From the postponed baseball game at the Red Sox’ beloved
Fenwick Park to cancelled classes at Harvard University to empty
cubicles at leading fund management firms, the New England city
is likely to suffer hundreds of millions of dollars of economic
losses for the day people stayed home, according to initial
estimates.

“There is an economic cost to the city of Boston in the near
term,” said David Gergen, a professor at Harvard Kennedy School.
He added that the impact would be partially offset when the city
resumes its everyday business.

The Boston metropolitan area, which includes nearby
Cambridge and Quincy, is the ninth largest in the United States.
Its annual gross domestic product is $325 billion, and it
produced just under $1 billion in goods and services per day in
2011, according to the most recent data from the U.S. Bureau of
Economic Analysis.

That is about 2 percent of the $45 billion in overall U.S.
daily economic activity, said Paul Edelstein, director of
financial economics at IHS Global Insight in Lexington, a city
near Boston.

The total hit from the shutdown could be less than $1
billion, Edelstein said, in part because telecommuting has
dampened the impact.

“A lot of work is getting done, some businesses are open and
there’s going to be a bounce-back from a lot of this down the
road,” he said, referring to overtime pay for police and other
emergency responders working long shifts.

Three people were killed and 176 were injured in Monday’s
bombings, the worst such attack on U.S. soil since Sept. 11,
2011. In the aftermath, the usually busy Copley Square section
of the city of 625,000 was paralyzed as investigators probed for
evidence and shellshocked Bostonians and marathoners struggled
to make sense of what happened.

Four days later, on Friday, activity in greater Boston
ground to a halt as police tracked suspect Dzhokhar Tsarnaev,
19, through the working class Boston suburb of Watertown. Police
captured him on Friday night, nearly 24 hours after killing his
26-year-old brother Tamerlan Tsarnaev in a gunfight.

Officials shut mass transit, and Amtrak suspended service
between Boston and New York City while the manhunt progressed.
Residents were advised to stay put, leaving the city’s normally
vibrant streets empty.

A slew of concerts and the Bruins hockey game were
postponed, while restaurants and shops were shuttered.

Still, at least a few businesses were open, including Yummy
House Chinese Restaurant on Beacon Street in Brookline. In
Cambridge, near the apartment of the Tsarnaev brothers, Troy &
Anthony’s Barbershop was packed – in defiance of a police
request for all businesses to close.

Boston is rated triple-A by Fitch Ratings, one of three main
Wall Street credit rating agencies and analyst Kevin Dolan
doesn’t expect the deadly events to have a financial impact.

“It’s very hard to tell, but the revenue loss to the city,
or the economy, is probably close to zero,” said Chris Mier of
Loop Capital in Chicago.

Harvard’s Gergen is convinced the city will bounce back.

“I think there is going to be a silver lining to these
terrible days,” he said. “I bet next year’s marathon draws many
more people than this year’s.”

Bartali is a symbol of a different era, when Italy was poorer, more naive but much more confident in its future.

But now, a new book, the first in English about Bartali, chronicles his victories before and after World War II and his role as a courier who helped countless Jews during the conflict to a whole new audience.

“Bartali’s story fascinated us because it combined this incredible comeback story with an untold tale of wartime heroism,” said Aili and Andres McConnon, two brothers who spent 10 years researching “Road To Valor – A true story of World War II, Italy, the Nazis and the Cyclist who inspired a nation”.

Bartali has a long list of success – he won the Tour de France twice, in 1938 and in 1948, and the Giro d’Italia three times in 1936, 1937 and 1946. Because of the war, he holds the records for the longest time span between victories.

Born in 1914, Bartali faced an uphill battle from the beginning. His life-long love affair with the bicycle started when he bought a second-hand bike from the savings of a summer job and rode it to school, up and down the hills around Florence.

Despite an unquestionable talent, he had to fight his parents’ fears for his safety before being allowed to start racing.

His younger brother Giulio died in 1936 in a bike accident and when the first victories arrived, he had to face the Fascist regime’s attempts to use his success and fame for political propaganda.

