal wealth

Does divorce affect wealth inequity? According to Kapelle and Baxter, personal wealth declines substantially following separation and rarely recovers after divorce. Divorcees lose housing wealth and often lack the necessary capital for a deposit on a new home. The authors find that both men and women faced similar individual wealth losses, but argue that men may be in a better position to rebuild wealth because they typically have more wealth prior to the separation.

Top chart: Vanishing middle-class jobs

This week’s top chart from the Washington Post shows the decline in the number of medium-wage jobs and a rise in the number of low- and high-wage jobs. Using Census Bureau data from 1980 to 2015, David Autor argues that many middle-skilled jobs moved to lower-wage countries or were automated, pushing many workers into lower-paying positions.

Choice opinion: ‘Learning pods’ for the rich

“As school districts across the nation announce that their buildings will remain closed in the fall, parents are quickly organizing ‘learning pods’ or ‘pandemic pods’ — small groupings of children who gather every day and learn in a shared space, often participating in the online instruction provided by their schools…At face value, learning pods seem a necessary solution to the current crisis. But in practice, they will exacerbate inequities, racial segregation and the opportunity gap within schools. Children whose parents have the means to participate in learning pods will most likely return to school academically ahead, while many low-income children will struggle at home without computers or reliable internet for online learning.” writes Clara Totenberg Green in the New York Times.

Spotlight on health

Linking a registry of U.S. doctors to administrative tax data, Joshua Gottlieb and his colleagues describe physician earnings and evaluate the impact government spending on physician pay. Here’s what you need to know:

• • Physicians’ personal incomes ($344,000 on average) account for 8% of total health spending
  • 47% of health expenditures are paid by state and federal governments
  • Governments can alter wages with reimbursement rates and insurance subsidies
  • Health care costs would decrease by 1.8% if physicians’ average earnings were reduced to lawyers’ average earnings (a 20% cut)
  • A more feasible and targeted reduction in specialists’ wages could decrease health expenditures by 0.5%

Self-promotion

In her latest piece, “Social capital: Why we need it and how we can create more of it,” Isabel Sawhill argues that declining trust in others contributes to political extremism, worsens health, and depresses economic growth. Among her recommended remedies: encourage all young Americans to do one year of service, incentivize charitable donations with tax reform, and fund state and local policy.