NPR’s Robert Siegel speaks with New York Times columnist David Leonhardt about how this year’s college access index shows that economic diversity is shrinking at American colleges.

ROBERT SIEGEL, HOST:

How economically diverse are America’s colleges? That’s a question The New York Times has been asking in an annual survey the paper’s been doing for the past couple of years. The big takeaway this year, according to Times columnist David Leonhardt, is that economic diversity at the nation’s public, four-year colleges is on the decline. And David Leonhardt joins us.

Welcome to the program.

DAVID LEONHARDT: Thank you.

SIEGEL: First, tell us how you measure economic diversity in colleges.

LEONHARDT: There is a scholarship called the Pell Grant. It’s the largest federal scholarship. And colleges have to report how many of their students receive Pell Grants. That means their students come from roughly the bottom 50 percent or bottom 40 percent of the income distribution.

SIEGEL: And what are the colleges that you’re measuring?

LEONHARDT: We restricted this to colleges with a five-year graduation rate of at least 75 percent. And it’s actually depressing how few colleges fit that category – only about 170.

SIEGEL: Public colleges and universities have historically provided a crucial step up in the economic and social scale for young Americans of modest means. How big a decline are you seeing in economic diversity?

LEONHARDT: At some schools, it’s actually fairly shocking. At the University of California in San Diego, the Pell share of the freshmen class fell from 46 percent to 26 percent. And the reason is pretty clear – budget cuts from state governments.

SIEGEL: Meaning that more applicants just can’t attend or the colleges can’t help them pay for it? What is the mechanism there?

LEONHARDT: It’s sort of all of the above. With less money, colleges have less money to enroll lower-income kids. So some of them are going out and recruiting more affluent kids actively. Others are probably not admitting the lower-income kids. But I find this really worrisome because investments in education, historically, have really paid for themselves. And the idea that we’re making it harder for lower and middle-income Americans to go to flagship public universities strikes me as really short-sighted and self-defeating.

SIEGEL: This is the third annual New York Times survey. You’re seeing this trend just over three surveys, or has it been going on longer than that?

LEONHARDT: It’s been going on longer than that. So what happened with public colleges is that when the financial crisis hit in the 2009, 2010 window, a lot of states cut their budgets. They have stopped cutting them, but state support for higher education is still down 18 percent since 2008.

SIEGEL: Now, you’ve written about some increases in the share of students with Pell Grants at several private colleges and universities. And you say that successes don’t necessarily track with the size of a university or a college’s endowment. But despite some exceptions, from what I could see, all of the top 10 Pell Grant enrollments in private colleges are the predictable elite colleges. They were all Ivy’s or Amherst, Williams, elite women’s colleges.

LEONHARDT: Well, there are two different things that go into our ranking. One is the share of kids getting Pell Grants; the other is the cost. And you’re absolutely right. The colleges with the biggest endowments, places like Harvard and Stanford and Princeton, they charge the least for low-income kids, once you take financial aid into account. But when you look at how many Pell students they actually enroll, there’s more variation there. There are schools without huge endowments that are actually doing a better job enrolling poor kids than schools with bigger endowments. Vassar, Franklin and Marshall – these are schools that are not nearly as wealthy and yet they’re actually more economically diverse. And I think they really deserve praise for doing that.

SIEGEL: You’re measuring economic diversity. For years, we were more accustomed to seeing people measure racial, minority diversity. Do you think that such measures would track very closely to the rate of Pell Grants, or might the rate of African-American and Latino students be different from these measures of economic diversity?

LEONHARDT: I do think there would be real differences there. So if you look at the history of higher education, for a long time, these elite institutions excluded women, African-Americans, Latinos, Jews, just huge parts of the population. Starting in the late 1960s, into the ’70s and ’80s, they did much better on that score. The reason we started this is that the data suggests they haven’t done as well making progress on economic diversity as they have on racial diversity. And so while they enroll kids of every religion, every race, every region, often those kids are diverse in every way except economically. And we wanted to capture this other aspect of it.

SIEGEL: David Leonhardt of The New York Times, thanks for talking with us.

LEONHARDT: Thank you.

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A key part of President Trump’s tax plan is to repatriate corporate profits held overseas back to the U.S. With the lure of lower corporate rates, the idea is that companies will free up overseas earnings and instead invest in jobs and equipment in the U.S. A similar scheme was tried during the administration of George W. Bush, but companies used most of the money on stock buybacks or to pay dividends to shareholders.

ROBERT SIEGEL, HOST:

American companies have stashed an estimated $2.6 trillion in foreign profits overseas to avoid paying corporate taxes in the U.S. President Trump wants to cut the tax rate to encourage companies to bring that money here. He says it would boost investment and create jobs. As NPR’s John Ydstie reports, history suggests otherwise.

