3 Factors of Economic Mobility

Sociologist W. Bradford Wilcox of the University of Virginia has an excellent piece in The Atlantic, which analyzes data from the Equality of Opportunity Project on what factors contribute to economic mobility. Wilcox finds three main factors: (1) Per-capita income growth, (2) Prevalence of single mothers (negative), (3) Per-capita local government spending (likely a proxy for education spending or public transportation).

 

 

Wilcox concludes,

As the nation marks the 50th anniversary of the War on Poverty this week, it’s worth considering that our attention to income inequality, although well-meaning, is distracting us from the most important pieces in the poverty puzzle. Growth, marriages, and local governments are three issues deserving more attention in our efforts to renew the American Dream for the nation’s poorest citizens.

The Problem with Free Stuff (College Tuition Edition)

Jordan Weissmann, writing for The Atlantic, thinks he has calculated the total cost of free tuition in the United States at public universities. The headline? “Here’s Exactly How Much the Government Would Have to Spend to Make Public College Tuition-Free.”[ref]emphasis added[/ref] It’s adorable, really.

First Weissmann gets the total amount spent on all public university tuition ($60b). Then he subtracts the government aid that currently goes to public schools (about $20b). Next, he carefully considers the impact that free education would have on the folks who go to private universities, and estimates how many of them would move to public school (no, I’m kidding, he totally ignores that.) Additionally, he considers all the folks who currently don’t go to college at all because the price and/or financial aid process is intimidating and generates an estimate for new entrants into college (ha, yeah, no: that’s not actually in there.) Then, he considers the indirect costs of overcrowding, the capital outlays that public universities would have to spend on new classrooms, housing, and facilities, and the costs of hiring and training all the new faculty and staff to handle the influx (yeah, that’s not mentioned in the article at all.) Finally, he considers related, complex issues like the future of the profit-machine that is college athletics and how it would interact with this new regime (by now you know very well that he did absolutely no such thing.)

Instead, he compares his make-believe $40b number[ref]it’s in the second update, not the original article[/ref] to this pretty chart.

2014-01-07 Tution

Which tells us… nothing, really.[ref]Not gonna lie, I included the chart for the same reason he did. It’s pretty. Look at that color palette! Gorgeous![/ref]

On the one hand, I can’t blame Weissmann for not doing all that extra work. I spent about 20 minutes trying to get numbers, and it was not fun. But the problem with taking the easy way out is that (in this case at least) you end up with a phony estimate of an irrelevant number. If we think that free public education for K-12 is a good idea, then it’s entirely plausible that free public education for K-16 is a good idea. My point is not that Weissmann’s final conclusion is wrong. Rather, it’s that (1) lazy analysis is counter-productive and (2) pretending that markets don’t exist is silly. If you’re not talking about the way people will respond to major changes in prices, you’re not having a serious conversation of any kind.

Will Gay Marriage Ever Be Settled? Lessons from Duck Dynasty

The American Left has been instrumental in past decades at advancing the cause of equality, but their track record has been mixed. On the one hand, no one questions the morality of the Civil Rights campaign to end segregation and Jim Crow. In the 21st century racial debates tend to be about the nature of equality, but everyone in the mainstream of American life takes for granted that racial equality and integration is a good thing. The very unanimity with which interracial marriage is now accepted (just as one example) demonstrates, to my mind, the rightness of the cause. I would not say that popularity is a perfect metric of morality by any means, but I do think that acceptance of progress over a long time period is relevant to assessing the validity of that progress.

2014-01-07 Interracial Marriage Poll

On the other hand, 40+ years after Roe v. Wade the American Left continues to try and frame the issue of abortion in terms of women’s equality and Americans–women included–continue refuse to buy it.

2014-01-07 Abortion Poll

The contrast is, to me, stark and informative. On some social issues there is initial resistance followed by unanimous consent. On others, however, there is no sign of progress whatsoever. In fact, many indications are that the pro-life side is slowly gaining ground.[ref]Secular Pro Life has an entry today about just this topic.[/ref] Since the policy opinion is not shifting substantially, this reflects a growing awareness on the part of American citizens of just how radical and extreme our laws are. Americans are moderate on abortion, Roe v. Wade isn’t.

So the big question is: which category does gay marriage fall into?

