What ails the Skill India mission?

That the Skill India mission has been under-performing for a while became clear when the Sharda committee report on the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) pointed out major loopholes in the scheme, which have compromised the quality of training, and led to low placement rates. A new survey of youths trained under a similar skilling initiative for rural youth, the Deen Dayal Upadhyaya Grameen Kaushal Yojana (DDUGKY), suggests that skilling initiatives in India face other serious challenges as well.

The survey of 500 youths in Bihar conducted by Bhaskar Chakravorty and Arjun S. Bedi, researchers with the Erasmus University Rotterdam found that those trained under DDUGKY had a 29 percentage point higher chance of landing a non-farm job compared to those who did not. But after two to six months, the employment effect of the program drops to zero.

“A third of the placed graduates leave their jobs due to caste-based discrimination (such as denial of access to kitchens and toilets) and another third leave due to a mismatch between the salaries offered and their living costs,” the researchers write. “The upshot is that while the training program enhances job market prospects, other labor market factors undo the positive effects.”

Also Read: Skills Training and Employment Outcomes in Rural Bihar

Constituencies which elect dynast politicians are likely to be worse off in India. They have lower levels of economic growth and poor provisions of services such as health and education, according to a new study by Siddharth Eapen George and Dominic Ponattu, researchers with the Harvard University and University of Mannheim (Germany) respectively. Even voters perceive dynast politicians to be worse performers. These findings are based on an analysis of close races to Lok Sabha between 1999 and 2014 involving dynast politicians. Why dynasts continue to win despite performing poorly, and despite being seen to be performing poorly, remains an open question.

Also Read: Understanding the economic impacts of political dynasties: theory and evidence from India

A new paper by Alice H. Wu, of the University of California, Berkeley has taken the economics profession by storm by exposing its dark underbelly of gender bias. Wu’s analysis of conversations posted on a popular portal for economists called the Economics Job Market Rumors (EJMR) shows that while conversations about male economists tend to focus on their work those about female economists tend to focus largely on their appearance. Given that the forum is a casual and anonymous platform, the latent biases of participants come to the fore, the analysis shows.

Also Read: Gender Stereotyping in Academia: Evidence from Economics Job Market Rumors Forum

Superstitious beliefs can create self-fulfilling prophecies, according to a National Bureau of Economic Research working paper by Naci H. Mocan and Han Yu, economists with the Louisiana State University. The Chinese zodiac calendar considers the ‘dragon year’ to be auspicious. Parents often plan childbirth in these years. Because children born in these years are expected to do well, they also tend to be looked after better. This eventually reflects in their relatively higher scores in college entrance exams compared to children of other zodiac years, the study finds. ‘Dragon children’ are also more likely to attain college education compared to non-dragon children even when they are born to parents with similar incomes and education.

Also Read: Can Superstition Create a Self-Fulfilling Prophecy? School Outcomes of Dragon Children of China

The ability of firms to charge “mark-up”, i.e. a price above the marginal cost of production need not be viewed as evidence of increase in market power, according to the popular economics blog, Marginal Revolution. The blog-post critiques a recent research paper on the purported rise in market power of American firms since 1980s. According to the cited paper, the average mark-ups in USA have risen from 18% above marginal cost in 1980s to 67% now. However, a rise in mark-up could be because of rising fixed costs, the blog-post notes. For instance, rising rents in urban areas are likely to raise fixed costs for restaurants. Therefore, they would be forced to charge much above their marginal costs, in order to cover their big fixed cost of rent. This does not necessarily indicate increased market power, the blog argues.

Also Read: The Rise of Market Power?

Economics Digest runs weekly, and features interesting reads from the world of economics.