Arnold Kling  

Mike Munger on Microfinance

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A podcast with Russ Roberts, recommended.

I am still trying to unpack the model Munger alludes to at the end, in which it does not pay women to become educated in countries where there is little physical capital. I am guessing that human capital and physical capital are complements in this model, so that if there is little physical capital, you do not want to invest in human capital. But why do men become educated in this model? Or do they?


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Tim Worstall writes:

A place with little physical capital is a place which is relying largely upon human grunt work to make things happen. That's what little physical capital means: no machines, yes?

And women will always be at an economic disadvantage where the major earning asset is human musculature.

Thus education, investment to increase earning power, only makes sense when it actually does increase earning power. When machines are doing the heavy lifting and men and women can compete without the male musculature being the determining factor.

Mike Munger writes:

Not surprisingly, Tim said it better than I could have. Without physical capital, and in face of cultural restrictions on women working outside the home, education for women is a luxury good.

In such a setting, the impact of limited education on marginal product of labor is improved, by more, for large strong people.

Further, there are cultural norms against employing women in many jobs. So even those jobs they could do are closed off to them.

My claim is that increased savings is the surest path to (more) equality for women. The problem is that this ruptures the societal hierarchy, and the patriarchy may strike back with violence. I'm not defending that last claim as a good thing, only arguing that males are perfectly satisfied to preserve an economically inefficient system just because those males value positional goods at the top of the hierarchy.

Emerson White writes:

It takes considerable capital for a male to replace a female in child rearing positions, and a certain amount of outside of the house labor has to be interrupted in order for a child to be born and have a decent shot of living(at least 2 weeks, several months if heavy labor is involved) as a result of this educated daughters aren't monetarily worth as much as educated sons. Additionally sons in many cultures are relied on to take care of their parents while daughters are taking care of their step parents.

Ben writes:

Professor Munger,

Do you know of any studies that look at the effects of low physical capital levels on women's investment in human capital? Maybe there aren't good data for human and physical capital in developing countries?

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