JOHN YDSTIE, BYLINE: It’s a pile of money worth more than the yearly economic output of countries like France and the United Kingdom. Under U.S. law, companies owe a 35 percent tax on those foreign profits, but they can defer the tax by holding the money overseas. President Trump’s tax overhaul proposal aims to get it back, as Treasury Secretary Mnuchin explained in late April.

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STEVEN MNUCHIN: We will have a one-time tax on overseas profits which will bring back trillions of dollars that are offshore to be invested here in the United States to purchase capital and to create jobs.

YDSTIE: During the campaign, President Trump said it would be a phenomenal thing.

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PRESIDENT DONALD TRUMP: By taxing it at 10 percent instead of 35 percent, all of this money will come roaring back into our country, and lots of good things will start to happen.

YDSTIE: But it turns out it’s not a new idea. Back in 2004, under President George W. Bush, Washington enacted a similar tax break that promised the same things.

C FRITZ FOLEY: It’s called the Homeland Investment Act. It was also referred to as the American Job Creation Act.

YDSTIE: Harvard Business School professor C. Fritz Foley says that law temporarily reduced the tax on foreign profits to just 5.25 percent. And it’s specified that the repatriated money be used only for investments in the United States. Five years later, Foley co-authored a report that found the so-called tax holiday did not result in new investments and new jobs.

FRITZ FOLEY: We found that the money that was repatriated was not associated with increased capital expenditures, increased employment or increased research and development.

YDSTIE: Instead, Foley says, the money was used to pay dividends to shareholders or buy back shares in companies. Foley says there was probably some economic benefit in that as shareholders reinvested their payouts or increased their consumption. So the tax holiday did not live up to its billing, Foley says, but it did provide one more sign that the U.S. corporate tax system needs to be fixed.

FRITZ FOLEY: We badly need tax reform, international tax reform here in the United States. Our system puts our companies at a disadvantage. And this holiday was a temporary relief from some of the distortions that our tax system imposes.

YDSTIE: Joseph Rosenberg of the Tax Policy Center says there is broad agreement that corporate tax policy needs an overhaul.

JOSEPH ROSENBERG: Unfortunately, that’s about where the agreement ends.

YDSTIE: In fact, Republicans and business groups are fighting among themselves right now over how to proceed. Foley and Rosenberg agree that a lower tax on profits currently stashed overseas would make sense as part of broader tax reform, but Rosenberg is concerned that broad reform might fail, and the temporary tax holiday might survive.

ROSENBERG: That would be unfortunate because it really does not address the fundamental problems of the corporate tax system and in some ways makes it much worse.

YDSTIE: Because if it did unfold that way, it would reinforce the notion among companies that it’s a good idea to build another hoard of cash overseas and just wait for the next tax holiday. John Ydstie, NPR News, Washington.

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NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Harvard Business School professor Mihir Desai says the unemployment rate is the lowest its been in a decade. He speaks with NPR’s Michel Martin about the increasing options for recent graduates.

MICHEL MARTIN, HOST:

As the class of 2017 prepares to enter the job market, there is some good news waiting for them. The unemployment rate is the lowest it’s been since 2007, but these students have also come of age during a recession followed by a sluggish recovery. So we were wondering how all this could be affecting these freshly minted graduates and job seekers.

To talk about this, we called Mihir Desai. He’s a professor at the Harvard Business School. He has a new book out called “The Wisdom Of Finance.” But we called him because he published a piece this week in The Crimson, Harvard’s student newspaper. In the spirit of full disclosure, that was my first journalism gig. Professor Mihir Desai, thank you so much for joining us.

MIHIR DESAI: Thanks so much. It’s a pleasure.

MARTIN: So the last time the unemployment numbers were this low, these students were in third grade. Do you see an impact on this generation of having grown up in this timeframe?

DESAI: Yeah. I think part of what’s happened is they don’t allocate as much importance to economic outcomes that, perhaps, previous generations did. So they grew up in an era of reduced expectations in some ways. And as a consequence, they look for different ways to fill their life up which is not purely professional.

In some ways, that’s quite helpful. On the other hand, it is a time in their life when they really should be dedicating themselves to building the human capital that will last them through the rest of their lives.

MARTIN: And let me get to the piece that caught our eye which is the piece that you posted in The Crimson, “The Trouble With Optionality” which is a way of saying – can you break it down in layman’s terms for us – what? – hedging your bets?

DESAI: Yeah, exactly.

MARTIN: Keeping your options open?

DESAI: Yeah. So the number of young people I see who talk about maximizing optionality which is just a fancy way of saying I want to make sure and have as many options as possible, so I think that sounds like a great strategy. But what I’ve observed over the last several years is these people become obsessed with optionality, you know, with having options. And instead of doing what we think that we do, which is enable risk-taking, you know, which is what options are supposed to be able to do. Right? You don’t acquire options just for their own use. You do it, so you can actually take on big risks. What I observed these people doing is just habitually acquiring options. They just get so used to the process of acquiring options that they never really execute on this larger vision of what they want.

