Jan Resseger writes here about Raj Chetty’s return to Harvard to start a new project, reviving the American dream. l
In the past, we have known Raj as the prime author of a widely doubted study that concluded that one effective teacher (who raised test scores) would have a significant impact on lifetime earnings, pregnancy rates, and other important life outcomes. In the years since that study was published, the efforts to apply its lessons have universally failed, because–as social scientists have long known–the influence of teachers on student test scores is small as compared to the influence of the family, its income, its level of education, its devotion to education.
Jan’s post begins:
Raj Chetty, the superstar, big-data economist, has returned to Harvard from Stanford to establish his own Opportunity Insights research and policy institute, a project seeded with funding from the Bill & Melinda Gates Foundation and the Chan-Zuckerberg Initiative. Chetty’s research has created an Opportunity Atlas, which maps neighborhoods of opportunity and other neighborhoods where children are unable to move up the economic ladder.
After reviewing some of his ideas, Jan asks why Gates and CZI don’t advocate for a higher minimum wage, which doesn’t need a lot of new research to establish the premise that the best way to reduce poverty is to increase family incomes.
This is a good opportunity to recommend two very valuable books about the paradox of super-rich people saving the world:
Anand Girihiradhas, Winners Take All
Michael Edwards: Small Change: Why Business Won’t Save the World
Edwards makes this salient point: Why ask capitalists (or philanthrocapitalists, as he calls them) to fix the problems created by capitalism?
Diane Ravitch's blog 
Someone should do something like this, find patterns and ways to improve neighborhoods. But not Chetty. He’s just looking for something to misunderstand, again. The quintessence of upper mobility, the upper-mobility formula. He’s going to fudge and misinterpret his results to suggest what this non-existant, ill-conceived thing is. And Gates will transform landscapes based on it.
Existent
Non-existent
“He’s just looking for something to misunderstand again…[something] to fudge and misinterpret.” Exactly how the game is played.
It’s telling that the author of The Atlantic article about Chetty points out that Chetty does not like to upset anyone with his recommendations. If this comment were not so significant, one would have to laugh at the way our genius researchers are limited by the thin skins of private philanthropists. What good is it if “geniuses” cannot go where their beautiful minds might take them, because people like Bill Gates might be upset by what such minds discover?
Tangential, I realize, but I think we need to stop advocating to “raise” the minimum wage and instead tie minimum wage to maximum compensation somehow. I think it was Sweden (if not, then some other Scandinavian country) that tried to pass a “1 in 12” law – no executive should make more in one month than his/her lowest paid employees make in twelve months. The law failed, but it was definitely on the right track. The argument that “companies will just raise prices to cover the increased wages” falls apart if increased low-level wages are offset by decreased executive compensation. It would be a complicated formula because we’d have to account for all the loopholes as far as what counts as “compensation” (my answer: all of it: wages, benefits, stocks, stock options, deferred payments, etc.) and other factors, but it’s the only way to decrease income inequality.
In the absence of unions this sounds like a wonderful way to address income inequality, and it is unlikely to be adopted in this country.
Because we all know that the ones with the most/biggest mansions, the most toys, and the most holed up in overseas accounts always win the game. America is nothing but a big competition.
YES: the more money the billionaires make, the more they simply live to compete with each other, hoping to show on paper that they made more, that they have more, that they are ‘winning’ at this socially devastating game
The odds are never
Dienne,
You know that will never pass any state legislature or Congress. Politicians need money to run and they ask for it from the very people whose income you want to regulate. Think Citizens United
Maybe if we didn’t reflexively jump to vote for people who don’t represent us just because they have a “D” after their name because they’re (supposedly) better than the people with “R” after their name. If politicians knew that third parties were a viable threat, they’d have to start paying attention to voters rather than just donors. Roughly 40% of the population identifies as Independent. There’s no reason we should be marginalized, except for this abusive, learned helplessness relationship we’ve allowed ourselves to be bullied into in which supposedly There Is No Alternative.
There ARE alternatives: make politicians earn your vote.
But then there are the legislators!
dienne77…..I have heard some arguments from the health care industry about the raising of the minimum wage. Phlebotomists, nursing aids and assistants, those who work with the mentally challenged, janitors etc. make more than the current minimum wage but less than the $15 of the proposed raise. Health care is claiming that all of the “support staff’ will leave to work in “a McDonalds” because they would make more money. Now, to that I would say that the health care industry (which is 100% privatized BTW….and is a mess) needs to do some evaluating on their part and raise the wages of the lower level worker bees that keep the whole system running…..but who am I to say? Anyway, I think the Swedes are onto something that is likely better than just raising the minimum wage. My guess is that if this were to get widely publicized in the US, the Billionaires would likely just give in to the minimum since they could still keep their power along with the lion’s share of the wealth. The Libertarians want it ALL, with NO strings attached and NO rules.
