links for 2009-07-25
Glenn Rudebusch vs. John Taylor on the Right Value for the Interest Rate

Education and Equal Opportunity

He writes, in the FT:

The mobile society stalls at the gates of academe: Making it has been the American dream for two centuries. Horatio Alger, who died 110 years ago this month, wrote dozens of hugely popular novels (Struggling Upward, Strive and Succeed) that imprinted the aspiration on millions of minds. In their pages boys would rise from poverty to the middle class, often through the kindly intercession of older men but always with a display of grit. The theme spanned the 19th-century Atlantic: Samuel Smiles (1812-1904) promoted the theme of social advancement through individual striving in Self Help (1859) and other works. The career of his fellow Scot Andrew Carnegie, moving from real childhood rags to world-beating riches in early middle age, gave foundation to such exhortations.

But where the myth had reality, it now has less. Recent studies show that the US is near the top, and the UK in the upper levels, of the league of developed states in which the poor do not or cannot help themselves to rise. One much quoted study notes that “the idea of the US as ‘the land of opportunity’ persists; and clearly seems misplaced”.

Why? Education is at the root. In the land of opportunity, the immigrants of the 19th and early 20th century could rise – or at least their families could – with the burgeoning industrial economy. In 1914, Ford’s workers were three-quarters foreign-born, and their jobs did become as solid and middle-class as Alger imagined – if more through militant unions than kindly benefactors. Now, the good jobs need at least one college degree: a PhD is no longer synonymous with genteel scholarly shabbiness but can be leveraged into great wealth, personal and corporate.

George Borjas, the economist, reckons that where children of immigrant parents had, for much of the last century, easily surpassed the earnings of their fathers and mothers, they now more often stick at the same level. Because US immigrants are disproportionately little-educated Mexicans, and because they tend to stay in Hispanic enclaves, their ability and willingness to mount the academic ladder is limited. The lesson travels: acculturation to norms of ambition, improvement through education and willingness to integrate into the broader society (which means a loss of distinct identity) are good ideas for social mobility in all societies. Insofar as some communities – including indigenous working-class communities – wish to emphasise their difference, their place on the lower rungs of class society will remain.

Thus, curiously, the university becomes an ambiguous social factor. The more education it confers, the better the possibility for advancement up through the classes. But it also functions as a filter: the professions, and higher earnings, are now so routinely associated with the degrees it gives that those without its benison find the career and class bonds tighter than ever.... This week’s British Cabinet Office report on access to the professions presents the narrowing of access in stark terms, forecasting a kind of caste society in which professionals are drawn largely from the 30 per cent of the most highly educated (and higher social classes) of the population. This is true of all professions in wealthy countries – even as they have recruited more women, as the gender pay gap has fallen and as minority groups have seen their representation in the professions rise....

[I]ndividual and family mobility – another irony – seems better served in states with a strong social democratic tradition. In the Scandinavian countries, Denmark in particular, movement up (and down) is better lubricated. One cannot have everything. The international tables of top universities are dominated by the US and the UK, which cater for global as well as their own elites. Hard-driving and expensive private schools are embedded in the Anglo-American social fabrics; the Cabinet Office report shows that some professions – such as the judiciary and journalism – are at the higher levels dominated by their products. When this writer began in a provincial newsroom, he was one of two graduates; the route to national glory could still be trod by a school leaver with shorthand and sharp elbows. Now, it would be far more difficult....

[P]arents who push for entry to better schools, or better schooling in the one they get, are the real motor forces of a dynamic society. The antidote to social ossification would thus seem to be a new kind of class struggle, a storming of the frozen winter palaces that tutor and employ our increasingly entrenched elites.

[1] "Intergenerational mobility in Europe and North America": Blanden, Gregg and Machin (LSE, 2005)

Three preliminary points:

  • First, although the myth of upward relative mobility through luck and pluck did have some reality, it never had much.

  • Second, very few Ph.D.'s can be "leveraged into great wealth, personal and corporate"--engineering and biotech and finance only, and not all of engineering and biotech and finance. For the overwhelming majority, Ph.D.s are still "synonymous with genteel scholarly shabbiness": don't get a Ph.D. if you aren't driven to spend your life telling people what you know and trying to learn more--it will be ta mistake.

  • Third, Borjas's findings about income across the generations are mostly due to the stagnation society-wide of all incomes in America save those of the very top of the income distribution; I have seen no evidence that little-educated Mexican-Americans are following any different a path from the one that little-educated Slovak-Americans or Polish-Americans or Greek-Americans or Italian-Americans or Chinese-Americans of a century ago--and the incomes of little-educated Mexican-Americans today are definitely converging to the English-speaking norm much faster than did the incomes of little-educated ex-slave African-Americans of a century and a half ago.

And two main points:

  • First, the more unequal a society is in an "inequality of result" sense, the more important is equality of opportunity--the greater is the injustice done by the deprivation of equality of opportunity--and the harder it is to attain equality of opportunity as parents of greater relative wealth and status have more social power to deploy to gain an edge for their children. It is no mystery, no surprise, and no irony at all that intergenerational social mobility is greater in countries with a strong social-democratic tradition.

  • Second, it is very difficult to have a great deal of power in this society if you are not exquisitely well-prepared to compete when you are 25--which requires that you have or be able to rapidly acquire patrons and that you went to and took advantage of a good college or did something else functionally equivalent, which requires that you applied yourself in high school, which is very hard to do unless you got a solid foundation in terms of basic skills and study habits in elementary school. This means that (i) people who are scared off from going to college because of the debt it incurs have a very small shot at large amounts of upward mobility, and (ii) the decisions people make when they are seven about how to spend their time shape their lives for the next seventy years. In even a half-good society, one should not be able--it should not be the rule--that one can greatly narrow the possibilities for one's life by what one does or fails to do at seven.

I am still not sure whether my beliefs that in a good society higher education--indeed, all education--is free to the students and that elementary-school teaching is a very high-status profession reflect my own biases produced by my own position within this society or whether my beliefs are a rational assessment of reality, but it is worth thinking about...