The American Left naturally relates gay marriage to issues like interracial marriage and assumes we’ll see a chart like the one above: in 40 years time the idea of opposing same sex marriage will seem as backwards and forgotten as the idea of opposing interracial marriage. That explains the initial reaction to Phil Robertson’s comments about homosexuality: he was roundly denounced as a bigot and A&E immediately booted him from his own show (Duck Dynasty, which is the #1 non-scripted cable show of all time). Writing for the Daily Beast, Keli Goff correctly detected that this was an example of dangerous overreach:

Though nearly half of the country opposes same-sex marriage, the media narrative has become dominated by the storyline that only a small segment of backward bigots who hate gay people oppose same-sex marriage. That simply isn’t true.

Goff also points out that Robertson’s actual comments had been mischaracterized:

Despite the fact that in the next quote Robertson also quotes scripture to denounce those who commit adultery, drink too much, and slander others as sinners, he was roundly denounced as a bigot and hate monger, particularly in progressive and liberal leaning news outlets.

Just to add to that, Robertson did not equate homosexuality with bestiality. He listed homosexuality as a form of sexual deviance along with bestiality and adultery. As a confessed adulterer (before he was born again), Robertson was not calling gays sinners in any sense that didn’t include his own life as well. It’s a rare bigot who operates by painting himself and his targets with the same brush.[ref]There are some polished videos about Phil Robertson, but I like this fairly raw sermon more. Watch ’em, if you want to get a feel for what the man actually believes.[/ref]

Goff even calls out media bias in the language used to cover the controversy:

Reinforcing bias in reporting on this story is the fact that many outlets caved to pressure to use the term “marriage equality” in coverage, when such a term is an activist creation. Interracial marriage is called interracial marriage, not “marriage equality.” If supporters of same-sex marriage view the civil rights fights as comparable, the same language standard should be applied.

It’s obvious that the reaction to Roberton’s comments was overreach, because within days A&E had to repudiate their own position and allow him back on the show. They weren’t the only ones to misjudge public opinion on this one, either. Outlets like restaurant chain Cracker Barrel yanked Duck Dynasty merchandise, and then faced angry customer backlash. They also caved.

Now, maybe the only thing that happened is that A&E, Cracker Barrel, and others misjudged the timing of America’s acceptance of gay marriage. Maybe we’re on that upward slope of acceptance (like for interracial marriage) and in 5 or 10 years comments like Robertson’s wouldn’t generate any widespread support. But I doubt it. I doubt it because what seems to be happening is a growing awareness among many, and not just social conservatives, that there is a real and important difference between bigoted homophobia and opposition to gay marriage. Goff writes:

Among my family members who oppose same-sex marriage, I have been told to congratulate my gay friends whose weddings I have attended. But I have simultaneously been told that such unions don’t fit my relatives’ biblical definition of marriage. I have further been told that in the context of the oft repeated phrase “love the sinner, hate the sin,” they see gay people no differently than they would view a straight person like me who decides to live with someone “in sin” (as the biblical saying goes). It wouldn’t make me a bad person but one who according to biblical text would be “living in sin.” In other words, they wouldn’t throw holy water on me but also wouldn’t throw me a parade. Most of all, they wouldn’t really care how I live my romantic life at all, as long as I was happy.

There’s a big gulf between the relatives I describe and someone who “hates” gay people.

Brandon Ambrosino made pretty much the same point for The Atlantic. Ambrosino, who is gay, criticizes the argument that “if you are against marriage equality you are anti-gay.” He writes:

If it’s “anti-gay” to question the arguments of marriage-equality advocates, and if the word “homophobic” is exhausted on me or on polite dissenters, then what should we call someone who beats up gay people, or prefers not to hire them? Disagreement is not the same thing as discrimination. Our language ought to reflect that distinction.

Ambrosino then concludes: “I would argue that an essential feature of the term “homophobia” must include personal animus or malice toward the gay community.” But, as I’ve already said, Robertson seemed to be placing sexual transgressions like homosexuality in the same category as adultery, of which he is guilty and about which he speaks publicly. I do not share Robertson’s born-again take on Christianity, but I understand it enough to grasp his meaning when he talks about sin and sinners and, most importantly, so does his audience. Millions of Americans were unafraid to stand for Robertson (albeit sometimes with rather strange conceptions of the First Amendment) not because they joined with him in anti-gay bigotry, but because they clearly understood that what he had said wasn’t bigoted.

So here’s the actual graph, so far, of the American public’s opinion on gay marriage.