A RARE EXAMPLE

Then there was the war. And Bartali showed extraordinary courage.

Hiding forbidden papers in the frame of his bicycle, Bartali smuggled counterfeit identity documents past Fascist and Nazi checkpoints.

He fooled the soldiers, who assumed he was in training, and helped save Jews from deportation to death camps.

In 2006, six years after his death, Bartali was posthumously awarded a medal from Italian President Carlo Ciampi for his acts of bravery during the war.

When the conflict was over, returning to professional cycling was not an easy feat. Winning against competitors ten years younger seemed implausible at best.

But he defied the odds to win a second Tour de France.

In 1948, he won three consecutive mountain stages, an unprecedented feat that has still not been matched.

The news of his wins helped ease political tensions in Italy after a failed assassination attempt on Communist leader Palmiro Togliatti had left the country on the brink of civil war.

Eating, drinking and smoking in a way that would be unimaginable today, Bartali managed to succeed against all odds at times when substance abuse was not even a topic of discussion.

Bartali retired from cycling in 1954, aged 40. He died of a heart attack in 2000.

(Editing by Julian Linden)

“The system … is the Spanish government bails out Spanish banks, and Spanish banks bail out the Spanish government,” Stiglitz said in an interview.

The plan to lend Spain up to 100 billion euros ($125 billion), agreed on Saturday by euro zone finance ministers, was bigger than most estimates of the needs of Spanish banks that have been hit by the bursting of a real estate bubble, recession and mass unemployment.

If requested in full by Madrid, the bailout would add another 10 percent to Spain’s debt-to-gross domestic product ratio, which was already expected to hit nearly 80 percent at the end of 2012, up from 68.5 at the end of 2011. That could make it harder and more expensive for the government to sell bonds to international investors.

With Spanish banks, including the Bank of Spain, the main buyers of new Spanish debt in 2011 – according to a report by the Spanish central bank – the risk is that the government may have to ask for help from the same institutions that it is now planning to help.

“It’s voodoo economics,” Stiglitz said in an interview on Friday, before the weekend deal to help Spain and its banks was sealed. “It is not going to work and it’s not working.”

Instead, Europe should speed up discussion of a common banking system, he said. “There is no way in which when an economy goes into a downturn it will be able to sustain policies that will restore growth without a form of European system.”

Stiglitz, a former economic advisor to U.S. President Bill Clinton, is a long-standing critic of austerity packages. He also wrote book attacking the International Monetary Fund for policies it has imposed on developing countries as a precondition for emergency loans.

What the European Union has done so far has been minimal and wrong in its policy direction because austerity measures to restore risk have the effect of reducing growth and increasing debt, he said.

“Having firewalls when you’re pouring kerosene on the fire is not going to work. You have to actually face the underlying problem, and that is, you’re going to have to promote growth,” Stiglitz said.

Instead, sweeping reforms to make Europe more of a fiscal union are needed to solve the debt crisis, reinforce the single currency and ultimately help Germany which, as the richest country in the union, will have to bear the highest cost of guaranteeing any commonly issued debt and providing more resources to boost public spending.

“Germany keeps saying that the strengthening is fiscal discipline, but that is a totally wrong diagnosis,” Stiglitz said.

Germany is expected to propose at the end of June a road map toward a European fiscal union, but Berlin favors joint euro bonds, backed by all the area’s governments, only as a medium-term goal, once other countries have fixed their high debts and budget deficits through austerity measures so they are not reliant on Berlin’s deep pockets.

“Eurobonds is just one institutional arrangement that could work, there are others: a common treasury,” said Stiglitz adding that ultimately “there has to be a way of raising revenue across Europe, to support the weaker countries in case of an economic downturn.”

While the economies of Spain, Greece, Italy and Portugal are contracting, Germany grew 0.5 percent in the first quarter. The divide in the euro area in many cases reflects austerity programs to tackle debt and deficit problems.

