The latest Economics Nobel Prize and Me
I co-authored an article against one of her most-cited books
I am going to comment on the choice of Claudia Goldin as the latest winner of the Nobel Prize in economics.
I am making an exception to my usual policy, which is to schedule posts in advance. I do not like to jump onto The Current Thing, for at least a few of reasons.
I only want to write on topics where I have a useful perspective. You can get more attention talking about The Current Thing, but I do not wish to be motivated by a craving for attention. I want to be motivated by writing things that people will remember and appreciate long after they were written.
Second, I want more time to collect my thoughts. Reacting right away to something maximizes the chances that you will be giving a System One response (emotional, instinctive) rather than a System Two response (careful, thought-out).
I write more clearly if I put more calendar time into posting. It is common for me to revise my posts a number of times between the day they are composed and the day that they are posted.
But this week, I am canceling my scheduled posts. I have three takes on Israel-Gaza that I will write later this week. One is on the Three Languages of Politics perspective (should be obvious to those of you familiar with the model). A second is on Gaza itself, because I spent a couple of weeks there in 1980, and the extreme poverty there made a strong impression on me. A third is on analogies with World War II. If Americans could be counted on to have some rudimentary knowledge of history, then they would appreciate that Pearl Harbor is a better analogy than 9/11. And there are several other important WWII lessons for the current conflict as well.
Today, I will react to the Nobel Prize for Goldin.
When I read her much-cited book (co-authored with Lawrence Katz), The Race Between Education and Technology, I wrote a blog post objecting to the empirical work.
Goldin and Katz point out, in the “race” between the growth of skill-biased technology and the growth of education in the work force, the latter has slowed down. They argue, convincingly, that this slowdown has caused skill premiums to rise, resulting in more income inequality.
What went wrong?
Well, for one thing, it is arithmetically impossible for the graduation rate to rise 28.8 percentage points from a level of 79.3 percent. On p. 325, Goldin and Katz write, “An upper bound exists for a graduate rate; it cannot exceed one.”
So why did they write their book? Mostly, it is a swindle. Instead of focusing attention, as I just did, on the high-school graduation rate, they emphasize an estimate of average total number of years of schooling, which they call “educational attainment.”
Read the whole post.
Daniel Klein, the editor of EconJournalWatch, saw the post and invited me to expand it into an article for his journal. It is a serious journal, which he takes pride in editing carefully, including having peer reviews. At one point during the editorial process, I became frustrated with the additional material that reviewers wanted in the article, and that is when Klein brought in Merrifield as a co-author.
The article is here. It includes some additional important criticisms. Klein, as is his custom, invited Goldin and Katz to respond. Often, he does get responses. But not Goldin and Katz. Nor did they ever contact me about the article.
What I took away from their failure to respond was that they knew that neither Merrifield, Kling, or EconJournalWatch had high status within the profession. We could be safely ignored. They did not care about the substantive intellectual issues in their work. They just wanted to enjoy its high status.
Honestly, I do not know Goldin and did not know Katz, so I don’t know whether my interpretation of their decision not to respond is correct.
But she is not someone I was rooting for to get a Nobel.
Without education as the one weird trick that can solve all our problems, what can solve all our problems?
That's always what one is bumping up against when they take on education. People are implicitly expecting you have an answer to accomplish what education promises to accomplish, even if it fails to do so.
People don't want to accept that they have eternal problems with no easy or infinitely replicable solutions, and many proposed "solutions" outside of education could be worse.
That big shift of benefits towards more education that occurred about half a century ago was based more on the failures of organized labor in all sectors that weren't monopolies with no competition. The unions became so greedy they ultimately lost share in competitive markets. The biggest increase was in monopoly government institutions, but government service started requiring college degrees for even the dumb bureaucratic paperwork positions.
I did an engineering economic analysis back around 1960 where I looked at the economic return of education in engineering relative to my HS associates whom had contacts (relatives, etc.) to join the high end unions like boilermakers, plumbers, electricians, longshoremen, etc. I was into fast cars of the 1950's so I knew a lot young men in these areas and they were rich relative to me as a student at the time. Making the assumption that they saved the difference in income between my low level TA and summer income and their union pay and using long term data on engineering income with age I came to the conclusion that a BS degree, at the time, would be about break even by retirement and a MS would be a money looser with a Ph.D. being economic insanity.
Being a bit insane, I went for the Ph.D. and then had a boilermaker working for me on acid rain pollution control experiments (note the lack of discussion about acid rain -- it was solved). His weekly pay check was much larger than my bi-monthly check and he used to joke about it. He was a good guy and never complained to the union when I picked up a wrench and fixed something instead of following the union rules.
In the real world, my associates spent the extra money on fast cars and fast women and didn't save a dime. Meanwhile the job markets for many of these fat unions flattened out and shrank as nuclear power was killed, infrastructure of all kinds had time schedules dictated by environmental activist, most of whom had non-STEM educations and were effective parasites contributing little to the future of humanity.
We also had unions like the UAW with total auto market control with the help of the big three producing the cars of the 70's which didn't last as long as cars from the 60's. (make a car last half as long, you sell more new cars) Then the Japanese entered with quality cars but were forced by the political class to build plants in the US, but that undercut the UAW and their wage premiums.
The shift of unionization monopoly rents from the actual working class to the formally educated ruling bureaucratic class would be a big factor. This "educated" class of bureaucrats isn't nearly as capable of 3-D visualization as any plummer or pipe-fitter.