Is rescuing migrants from the Med good value for money?

Thousands of people die each year trying to cross the Mediterranean to seek asylum in Europe. Christopher and Regina Catrambone, American and Italian entrepreneurs, decided to take matters into their own hands and set up their own private rescue mission.

Naturally when I read that

"a fundraising drive by the activist organisation Avaaz reached $500,000, slightly less than a month’s costs”,

I started wondering about cost effectiveness. Elsewhere the Guardian article states

"Setting up Moas was not cheap, with monthly operating costs of up to €600,000"

and

"The Phoenix rescued 1,462 people in 10 weeks"

So let’s go with the higher figure of €600,000 per month - over 10 weeks (2.3 months) that is a total cost of €1.4m (roughly $1.6m or £1m). And to save 1,462 people, that is a cost of £700 (~ $1000) per death averted.

Is that a lot or a little? As Owen has pointed out, the UK NHS considers anything less than £100,000 per death averted to be good value for money.

At the other extreme, childhood vaccinations, "long recognized as among the most cost-effective uses of limited health resources in low-income countries” (Disease Control Priorities) cost $275 per death averted.

At face value, Catrambone’s "Migrant Offshore Aid Station" (MOAS) looks like a pretty good value for money philanthropic bet.

Let them drown

3,000 people have drowned already this year trying to cross the Mediterranean to the EU, in pursuit of a better life. It is official UK government policy to not try and rescue such people, because that would only encourage others. I somehow find it hard to believe that even staunch opponents of immigration really think we should just stand by and watch people drown. 

via Duncan Stott and Phil Davis

When rigorous impact evaluation *does* make quite a big difference

If you care at all about unemployment and labour market policy, or really about much of social policy, this new paper from Esther Duflo and co-authors should have you quite worried.

The policy - pay a private provider for each unemployed person that they get into a job.

The result (part 1) - the policy was successful at getting unemployed participants into jobs.

The result (part 2) - almost all of these jobs were just taken from other people who would otherwise have got them. Pure displacement. No net change in unemployment.

Most impact evaluations don't measure such "spillover" effects or "externalities", because they are really hard to measure (neither do most non-randomised evaluations.., this is not a criticism of RCTs).

Ignoring externalities, we would have thus concluded, for example, that 100,000 euros invested in the program would lead 9.7 extra people to find a job within eight months. Since the eff ect disappears by 12 months, this already appears to be quite expensive, at about 10,000 euros for a job found on average four months earlier. But at least, it is not counterproductive. With externalities, investing 100,000 euros leads to no improvement at all.

Bruno Crepon, Esther Duflo, Marc Gurgand, Roland Rathelot, and Philippe Zamoray (2012), Do labor market policies have displacement effects? Evidence from a clustered randomized experiment

Everything you need to know about Britain and the EU

When the crazy radicals at the White House and the Economist magazine think Britain would be worse off outside the EU... just get a grip Britain. Get a grip. That is all. 

Eurozone labour markets not in everything

88 % of all surveyed employers stated that they had job vacancies between July 2010 and July 2011, out of which 37 % did not succeed to fill all of these jobs. Out of these, one in four tried to hire workers from abroad, but only about half succeeded. In particular large enterprises with 500 and more employees hired workers from abroad. In most cases, these foreign workers came from the European Union or the European Free Trade Area, but about half of the employers did also or exclusively recruit staff from third countries.  

Almost half of the employers with unfilled vacancies stated that they did not even consider this option. They explained this often by saying that they lack knowledge about the administrative procedure. Small and medium-sized enterprises perceived this obstacle more strongly than large employers. Furthermore, employers frequently stated to have been discouraged by the complexity of the procedure. Finally, many employers expected prospective labour migrants to lack German language skills.

From a new OECD survey, and one of the reasons why the eurozone is not an optimal currency area.

The Economics of the Euro

So according to this account from the Economist, it seems that Cameron may just have embarrassed himself this week (via: Chuku Umunna).

Still, the diplomatic mess aside, there is at least a silver lining for the economics profession, in correctly predicting the whole Euro mess. In Tyler's words,

The euro crisis is now here, and it seems our profession should win some of its status back.

The problem is fairly simple. For a stable currency union, you need some way of rebalancing economies running at different speeds. In the US, you have large federal transfers between the individual states, and also large-scale movement of people between states. So if Michigan goes down the tank, it gets subsidised by New York, and its citizens can easily move to another state with more jobs. The eurozone has no such automatic, built-in, large transfers between states, and much bigger language and cultural barriers to large scale movement than within the US.

So to some extent the last 10 years of euro success have been defying some fundamental economic laws of gravity. The latest debacle is basically irrelevant if it doesn't tackle these issues (Gideon Rachman at the FT agrees).

I am no euroskeptic. I love Europe, Europeans, and the convenience of the Euro. And I generally have very little time for the British Prime Minister and the lunatic fringes of his party. But given that Britain is not in the eurozone, I don't really see that trying to make this bold experiment in defying the basics of macroeconomic theory work is much of our business. 

Immigration to the UK: Some Perspective

 

You might ask what all the fuss us about.

From the Guardian Datablog.