Critics have said the focus on cutting costs is aggravating Europe’s crisis and jeopardizing the future of the single currency. Greek elections next week could bring to power parties opposed to the tough conditions attached to the country’s EU and IMF-led rescue plan and raise the possibility of Greece leaving the euro zone.

“Germany is going to have to face the question, do they want to pay the price that would follow from the dissolution of the euro, or do they want to pay the price of keeping the euro alive?” Stiglitz said. “I think the price they will pay if the euro falls apart will be greater than the price they will pay for preserving the euro. I hope they will come to realize that, but they may not.”

Stiglitz’s latest book, “The Price of Inequality: How Today’s Divided Society Endangers Our Future,” is scheduled to be published on Monday. It challenges the idea that inequality is an unavoidable evil needed to sustain economic expansion.

“We could have more growth and less inequality,” Stiglitz said, “so we could do better in both dimensions simultaneously.”

(Reporting By Tiziana Barghini, Editing by William Schomberg and Stacey Joyce)

“The system … is the Spanish government bails out Spanish banks, and Spanish banks bail out the Spanish government,” Stiglitz said in an interview.

The plan to lend Spain up to 100 billion euros ($125 billion), agreed on Saturday by euro zone finance ministers, was bigger than most estimates of the needs of Spanish banks that have been hit by the bursting of a real estate bubble, recession and mass unemployment.

If requested in full by Madrid, the bailout would add another 10 percent to Spain’s debt-to-gross domestic product ratio, which was already expected to hit nearly 80 percent at the end of 2012, up from 68.5 at the end of 2011. That could make it harder and more expensive for the government to sell bonds to international investors.

With Spanish banks, including the Bank of Spain, the main buyers of new Spanish debt in 2011 – according to a report by the Spanish central bank – the risk is that the government may have to ask for help from the same institutions that it is now planning to help.

“It’s voodoo economics,” Stiglitz said in an interview on Friday, before the weekend deal to help Spain and its banks was sealed. “It is not going to work and it’s not working.”

Instead, Europe should speed up discussion of a common banking system, he said. “There is no way in which when an economy goes into a downturn it will be able to sustain policies that will restore growth without a form of European system.”

Stiglitz, a former economic advisor to U.S. President Bill Clinton, is a long-standing critic of austerity packages. He also wrote book attacking the International Monetary Fund for policies it has imposed on developing countries as a precondition for emergency loans.

What the European Union has done so far has been minimal and wrong in its policy direction because austerity measures to restore risk have the effect of reducing growth and increasing debt, he said.

“Having firewalls when you’re pouring kerosene on the fire is not going to work. You have to actually face the underlying problem, and that is, you’re going to have to promote growth,” Stiglitz said.

Instead, sweeping reforms to make Europe more of a fiscal union are needed to solve the debt crisis, reinforce the single currency and ultimately help Germany which, as the richest country in the union, will have to bear the highest cost of guaranteeing any commonly issued debt and providing more resources to boost public spending.

“Germany keeps saying that the strengthening is fiscal discipline, but that is a totally wrong diagnosis,” Stiglitz said.

Germany is expected to propose at the end of June a road map toward a European fiscal union, but Berlin favours joint euro bonds, backed by all the area’s governments, only as a medium-term goal, once other countries have fixed their high debts and budget deficits through austerity measures so they are not reliant on Berlin’s deep pockets.

“Eurobonds is just one institutional arrangement that could work, there are others: a common treasury,” said Stiglitz adding that ultimately “there has to be a way of raising revenue across Europe, to support the weaker countries in case of an economic downturn.”

While the economies of Spain, Greece, Italy and Portugal are contracting, Germany grew 0.5 percent in the first quarter. The divide in the euro area in many cases reflects austerity programs to tackle debt and deficit problems.

Critics have said the focus on cutting costs is aggravating Europe’s crisis and jeopardizing the future of the single currency. Greek elections next week could bring to power parties opposed to the tough conditions attached to the country’s EU and IMF-led rescue plan and raise the possibility of Greece leaving the euro zone.