So part of what I wanted to do in the piece is say, look, that’s not the right way to think about this. In fact, when you do these things that acquire options, for example, working at prestigious firms – these are, again, for the elite graduates going to grad school – you know, your social network, yes that’s wonderful. It allows you to have a lot of optionality. But don’t forget that the really great things in life come from big, risky investments. And I think that’s a really important piece of what people are missing out on. And in particular, you can get stuck. You can get stuck in a place where you think you’re maximizing your options, and then you wake up. And you’re, you know – you’re still there 20 years later.

MARTIN: That was going to be my last question. It’s commencement season, and everybody from Hillary Clinton to Will Ferrell is – as we just heard – are offering advice to recent graduates. So any other advice that I didn’t have the wit to squeeze out of you to this point?

DESAI: Well, yeah. It is – it’s always remarkable how in some ways consistent graduation advices, and, in some ways, that makes it anodyne, but that doesn’t make it any less true, which is the pursuit of things that we truly love is the secret to professional happiness and blocking out the noise.

I guess that’s one thing I would add which is there is so much noise out there, noise about what, you know, the unemployment rate is or noise about what you should be doing with your life or noise about what your friends are doing or what your parents want you to do. Just block it all out. Look inside yourself. Find out who you are and pursue that. So block out all the noise I think is an important piece of it as well.

MARTIN: That was Mihir Desai, professor at the Harvard Business School. His latest book is “The Wisdom Of Finance: Discovering Humanity In The World Of Risk And Return.” And as we said that we also called him for his piece posted in The Crimson, “The Trouble With Optionality.” Professor Desai, thank you so much for speaking with us.

DESAI: Thanks so much Michel.

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NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Professional sports generate a tremendous amount of money, but it’s tricky to know exactly what part of sports generates that money. LeBron James unintentionally ran a nearly perfect economic experiment by unexpectedly leaving Cleveland and then, three years later, returning with almost no warning. A pair of economists have now used James’ prodigal son data to look at the financial impact a single superstar can have on a local economy.

ARI SHAPIRO, HOST:

The Cleveland Cavaliers and Boston Celtics tip off tonight. If the Cavs win they’ll go to the NBA finals for the third time in a row. Some economists are among the people watching. They say star player LeBron James has let them run a remarkable experiment. Here’s Kenny Malone from our Planet Money podcast.

KENNY MALONE, BYLINE: Daniel Shoag is a Harvard economist, but also a diehard Cleveland Cavaliers fan.

DANIEL SHOAG: There were some great days and some pretty dark days (laughter).

MALONE: You may recall the heartbreaking career path of LeBron James – started in Cleveland, left Cleveland.

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LEBRON JAMES: And this fall I’m going to take my talents to South Beach.

MALONE: And then four years later came back to Cleveland.

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UNIDENTIFIED ANNOUNCER: Cleveland is a city of champions once again.

MALONE: Economists have spent decades studying the business of sports. Is a new stadium worth the cost? Does a championship create jobs? But LeBron James allowed them to test something new – the economic impact of a single player, or as the working paper calls it, local externalities from a superstar athlete because here was the same guy in the same city – there, then gone, then there again.

SHOAG: Because he’s returning to the same place – you know, the correct place – there’s one less thing to worry about econometrically.

MALONE: Now, to show you the LeBron effect that Shoag and his co-author found, I visited one of the many, many bars and restaurants in their study.

MIKE MILLER: See how – up here?

MALONE: This is Mike Miller, the owner of a bar called Wilbert’s. It’s about 500 feet from the Cavs arena. And Miller is looking up at the ceiling, squinting at some brownish splatter stains.

MILLER: I would think it looks like beer.

MALONE: It’s a dark beer, though.

MILLER: Yeah.

MALONE: Booze on the ceiling, it turns out, a leading indicator of the LeBron effect. The study found that bars and restaurants like this, right next to the stadium, they got crushed when LeBron James left.

MILLER: And I think it ended up cutting close to 80.

MALONE: Eighty percent?

MILLER: Yeah. Yeah. Yeah, it was bad.

MALONE: Miller was writing resumes, looking for a new job, but then LeBron James came home.

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UNIDENTIFIED ANNOUNCER: As we come up on a minute remaining…

MALONE: The first time that booze ceiling thing happened at Wilbert’s it was a Sunday when the bar typically would have been closed. But it was packed with Cavs fans watching LeBron win the team’s first championship.

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UNIDENTIFIED ANNOUNCER: It’s over. It’s over.

