National Bureau of Economic Research
The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end dates for recessions in the United States.
|Leader||James M. Poterba|
The Russian American economist Simon Kuznets, and student of Mitchell, was working at the NBER when the U.S. government recruited him to oversee the production of the first official estimates of national income, published in 1934.
In the early 1940s, Kuznets' work on national income became the basis of official measurements of GNP and other related indices of economic activity. The NBER is currently located in Cambridge, Massachusetts with a branch office in New York City.
The NBER's research activities are mostly identified by 20 research programs on different subjects and 14 working groups. The research programs are: Aging, Asset Pricing, Behavioral/Macro, Capital Markets and the Economy, Children, Corporate Finance, Development of the American Economy, Economics of Education, Economic Fluctuations and Growth, Energy and the Environment, Health Care, Health Economics, Industrial Organization, International Finance and Macroeconomics, International Trade and Investment, Labor Studies, Law and Economics, Monetary Economics, Political Economy, Productivity, and Public Economics. From this research come the NBER's Working Papers.
Sources of Inequality Research
Can Universal Screening Increase the Representation of Low Income and Minority Students in Gifted Education?
The NBER or the National Bureau of Economic Research is a nonprofit organization, that focuses on examining in great detail economic growth of occurring problems in the U.S. In the article “Can Universal Screening Increase the Representation of Low Income and Minority Students in Gifted Education” by the National Bureau of Economic research, authors David Card and Laura Giuliano believe that low income and minority families are under represented in schools' gifted education courses. The authors address one occurring problem with theses tests: whether or not these minority students are overlooked by the system. Teacher and parent referrals would be acknowledged by comprehensive screening programs being introduced into school districts today. The screening tests that school districts are beginning to implement test students on a variety of characteristics to see whether or not they would qualify and succeed in gifted education programs. One issue that the new screening tests would fix compared to the older referrals is that non-English speaking students are overlooked because of a lack of parental referrals due to language barriers. When these tests were implemented on a small scale the statistics showed an increase in Hispanic students by 130 percent, and the number of black students increased by 80 percent. These statistics indicate that there are little to no consequences for minorities when these tests that are being implemented. In conclusion the authors suggest that the issues found in gifted educational programs can be fixed by comprehensive screenings.
Early Life Environment and Racial Inequality in Education and Earnings in the United States
One of the major research themes in the National Bureau of Economic research is sources of inequality. Kenneth Y. Chay, Jonathan Guryan, and Bhashkar Mazumder conducted a study in which they analyzed the substantial gaps in test scores on the AFQT and NAEP tests among black-white cohorts. The National Bureau of Economic Research published an article titled “Early Life Environment and Racial Inequality in Education and Earnings in The United States” to eliminate any possible biases in Chay, Guryan and Mazumders’ previous analysis and address the primary caveats.
The National Bureau of Economic Research uses the term "gains" to reflect improvement in racial convergence. Prior studies have concluded black gains in AFQT and NAEP scores in the early 1980s, black gains in college enrollment in the mid-1980s, and black gains in earnings throughout the 1990s. It is concluded that black gains were centered among cohorts of blacks born in the South during the 1960s and 70s; therefore, not only is the study geographically exclusive, but data is also inconsistent with the contemporary causes in the 1980s and 1990s. These results would rather be indicating that black gains in the 1990s were influenced by the Civil Rights and War on Poverty periods (25–30 years before the 1990s).
With response to the education gap, new findings show that the cross-cohort gains in college enrollment only pertained to blacks born in the South (there were no relative gains for black in the North). New findings also show that gains in relative earnings are limited to blacks born in the 1965 to 1972 cohorts (ages 28–35 in 2002) and show no gains for other age groups. To conclude, the findings of this updated study indicate that racial gains are due primarily in part to birth date and birthplace.
Racial Inequality in the 21st Century
The National Bureau of Economic Research analyzed the hindrances in quality of education of black and Hispanic students compared to the education of white students, the causes for black students to fall behind in the classroom faster that white students, as well as the attempts to fix these gaps in education between races. The most common factors contributing to racial gaps are thought to be “discrimination, culture, and genetics,” among others. The first study in the article concluded that the best way to eliminate racial inequality in the future, specifically with income inequality, would be to provide black and white students with the same skills. The next study indicates that white children show a higher level of education than black students as young as two years old. Possible explanations for this are that the older children are tested differently than younger children, which could have more to do with what the child has observed throughout the years than what they are innately capable of, that there are racial differences in the rates in which children develop, and that genes and environmental influences also come into play. The third study demonstrates that the inherent deviation in education in children before they enter school depends on their parental environment. Similarly, the fourth study concludes that intervention programs before children enter schools still need a lot of work and are beneficial in some ways, but ultimately do not close the gap in education between black and white students. The fifth study looks at children from kindergarten to 12th grade, finding that there is an education gap present, but it isn’t clear where it is most present. However, the next study about exclusively high school students shows that eighth grade test scores specifically play a key role in the growing gap between high school students and their graduation rates. The seventh study analyzes the effect of intervention programs on students once they have entered school, and indicates that improvement within schools and teaching alone can positively affect the achievement of black students and make them more comparable to that of white students. The entire NBER article ultimately concludes that we still do not know how to close the achievement gap because of the present color line, but there are certainly ways to increase individual student achievement that may eventually make schools more productive overall.
Public Universities, Equal Opportunity, and the Legacy of Jim Crow: Evidence from North Carolina
This study is a part of the NBER Working Paper Series, meaning it does not undergo the same peer and NBER board review as their regular research. Using data from the University of North Carolina system, which encompasses all public colleges in the state, the study looks at racial inequality at the collegiate level in regards to enrollment, completion, and various achievements, and the causation of such inequity. The study also mentions historically black colleges in North Carolina, and briefly questions whether they remain a positive contribution in contemporary America, arguing that they were a reaction to Jim Crow laws and tend to isolate African-American students from other racial groups.