“Germany is going to have to face the question, do they want to pay the price that would follow from the dissolution of the euro, or do they want to pay the price of keeping the euro alive?” Stiglitz said. “I think the price they will pay if the euro falls apart will be greater than the price they will pay for preserving the euro. I hope they will come to realize that, but they may not.”

Stiglitz’s latest book, “The Price of Inequality: How Today’s Divided Society Endangers Our Future,” is scheduled to be published on Monday. It challenges the idea that inequality is an unavoidable evil needed to sustain economic expansion.

“We could have more growth and less inequality,” Stiglitz said, “so we could do better in both dimensions simultaneously.”

(Reporting By Tiziana Barghini, Editing by William Schomberg and Stacey Joyce)

Within weeks, the 34-year-old was on his way to Houston from New York, a 1,600 mile journey, to monitor the wind in Texas, a booming center for wind power.

For those with skills in hot demand, the United States looks more like a land of opportunity again, especially if they are prepared to uproot and move for work.

But such people are more the exception than the rule. For most Americans, the country’s famously mobile labor market, long seen as a driver of its economy, is steadily becoming more static, according to several recent studies.

Even if the recovery from recession picks up speed, things may never quite be the same again.

“In the early 1990s about 3 percent of Americans moved between states each year. Today that rate has fallen in half,” Greg Kaplan, an economist at the University of Pennsylvania, and Sam Schulhofer-Wohl, an economist at the Federal Reserve Bank of Minneapolis, wrote in a recent study.

During the 2007-09 recession, companies slashed hiring and housing prices plunged. That combination deterred the few workers still sought by employers from selling their homes at a loss and moving on, compounding a downward trend in labor market mobility that began 20 years ago.

The effect the housing price bust had on discouraging people from moving to find work has added an estimated 0.2-0.5 percentage point to the unemployment rate, according to a recent study by economist Plamen Nenov at the Massachusetts Institute of Technology.

One person who feels trapped by her devalued home is Nalini Indorf Kaplan, who worked as a chaplain in a hospital, among other part-time jobs, in Raleigh, North Carolina. She had to return to her previous residence in Boulder, Colorado, because she was unable to sell her property there.

“I loved my job. I would have stayed in North Carolina, except I could not sell my house. I did not get a single offer. It was a really bad year,” Kaplan said, adding she was hopeful about signs of improvement in the economy. “It is better now.”

AMERICANS MOVING, BUT NOT MUCH

Companies are hiring and in many states, housing prices are showing tentative signs of recovery.

“People are now starting to feel more confident and have a little bit more flexibility,” said Joanie Ruge, chief employment analyst for the U.S. arm of staffing group Randstad.

She noted that companies were more likely than in recent years to sweeten job offers with relocation packages for skilled workers, especially in states with booming energy or technology sectors, such as Texas and California.

Some moving companies have seen a pick-up in business. United Van Lines said in May that revenue from moving residential households has grown by low single-digit percentages over the last two years.

However, overall household moves have not reached the pre-recession level.

That may be because for most Americans, the labor market is becoming less mobile, with fewer companies making offers that are worth a move and fewer workers accepting them.

“We should not really expect a big pick-up in job mobility because this has been the long-term downward trend,” said Aysegul Sahin, an economist at the Federal Reserve Bank of New York.

After peaking at 3.3 percent in 1990, the annual gross migration rate, which measures all Americans moving to a different state for work or other reasons, fell to below 1.4 percent in 2010.

The rate, based on calculations from official Census data by Kaplan and Schulhofer-Wohl, edged up to 1.5 percent in 2011.

A similar trend exists among people who moved specifically for job-related reasons. The Minneapolis Fed study, which has not yet been published, found this rate fell by nearly half, to 0.7 percent in 2010 from 1.3 percent in 2000, before rising to 0.9 percent in 2011.