2014-01-07 Gay Marriage

Now, you can’t compare the shape of this graph to the abortion and interracial marriage graphs because the time frames are different. The interracial marriage chart goes back to 1958, the abortion chart goes back to 1975, and the gay marriage chart goes back to 1996. There’s no evidence, just based on the charts, to predict whether the gay marriage issue is going to be locked in a stalemate for decades (like abortion) or whether it will eventually resolve into near unanimity (like interracial marriage).

And, to be perfectly honest, I don’t have a high degree of confidence that I can predict the future on this issue either. Frankly, I suspect that the gay marriage chart will end up looking more like the interracial marriage chart than the abortion chart in decades to come. But it might not.

Goff and Ambrosino, both of whom support gay marriage, have already tacitly accepted that the gay marriage issue is not tied to broader acceptance of homosexuals as equal human beings in the same way that the interracial marriage issue is inextricable from racial inequality. You can’t logically support racial equality without supporting interracial marriage. But you can support equal rights for gays without supporting gay marriage. Race is not the same kind of identity as sexuality. This makes sense, since race is a nebulous biological category at best, but gender is much more clear cut.

The best thing that the gay marriage debate has done is force social conservatives to practice what they preach. In the 1990s and before, much if not most of the opposition to gay rights was really based on bigotry. It was based on “ick.” Conservative defenders of traditional marriage, as they style themselves, were much too slow to distance themselves from hateful rhetoric and genuine bigots. This blunder–both morally and strategically–cost them big. It may have been the deciding factor in the entire issue. Americans do not like haters.

But recently the traditional marriage movement has been sincerely careful in their articulation of a position that is anti gay marriage without being anti gay (to use Amrosino’s distinction). This distinction is obviously accepted by the broad swathe of American social conservatives, and I believe it explains the upwelling of support for Robertson better than the theory that half of Americans are just bigoted, hateful jerks. More importantly, even proponents of gay marriage like Goff and Ambrosino accept this possibility as well. All of this means that support for gay marriage may continue to climb until it reaches near-universal acceptance, or it may stall out well before that level (probably about where it is now) and become an entrenched, ongoing controversy like the abortion debate.

It’s too early to tell.

Minimum Wage Hike: Help or Harm?

Greg Mankiw points out that the President’s recent remarks about economics research into the impact of increasing minimum wage were somewhat misleading. The President said “there’s no solid evidence that a higher minimum wage costs jobs.” That makes it sound as though the concern is a mere ideological fabrication. In reality, however, it’s a hotly contested question even among economists and Mankiw pointed out a poll (of economists) that showed equal support from those who think that minimum wages help vs. hurt.

My own take is that minimum wages hurt, overall. I think the reason that this isn’t more obvious is that the effects take place over a long period of time. McDonald’s isn’t going to go out and fire all of the workers tomorrow because of a minimum wage hike because they’d have to replace them with computers and that’s an enormous, unplanned expenditure. But if McDonald’s believes minimum wages hikes are here to stay (e.g. if they are pegged to inflation as the President supposes), then they absolutely will gradually phase workers out and replace them with automated systems over time.

This isn’t just a pet theory I invented, the idea came from economist Miles Kimball blogging about Isaac Sorkin’s work. (Sorkin was in my PhD cohort at Michigan.) In the paper, Sorkin argues that we haven’t seen dramatic impacts from minimum wage policies in the US because they’ve always been temporary. President Obama’s proposal isn’t. So there’s very solid theoretical evidence and much less clear empirical evidence to suspect that the policy is going to be harmful for precisely the people it’s supposed to benefit.

At a minimum, folks should understand that when conservatives oppose minimum wage policies on humanitarian grounds, they are being sincere and reasonable.

The Gender Pay Gap: Work More, Get Paid More

Brenda Cronin had an op ed in the Wall Street Journal on Saturday arguing that if you want to decrease the gap between what men and women make, then you need to make work more flexible. This puts me in a bit of a philosophical bind because:

  1. I’m decidedly not committed to the idea that equal pay for gender is an intrinsically valuable goal. If men and women are paid on equal bases, but men gravitate towards more remunerative fields, why should I care? When inequality is the result of choice, it’s not necessarily a bad thing.
  2. On the other hand, I am committed to the idea of more flexible work culture. For knowledge workers, the antiquated mores of industrialized work places just don’t make sense.

In any case, I found the research pretty illuminating. For men and women who graduate with an MBA there is initially no pay gap, but it starts to appear after 5 years and is pretty entrenched at 15. What drives the gap?