MILLER: Oh, my God, there was alcohol flying everywhere. I couldn’t believe it.

MALONE: I mean, how high up is that, 10 feet?

MILLER: Yeah, that’s got to be 10 feet. Yeah.

MALONE: Sign of success.

MILLER: I guess so.

MALONE: The LeBron study found a nearly 25 percent increase in employment for businesses like Wilbert’s near the stadium. And the LeBron economists give the credit to LeBron coming back. They know this because of the natural experiment of leaving and coming back. And it takes something like this to really study the economic impact of sports because unfortunately, they don’t just hand billion-dollar sports franchises over to academics.

BRAD HUMPHREYS: Now, we – I mean, ideally they would put me in charge as the sports czar of the country and I would just randomly move teams around.

MALONE: You would be a cruel czar.

HUMPHREYS: Well, fans would hate me, right.

MALONE: Brad Humphreys is a sports economist at West Virginia University and says LeBron is a great example of one of these naturally occurring experiments. Another is from 2004 and 2005, when the National Hockey League had a lockout. Because of a labor dispute, there suddenly was no professional hockey for people to spend their money on.

HUMPHREYS: But those people who would’ve gone to NHL games went to minor league baseball games. They went to the movies. They went to a bowling alley. They went to an art gallery.

MALONE: In other words, hockey wasn’t creating new spending. It was attracting money people were already going to spend. Humphreys says that’s almost certainly the case with the LeBron effect as well. Daniel Shoag, the co-author of that LeBron paper, says that one of the lessons here is that we tend to focus a lot on the financial impact of a stadium, but it really does matter who’s playing in that stadium. That’s his lesson, at least, as an economist. His lesson as a Cavaliers fan…

SHOAG: I guess this just shows that LeBron should never leave again.

MALONE: Is that your conclusion?

SHOAG: I think that’s a pretty reasonable conclusion, yeah (laughter). I’m not sure I needed the data to show me that.

MALONE: Kenny Malone, NPR News.

(SOUNDBITE OF HOT 8 BRASS BAND’S “IT’S REAL – LACK OF AFRO REMIX”)

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NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Oil producers across the country are watching to see what OPEC does at its meeting in Vienna this week, since the cartel of oil-exporting countries has recently played a big role in turning around a two-year U.S. slump.

There are more than twice as many U.S. rigs drilling for oil as a year ago, a turnaround that’s felt keenly in places like the Bakken oil patch in North Dakota. Cigarettes and chewing tobacco are flying off the shelves of the gas station Angela Neuman manages in the town of Williston.

“Now there are so many new people, I cannot get a handle on that,” she laughs.

A year ago the price of oil was so low that it made drilling less profitable. Production dropped and companies in North Dakota and elsewhere made painful layoffs.

Across Williston, at the Winterton Suites hotel, sometimes there was only a guest or two, and the price plunged from $300 a night to the bargain rate of $100.

“We almost actually thought we were going to lose it for a little bit,” says Winterton’s manager Chelsey Crozier.

Occupancy has ticked back up this spring.

“Of course, [it’s] not as crazy as it was,” she says, “but it’s doing better.”

In the dizzying boom-bust cycle of the oil industry, things were crazy busy here a few years back, when a barrel of oil was around $100. But that led to a surge in production that flooded the market, pushing the price of oil down. That’s when OPEC stepped in to boost prices by cutting its own production, and Russia followed suit.

“Effectively, these cuts that were put into place last fall are being filled in by other countries,” including the U.S., says Eugene Graner, with Heartland Investor Capital Management in Bismarck.

U.S. production has risen to 9.3 million barrels of oil per day, close to the level before prices plummeted.

When OPEC meets Thursday, it’s expected to keep its cuts in place. Graner says that would help ensure this mini-boom in the U.S. keeps going, though he does not foresee another spike in the price of oil.

President Trump has promised to unleash the energy industry by lifting all kinds of regulations. His full rollback has not happened yet. But energy analyst Trisha Curtis with PetroNerds says Trump’s move to approve the Dakota Access Pipeline is helpful.

“That gives sort of a green light,” she says. “If you were a little hesitant on the Bakken on activity or development, that certainly is a game changer.”

The Dakota Access Pipeline is slated to come online next week. It will make transporting Bakken oil cheaper, and allow it to more easily reach a new market in the Gulf Coast.

In North Dakota, this means a lot more jobs will be needed to produce that oil. At the Job Service North Dakota office in Williston, customer service representatives are busy taking applications.

“Over 150 jobs we posted this week,” says manager Cindy Sanford.

That’s more jobs than there are local workers, she says, and the openings keep coming.

Amy Sisk reports for Prairie Public Broadcasting and forInside Energy,a public media collaboration focused on America’s energy issues. You can follow her@amyrsisk.