LABOR RELATIVELY FLEXIBLE

Despite the sharp reduction in mobility, economists say the U.S. labor market remains very flexible by international standards because Americans still change jobs frequently, even if they stay in the same locations.

Only 25 percent of U.S. workers remain with the same employer for more than 10 years. That contrasts sharply with some European countries, including Greece, Italy, France and Sweden, where the number is closer to 50 percent, according to the New York Fed’s Sahin.

Changing jobs usually adds to productivity levels, helping an economy grow, she says.

“When people move from one job to another and from one location to another they typically find better matches, receive higher pay and boost job productivity,” said Sahin.

Some economists worry that slower geographical mobility could be an early sign of the labor market becoming more static and more similar to Europe, where many countries are struggling with slower growth and higher unemployment than the United States.

The reasons why Americans are staying put are unclear.

Some analysts point to the fact that more households have two incomes than in the past, making a move to further the career of one spouse a potential money-losing proposition for the couple.

Others cite the aging of America, which reflects not only that workers are generally getting older and less likely to move, but also that more people want to stay close to elderly parents or relatives to help care for them.

Another possible reason is technology, such as broadband Internet access, which allows employees to work for companies located elsewhere.

The number of people, such as financial analysts, architects or journalists, who often can work from home, nearly doubled between 2000 and 2009 to 4.1 percent of all workers, according to a 2011 study by researchers from the Federal Reserve.

However, telecommuting on its own is too small to account for the decrease in migration, they found.

Some economists say the link between mobility and economic growth is outdated. It may simply be that jobs in different sectors of the economy are now better distributed across the country.

“Many policymakers have worried that the decline in migration heralds a less-flexible economy,” wrote Kaplan and Schulhofer-Wohl.

“Low migration is good news, because it means either that workers have better information about their opportunities or that workers do not need to move to obtain good jobs.”

(Additional reporting by Lynn Adler; Editing by William Schomberg and Dan Grebler)

However, the abundance of water, in Las Vegas as elsewhere in the United States, is unlikely to last, according to a panel of experts at a forum of National Federation of Municipal Analysts held in the city, famous for its casinos.

Water rates will be slowly but constantly creeping up, and water utilities across the nation are likely to issue more debt to renew and expand their pipelines, analysts agreed.

The Southern Nevada Water Authority, which plans to issue a $360 million bond in July to upgrade old facilities and build new ones, is a good example.

“We already raised tariffs twice, $2 each year in 2010 and 2011 for residential customers,” said William Fox, chief financial officer at the Las Vegas Valley Water District, adding that he does not anticipate further rate hikes until 2014.

Other utilities, which might have not yet done so, will have to follow suit.

“With federal and state assistance limited we believe utility managers will likely ask more of their customers, especially in the form of rate adjustments,” a recent special report on water scarcity by Standard and Poor’s predicted.

In general, well-managed water utilities are expected to tap funds in the coming months. S&P rates 1,270 revenue bonds in the sector and says its sector common rating is A+ with a generally stable outlook.

According to an analyst with MMD, a unit of Thomson Reuters, water utilities have outstanding debt of around $330 billion, nearly 10 percent of the $3.7 trillion municipal bond market. Issues in the sector have been around $11 billion in the first quarter of 2012.

“Despite all the bond issuances of the past two years, we believe the sector still has infrastructure needs to fund in 2012 and beyond,” the S&P report said.

No immediate pressure is seen as managers have shown great ability to control their rates, but long-term worries are starting to emerge, said Geoffrey Buswik, an analyst with S&P attending the forum on Wednesday.

Water shortages could become worse in the coming years.

“The U.S. is not immune to water shortages, and not just in the arid West,” said Betsy Otto, director of Aqueduct, a project studying water issues.

“Parts of the Southeast and even New England have been concerned about meeting water demand during dry periods.”

“This will only continue as populations and local economies put more strain on existing supplies, and as climate change brings more extreme weather patterns with the potential for more severe droughts,” Otto said.

