Arnold Kling  

Goldin and Katz

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I have ordered their new book, after seeing it mentioned in David Leonhardt's column in the New York Times. An excerpt from the book is here.


For cohorts born from the 1870s to about 1950, every decade was accompanied by an increase of about 0.8 years of education. During that 80-year period the vast majority of parents had children whose educational attainment greatly exceeded theirs. Educational change between the generations then came to an abrupt standstill.

As a result, we went from a pattern in which inequality was falling as the average standard of living was rising to a pattern of increasing inequality.

Two questions arise. First, why has education attainment stagnated? Second, why has average productivity growth remained high in the face of this stagnation?

My answer would be assortative marriage. We are dividing into a two-tier society, where the top tier produces children capable of obtaining advanced skills and the bottom tier does not. I will be curious to see how Goldin and Katz answer those questions.

A related puzzle is why some young people choose to forego graduating high school and attending college, given the high average returns from more schooling. Some hypotheses:

1. They are making rational decisions, in that for them, the marginal returns from additional schooling are low.

2. They are making irrational decisions, due to myopia or other factors.

3. They are making poor decisions because they are cash-constrained.

(3) is politically correct, but my guess is that (1) is more relevant empirically. Again, it will be interesting to see what Goldin and Katz have to say that bears on this.



COMMENTS (14 to date)
spencer writes:

The problems that we see with education are not the real issue. They are only the symptom.

the true underlying problem is the destruction of the traditional family.

Associated with this is that women's lib was really just a scheme to exploit the last source of cheap, high quality labor.

But the true cost of women's lib is being paid by the children.

Stefano writes:

0.8 years of education more every year x 80 years = 64 years of education

Somehow that doesn't feel right.

Stefano writes:

oops, it's 0.8 / DECADE...

Tom West writes:

But the true cost of women's lib is being paid by the children.

yep, for the children's sake, it's time to get the men into the kitchen.

Tom West writes:

Back to the topic at hand...

At some point, the return to education is limited the individual's abilities. I hit my cognitive limits sometime in university (I don't think I'll every truly understand tensors). More education in that field would not have been of much benefit or made me more productive.

Perhaps by the 1950's, we'd more or less max'd out the (average) return on further education. Further increases in years since might be the result of obtaining credentials rather than increased amounts of learning.

Floccina writes:

Many other things happened at the time, I do not believe schooling was causal. In fact it could be that the rise in average wealth led to more years of school.

Also education is a broad term, I prefer the word schooling, it might be that PBS is most educating thing our Government has ever done. Also diminishing returns change the calculation in many ways.

Mutt C writes:

"We are dividing into a two-tier society, where the top tier produces children capable of obtaining advanced skills and the bottom tier does not."

Exactly. This is going to be a major issue over the next few decades. It's very sad. I wish we had better options for people who are not that bright or who just don't want to spend sixteen years of their life doing schoolwork.

BGC writes:

"where the top tier produces children"

Errr, actually not. The top tier have more-or-less stopped having children.

The few kids that the top tier _do_ have sure are smart, but there are probably less that 1 child per couple on average (given that around a third of women college graduates don't have any children - at least in the UK and Europe). If you were focusing strictly on the top tier, the fertility rate would be very low indeed.

This is because IQ and fertility are very strongly negatively correlated, fertility and religiousness are positively correlated, fertility and conservativism are positively correlated.

All of which means that the top tier (mostly high IQ, irreligious, and left wing) must continually be recruiting from lower tiers in order to replace its personnel.

I'm particularly curious to see how they address the question of how immigration has contributed to growth in human capital within the U.S.

Given the liberalization of the rest of the world, should we expect to be the beneficiary of human capital transfers over the next 100 years?

Dan Weber writes:
The few kids that the top tier _do_ have sure are smart, but there are probably less that 1 child per couple on average (given that around a third of women college graduates don't have any children - at least in the UK and Europe)
First, I'm a little suspicious about that "a third of women college graduates" statistic. They might not have any children right now, but that doesn't mean that they won't have kids ten years from now.

Second, the high-reproducers among the top-tier will dominate their group. If 90% of the high-tier is having 1 or fewer children, but 10% is having 3 or more, that 10%'ll become a large part of their cohort.

Someone, somewhere, will figure out how to both be top-tier and produce lots of children. Oh, and also how to make those children productive. (Lots of trust-fund babies are completely worthless.) From there it's just a matter of time.

BGC writes:

Dan Weber writes: "First, I'm a little suspicious about that "a third of women college graduates" statistic."

http://www.guardian.co.uk/
world/2006/jan/27/germany.lukeharding

http://www.telegraph.co.uk/news/
uknews/1549297/
Third-of-graduate-women-will-be-childless.html

I've checked the primary data for the UK article, and it is correct.

The inverse correlation between IQ and fertility seems to be pretty well established :

http://www.eugenics.net/papers/e...s/ evidence.html

"Second, the high-reproducers among the top-tier will dominate their group. If 90% of the high-tier is having 1 or fewer children, but 10% is having 3 or more, that 10%'ll become a large part of their cohort."

Yes indeed - over several generations (?50 plus years) this will happen - but I don't think that's what AK meant.

"Someone, somewhere, will figure out how to both be top-tier and produce lots of children."

The US Mormons have already figured this out - they have a fertility rate of above replacement levels, and the wealthiest Mormons have the largest families.

rvturnage writes:

"(3) is politically correct, but my guess is that (1) is more relevant empirically. Again, it will be interesting to see what Goldin and Katz have to say that bears on this."

Given the readily available and abundant Federal grants and guaranteed loans, I see (3) as being relevant only as an excuse put forth by those in the (2) category.

Gary Rogers writes:

My gut feeling is that education is overrated in this discussion. Although there is a correlation between success and education, this does not mean that education causes success. More often those who will be successful anyway take the opportunity to get more education. In the case of young people forgoing education it may very well be that number 1 is the correct answer.

Lord writes:

This also represents a change in educational operation, from universal primary and secondary schooling to specialized post-secondary schooling which is assumed to be useful for only the upper half or less of the population. If you assume this, we are already over educating the available population. So is this a matter of circumstance or expectation? Are we making this division true because it is what we believe? What is the division like in countries that provide free post-secondary schooling?

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