Three factors explain 84% of the gap. Training prior to MBA receipt, (e.g., finance courses, GPA) accounts for 24%. Career interruptions and job experience account for 30%, and differences in weekly hours are the remaining 30%. Importantly, about two-thirds of the total penalty from job interruptions is due to taking any time out.

So about a quarter of the gap isn’t going to go away because it’s based on gender-neutral criteria (what classes you take and how well you did). Another 60% of the gap is simply based on time worked. If you work more, you will get paid more. This isn’t rocket science. I think it’s pretty stupid, however, because it leads to a culture of conspicuous chair-time instead of actual results. I’d love for companies to modernize work expectations because it’s the smart thing to do (and also because–as a man–I like having time with my family, too). And if that results in more gender equality: so much the better.

Mitt Romney Documentary

2013-12-18 Mitt Romney Documentary

In my day dreams, I win the lottery. Also, Americans decide that they were wrong about Mitt Romney and that Mitt Romney was right about everything. And they ask him to run one more time in 2016.

Hey… it could happen.

Teen Abortion & Pregnancy Rates

Centers for Disease Control and Prevention
Centers for Disease Control and Prevention

Alex Berezow, scientist and founding editor of RealClearScience, provided the chart above representing teenagers aged 15-19. The following are the teenage pregnancy rates: (1) White – less than 1 in 20, (2) Blacks – more than 1 in 9, and (3) Hispanics – almost exactly 1 in 10. “In other words,” writes Berezow, “both black and Hispanic teens are more than twice as likely to become pregnant as their white cohorts. Strikingly, the abortion rate among black teens (41.1 per 1,000) is almost equal to the pregnancy rate among white teens.” Research shows again and again how detrimental broken families (including single motherhood) are to economic vitality and social mobility. “Therefore,” concludes Berezow, “any discussion about how to close the enormous racial wealth gap in America must address the large discrepancy in teenage pregnancy rates between the races.”

This reminds me of something economist Jennifer Roback Morse wrote about “social justice”:

Young people are often the most idealistic and zealous proponents of new social movements. So, I offer this challenge especially to the young: if you want to do something to help the poor, quit idealizing unmarried sexual activity. Some sexual lifestyle decisions you can get away with. But those very same choices would be a disaster for the poor.

So I challenge college students and young adults to ask yourself this question when you are making your decisions about sex: If a high-school drop-out did this, would it be good for her or not?

If the answer is no, don’t do it! Or at least, have the decency to keep your mouth shut about social justice.

Inequality and Demographics

 

The above chart (as its title says) provides the details of U.S. households by income quintile. Economist Mark Perry summarizes some of the key differences between households (as of 2012):

1. On average, there are more income earners per household in the top quintile than in the lowest-income households.

2. Over 60% of the lowest-income households have no income earners, whereas the top quintile households have only 3% with no earners.

3. Over 75% of top quintile households are married couples, while this applies to only 17% of the lowest quintile households.

4. Nearly 80% of top quintile households fall within the prime earning ages of 35-64. Those in the bottom quintile are 1.6x more likely to be under 35 years of age and more than 5x more likely to be over 65 years old.

5. Nearly 80% of top quintile households include at least one adult working full-time compared to only 18.2% of those in lowest-income households.

6. Over 75% of those in the top quintile households have college degrees, while only about 13% of the lowest-income households.

As Perry summarizes,

Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent households.

The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g. staying in school, getting and staying married,etc.), which means that individuals and households are not destined to remain in a single income quintile forever.

The Passing of Nelson Mandela, 1918-2013

Nelson Mandela died today at 95. There is an excellent interactive piece in The New York Times documenting Mandela’s life and achievements. Another NYT article provides a moving quote from President Obama:

His commitment to transfer power and reconcile with those who jailed him set an example that all humanity should aspire to,” a grim President Obama said Thursday evening, describing Mr. Mandela as an “influential, courageous and profoundly good” man who inspired millions — including himself — to a spirit of reconciliation.

Read more

Eugenics and Economics in the Progressive Era

I was recently revisiting some of the research by economist Thomas C. Leonard of Princeton University on eugenics and economics during the Progressive Era. Leonard is currently working on a book entitled Excluding Inferior Workers: Eugenic Influences on Economic Reform in the Progressive Era. I had nearly forgotten about the excellent slide-show he produced for his book’s research. For those who have an interest in economic history–especially the Progressive Era’s influence on America’s economic thinking–these slides are definitely worth reading.