With public tap-water prices ranging from a low of $3.73 per 1,000 gallons in Chicago to a high of $23.42 in Atlanta, the cost of tap water has often been subsidized, another water expert said.

“We priced water at a highly subsidized level, because it was what people wanted and because it was necessary to settle the West in the first instance,” said Grady Gammage of the Morrison Institute for Public Policy. “We still continue to price water at highly subsidized levels”.

As much of this water goes to landscaping, its cost and scarcity are likely to soon become a political issue, Gammage predicted.

(Reporting By Tiziana Barghini; editing by Todd Eastham)

For Simon Johnson, the Bush-era income tax cuts represent a de-facto pay hike that Americans happily accepted in 2001, but at the expense of the country’s fiscal discipline.

” We gave ourselves a big pay rise with the Bush tax cuts and frankly it is not sustainable,” said Johnson, whose new book on the U.S. deficit and debt challenges was published on Tuesday.

“White House Burning” is named after an episode during the war of 1812, when the British attacked the White House and Capitol Hill. The raid underscored the lack of tax revenues the fledging United States needed to defend itself against its enemies, and a lesson in the importance of careful budget management that America heeded for centuries afterwards.

In the book, Johnson and co-author James Kwak tell the story of how that discipline began to fall apart in the 1980s with the low-tax focus of the Reagan administration.

The U.S. public net debt load now stands at an estimated 78 percent of gross domestic product and is set to rise.

Johnson and Kwak pin the debt on both U.S. political parties for failing to understand the importance of keeping the surplus the government had as recently as 2001.

In the near term, getting a grip on U.S. finances depends in large measure on what Washington decides to do with the Bush-era income tax cuts when they expire on December 31, the authors argue.

“There is an interesting and important moment at the end of this year when the Bush cuts expire and there is a real possibility that the president can veto (the extension of) those tax cuts,” Johnson said in the interview.

The sums involved are enormous. A permanent extension of the personal income and estate tax cuts would increase the U.S. public deficit, currently estimated by the IMF at nearly 8 percent of GDP, by nearly another 3 percent of gross domestic product by 2021, the book says.

If the Bush cuts expire and Obama is re-elected, he could propose his own tax cuts, such as a payroll tax cut that could be phased out depending on the health of the labor market, Johnson said. “It would be very hard for the Republicans to resist voting for it,” he said.

In the likely event that Washington cannot resist the temptation to make the Bush tax cuts permanent, Congress should act sooner rather than later to show its intent to start narrowing the deficit by agreeing to some limited though probably painful measures.

The book’s suggested fixes include increasing the payroll tax for social security by one percentage point, reducing the tax exemption on health care insurance for employees, taxing excessive risk-taking by financial institutions and reducing the mortgage interest deduction, among others. A minimum level of tax increases would help balance the budget without losing social plans, like Medicare, Medicaid and pensions, it says.

Those measures would be enough to narrow the deficit and push the debt back toward a more comfortable level of 50 percent of GDP by 2030, Johnson and Kwak estimate.

“This book is not endorsing big government,” says Johnson. His studies at the IMF showed the amount of U.S. tax revenue as a percentage of GDP has been at its lowest since the World War Two.

At the same time, he says any government needs to provide citizens with much-needed social programs such as health insurance for the elderly.

Therefore, Johnson and Kwak argue, now is the time to act before an aging U.S. population makes things even harder.

The threat posed by the U.S. debt is far from immediate, they write. With foreign and domestic investors hungry for Treasury bonds, denominated in what remains the world’s major reserve currency, the United States can cope with the existing deficit and debt levels, plus a new major financial crisis or even a war almost without losing stride.

“But we should not assume that we will have that capacity forever,” Johnson said, noting how things can easily turn ugly, as the European debt crisis has shown.

In the long term, either voters will accept sacrifices to ensure that the U.S. debt is brought down to a sustainable level, or bond investors will do it, though probably in a more brutal way, just as they are doing to Greece and Ireland.

“One way is much better that the other,” the book says.