Controlling for test scores, majors, and other scholastic factors, the study looks at administrative data from North Carolina K–12 public schools of eighth graders both in 1999 and 2004, categorized both by race and socioeconomic standing. It then tracks these students through their expected graduation dates of both high school and college, given they continued to a North Carolina university, and they examined whatever racial stratification occurred within those time periods based on enrollment and graduation rates at each university.
The study found that African-Americans in the North Carolina public school system are greatly disadvantaged. In one group, controlling for gender, the study found that, of the 2004 eighth graders, African-American students were 4.6% less likely to attend a North Carolina university than their white peers, and “5.5 percentage points less likely to enroll and graduate within four years.” However, when controlling for parental higher education and eighth grade tests scores, the study found that African-American students of the aforementioned grouping are more likely to attend and graduate within four years from a North Carolina university, which the study attributes to the abundance of historically black colleges in the state.
Council of Economic Advisers (CEA) Chairmen
(In Reverse Chronological Order)
In one study, the NBER was ranked as the second most influential domestic economic policy think tank (the first was the Brookings Institution).
The NBER is well known for its start and end dates of US recessions. The NBER uses a broader definition of a recession than commonly appears in the media. A definition of a recession commonly used in the media is two consecutive quarters of a shrinking gross domestic product (GDP). In contrast, the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Business cycle dates are determined by the NBER dating committee under contract with the Department of Commerce. Typically, these dates correspond to peaks and troughs in real GDP, although not always so.
The NBER prefers this method for a variety of reasons. First, they feel by measuring a wide range of economic factors, rather than just GDP, a more accurate assessment of the health of an economy can be gained. For instance, the NBER considers not only the product-side estimates like GDP, but also income-side estimates such as the gross domestic income (GDI). Second, since the NBER wishes to measure the duration of economic expansion and recession at a fine grain, they place emphasis on monthly—rather than quarterly—economic indicators. Finally, by using a looser definition, they can take into account the depth of decline in economic activity. For example, the NBER may declare not a recession simply because of two quarters of very slight negative growth, but rather an economic stagnation. However, they do not precisely define what is meant by "a significant decline," but rather determine if one has existed on a case by case basis after examining their catalogued factors which have no defined grade scale or weighting factors. The subjectivity of the determination has led to criticism and accusations committee members can "play politics" in their determinations.
Though not listed by the NBER, another factor in favor of this alternate definition is that a long term economic contraction may not always have two consecutive quarters of negative growth, as was the case in the recession following the bursting of the dot-com bubble. For example, a repeated sequence of quarters with significant negative growth followed by a quarter of no or slight positive growth would not meet the traditional definition of a recession, even though the nation would be undergoing continuous economic decline.
Announcement of end of 2007–2009 recession
In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009. In response, a number of newspapers wrote that the majority of Americans did not believe the recession was over, mainly because they were still struggling and because the country still faced high unemployment. However, the NBER release had noted that "In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle."
- "National Bureau of Economic Research Inc" (PDF). Foundation Center. Retrieved 22 August 2018.
- "History of the NBER". The National Bureau of Economic Research.
- Carson, Carol (1975). "The History of the United States National Income and Product Accounts: The Development of an Analytical Tool". Review of Income & Wealth. 21 (2): 153–181. doi:10.1111/j.1475-4991.1975.tb00687.x.
- "Major NBER Programs". The National Bureau of Economic Research.
- Card, David, Giuliano, Laura (September 2015). "Can Universal Screening Increase the representation of Low Income and Minority Students in Gifted Education?". NBER Working Paper Series. National Bureau of Economic Research. doi:10.3386/w21519.
- Chay, Kenneth, Guryan, Johnathan (October 2014). "Early Life Environment and Racial Inequality in Education and Earnings in the United States" (PDF). NBER Working Paper Series. National Bureau of Economic Research. doi:10.3386/w20539.
- Fryer, Jr, Roland G (August 2010). "Racial Inequality in the 21st Century: The Declining Significance of Discrimination". NBER Working Paper Series. National Bureau of Economic Research. doi:10.3386/w16256.
- Clotfelter, Charles T, Ladd, Helen F (September 2015). "Public Universities, Equal Opportunity, and the Legacy of Jim Crow: Evidence from North Carolina". NBER Working Paper Series. National Bureau of Economic Research. doi:10.3386/w21577.
- McGann, James G. (2010). "The global "go-to think tanks" 2011. The leading public policy research organizations in the world". Retrieved 2019-11-24.
- "National slowdown dims New England economic outlook". Boston Globe. May 30, 2008.
- "The NBER's Recession Dating Procedure". The National Bureau of Economic Research.
- "The NBER's Business Cycle Dating Procedure: Frequently Asked Questions". The National Bureau of Economic Research.
- Maggs, John (19 April 2010). "Who Decides When The Recession Ends?". NationalJournal.com. Archived from the original on 2010-04-23.
- "Recession 'over,' but the mood is glum". Buffalo News. September 27, 2010.
- "Economist who called recession's end sees recovery". Investment News. September 28, 2010.
- "CNN Poll: Nearly three-fourths say recession not over". CNN. September 26, 2010.
- "Meaning of word 'recession' varies". Delmarva News. September 28, 2010.
- "Editorial: Too early to say recession has run its course in U.S." The Daily Republic. September 28, 2010. Archived from the original on May 17, 2013.
- "Business Cycle Dating Committee, National Bureau of Economic Research". National Bureau of Economic Research. September 20, 2010.