Johnson says it is time to restore the fiscal discipline that the Founding Fathers learned the hard way. He believes Americans will make the right call.

“As Winston Churchill said: ‘Americans always do the right thing after first exhausting all the other possibilities.’”

(Reporting By Tiziana Barghini; Editing by Dan Grebler)

The jobless rate may fall faster than expected to less than 5 percent in five years’ time, the economists said in the first in a series of posts but that seems likely to be due more to the fact that fewer people will be in the labor market than to future job creation.

The post notes how, between 2008 and 2012, the employment to-population ratio had a different pattern than in previous economic cycles, with the unemployment rate falling “because the participation rates declined substantially”. Given the U.S. aging population, with 10,000 baby boomers turning 65 each day, this rate is likely to decline even more. The argument has interesting implications, including a potential decline in the usefulness of the jobless rate as a gauge of well-being.

If the employment-to-population ratio continues to be sluggish as the unemployment rate declines (suggesting that flows to nonparticipation are important in driving the unemployment rate decline), then the unemployment rate will emerge as an increasingly less reliable measure of the health of the labor market.

If so, what will Fed officials look at when defining its future policies?

(Reuters) – Susanna Mancini cherishes a photo of herself at 27: a smiling face behind a pair of dark sunglasses. On it, she scrawled to her future husband: “Too bad you can’t see my eyes. I am so proud of my tough yuppie stare!”

Her professional pride propelled her early career as a lawyer. She was successful and well paid for it. She kept working when her first child was born and was promoted to a more senior position in Citibank after her second child arrived.

But her career eventually succumbed to something Mancini never expected would end her rise at the bank – her husband’s even bigger success. She quit in 2005 when her six-digit income was overtaken by his seven-digit one.

“At that point, it was clear that my wage had become family pocket money. There was a real opportunity to do other things that did not require being chained to a desk,” said Mancini, now 50.

She is far from alone, according to a new study from the Federal Reserve, due to be published shortly.

It shows that between 1993 and 2006, there was a decline in the workforce of 0.1 percent a year on average in the number of college-educated women, with similarly educated spouses.

That contrasts with growth of 2.4 percent a year between 1976 and 1992.

The result: the labor force in 2008 had 1.64 million fewer such women than if the growth rate had kept up its earlier trend, slightly more than 1 percent of the total workforce in that year.

SKILLED EXODUS MAY HURT GROWTH

Stefania Albanesi, a senior economist at the Federal Reserve Bank of New York and one of the study’s authors, said the loss may hurt economic growth at a time when the nation can ill afford to have highly skilled workers on the sidelines.

While the overall jobless rate remains high, the United States faces skill shortages in some areas and the unemployment rate for college graduates is just above 4 percent.

Albanesi links the decline in the number of well-educated, married women entering the labor force to a sharp rise in salaries for top earners in the United States, and in particular, for men.

In 1975, college graduates of both sexes were making 43 percent more than non-college graduates. By 2008, the figure had risen to 92 percent for men and to 70 percent for women.

“In the last 20 years, wages for highly educated males increased so much that they dwarfed the family’s second income, usually the one of their wives,” said Albanesi, who co-authored the study with Columbia University graduate student Maria Prados.

“The result was that sometimes married women exited the labor force mid-career, exactly around the time their husbands are promoted to more senior roles. They stopped getting income they didn’t need and so they left the labor force forever.”

In a previous study, Albanesi estimated that the rise of all women participating in the labor market boosted gross domestic product by 42% percent between 1920 and 1990.

Once the 2007-2009 recession hit, the female retreat from the workforce halted for a couple of years: Women and men alike returned to the workforce when their spouses lost jobs or when their incomes fell, and also to make up for a loss in the value of housing and stocks.

But as the economy stabilized in the past two years, there have been signs that the retreat has resumed, Albanesi said. Of all working-age women, 58.6 percent were either working or looking for a job in 2010, down from 59.2 percent in 2009. The Bureau of Labor Statistics expected the rate to fall further by 2020.

According to Albanesi, it’s not the tug of looking after young children that makes most educated women give up their career.

“These women usually give up their jobs when their children are school-age and not babies any more,” Albanesi said.

Studies by the University of Chicago Booth School of Business and Harvard support that view.

Albanesi plans further research to quantify how much the decline in educated women in the workforce is affecting the potential growth rate of the economy.

NOT JUST FOR A FEW

Only a few households can afford to give up a good second income.

But the trend is not limited to top earners. It has been detected among households earning around $80,000 per year.

Julie Divita worked 18 months as an entry-level marketing assistant for a company that makes Hawaiian shirts before leaving to have a child.

“I was planning to go back to work, but ironically, on the first day of my maternity leave, my husband got a raise that was the equivalent to my salary. This was 25 years ago, and I have been a ‘stay at home’ ever since,” Divita said.

She is married to a partner in a property development firm in the San Francisco Bay Area and spends much of her time fund-raising for local schools as a volunteer.

Some of the rarer stay-at-home husbands have similar stories.

“He was laid off three years ago. He has been looking for a job, but he’s probably not been so motivated about seeking one,” said a woman with a senior position on Wall Street, who spoke on condition of anonymity.

She said the quality of life for her family, including their daughters, ages 14 and 12, has greatly improved, though explaining why the male is not the breadwinner can still be socially awkward.

“Stay-at-home wives are a status symbol for men. The opposite is not true.”

(Reporting By Tiziana Barghini; Editing by William Schomberg and; Jan Paschal)

“I do not know how this is going to end. We have been working hard for a year to get reauthorized because the Eximbank is a no-cost jobs bill,” Eximbank President Fred Hochberg told Reuters. “This should have been done in September.”

The Eximbank provides financing to help big U.S. exporters like Boeing and many smaller companies make sales considered too risky by private banks. Its charter is generally renewed for four or five years at a time, but the bank has been operating on temporary authority since October.

The Republican group Club for Growth has branded the bank as “corporate welfare,” and urged lawmakers to allow the bank to expire when its extension ends on May 31.

Hochberg rejected that charge, saying the bank operates “at no cost to the taxpayers” since it collects fees on its loans that cover all of the bank’s expenses. The bank has made a $1.9 billion profit over the last five years.

President Barack Obama’s administration has also asked Congress to raise the bank’s credit exposure cap to $140 billion, from $100 billion currently. A bill stalled in Congress would hike it to $135 billion.

Asked if Republicans were offering the most resistance to reauthorizing the bank’s charter, Hochberg said: “Yes, that would be without question.”

“I think there are members of Congress who are concerned about any debt level,” Hochberg added, when asked if the administration’s request to increase the exposure cap was a major reason for the legislative delay.

Unless Congress acts soon, the bank could hit its lending limit in six or so weeks, forcing it to stop making loans and putting future exports at risk, Hochberg said.

Exporters have some $30 billion to $40 billion worth of deals that need financing, but the bank has only about $10 billion worth of lending ability left before it hits its ceiling.

“We’re sitting here wringing our hands should (the credit cap) be $100 billion, $140 billion, $135 billion, and the competition is licking their chops, saying ‘Boy, this is really great. We can scoop in and get a lot of sales that American companies don’t have the financing for’,” Hochberg said.

He estimated the bank supported 290,000 U.S. jobs in the last fiscal year, and warned “those are at jeopardy if you do not have financing.”

Congressional inaction also would make it harder for the United States to meet Obama’s goal of doubling exports by the end of 2014, Hochberg said.

Republican aides in both the House of Representatives and Senate have said they expect the bank to be reauthorized, despite concerns raised by some party members.

Hochberg, whose job takes him all over the world to help promote and finance U.S. exports, said the continued delay worried him because many foreign government are boosting their export-finance operations.

“I lose sleep about getting reauthorized (and) I lose sleep about countries like Brazil and China that are making a very unlevel playing field,” he said.

(Additional reporting By Dan Bases; Editing by Philip Barbara)