The Forbes article described Chetty as a scientist. An economist is a social scientist that uses lots of soft, not hard data. There is a lot of room for error as we well know from the epic failure of VAM. The data are only as solid as the assumptions that generated the data. Thus, there is a lot of room for error.
“Opportunity bargains” describe areas where poor young people can be upwardly mobile. There are many variables beyond someone’s zip code that determine an individual’s success. An individual’s drive, ambition, intelligence, talents and mental well being all play a role as well. Discrimination is part of the dynamics as well. Simply collecting data like testing will not address society’s problems.
A simple way that would help poor families help their children is to raise the minimum wage. Nobody wants or needs to have Gates or Zukerberg to be involved to do that. In fact, the presence of these two is a red flag as these billionaires are best known for helping themselves at others’ expense.
Just got back from my annual “dramatic immersion” at the Stratford Festival in Canada where I took in one hecuba superb production of this charming little allegory on the Spirit of Capitalism —
I found it worth noting that the impact of difference between high opportunity and low opportunity circumstances calculates out to about $2,000/year or $1.00/hour over a lifetime working. It is hard to consider that a game changer.
Chetty had the same problem with his much lauded study of teacher effectiveness. There was a lot of celebration about how one great teacher raised the class lifetime income by $266,000 but when divided by 26 children over a forty year work life, it was not much money. Maybe a cup of coffee at Starbucks once a week.
Ironically, it was that cup of coffee from Starbucks that was the boost that did it! So, the kids could pay it forward to countless future teachers! And that’s also the upward-mobility secret ingredient, the Starbucks! I see it now, the Starbucks mall, museum, school and transportation metropoli. Residential on the bottom, mostly, some on top, the penthouse pavilions.
Or largely not. You know how that goes.
“I’d like a grande cap with room. Oh wait, all I have is catastrophic systemic disruption affecting countless lives.”
“We’ll take that.”
“Oh, really. Hmmm.”
“Don’t do it. Don’t question it. You won’t enjoy it. How much room do you want, enough for a pool, a school or a golf course?”
Even Chetty’s claims of what amounted to a very small effect were only arrived at through Chetty picking of data.
I know you have read Moshe Adler’s critique but others may not have.
http://vamboozled.com/moshe-adler-on-chetty-et-al/
Chetty picking is one of the things Adler highlights, which Chetty et Al basically dismissed with handwaving arguments.
Despite his claims to the contrary, economics is not a science precisely because people like Chetty are not scientists.
Economics could be a science if more economists were scientists
https://neweconomicperspectives.org/2013/10/economics-science-economists-scientists.html
Chetty fits right in with the others at the Harvard econ department.
AChetty et al were obviously very confused about some very basic statistical principles. If the signal does not rise above the noise at age 30 for their original dataset, according to Chetty et al’s own admission (“one cannot reject the hypothesis that the effect [at 30] is zero”), how could they claim (in the very same paragraph!) that “impact [at age 30] is actually larger” [than at 28]? They could NOT. Not legitimately . To do so is just nonsense.
Chetty et al rather conveniently avoided addressing some of the critical issues that Adler brought up, particularly his point about using the latest, greatly augmented data set to calculate an estimated income increase for 30 year olds.
Why would they NOT include the age 30 result, when, as Adler pointed out at the time of his critique, they actually had sufficient data (even if they did not before)? If they still found a non-significant result at age 30, even with the much larger data set, that information would be highly relevant and absolutely should have been be included in their latest paper.
But of course, then they would have had no paper. 😀
The very idea that Chetty et al could detect (divine?) such a small differential “impact” (~$200 at age 28) from a single teacher decades before stretches the outer bounds of credulity, especially given the noise due to all the other factors, but that Chetty et al extrapolated that effect for decades thereafter is just plain ridiculous.
That’s not legitimate use of mathematics. It’s mathturbation worthy of the junk heap, certainly not a prize.
Also, SDP, how do they factor in the idea of growing a conscience and intellectually maturing out of lots of high-paying jobs and careers and heading back to academia or into the arts or activism at nonprofits, etc. ?
Or does that chafe against their attitudes, so they completely ignore it? Or do they, the donors, want to actively discourage it?
SDP “Economics could be a science if more economists were scientists”
I do not think so. Its basic assumptions depend on politics. In fact, it’s politicians who decide what economics is, they are the ones who decide on the meaning of “the economy is great”.
The whole business with economics has become clear in the very beginning, when The Institute for Advanced Study in Princeton offered a membership to an economist instead of Schrödinger despite his Nobel prize and Einstein’s recommendation.
Mate
I think you are right but that claim was actually being made by William Black who was responding to Chetty’s whining in the NY Times about how economists and economics were being treated unfairly.
Black pointed out correctly that economists are profoundly UN empirical (unscientific) because they regularly ignore the elephant in the room: fraud and act surprised (as Alan Greenspan famously did) when the fraud is pointed out to them and they can no longer ignore it.
But you are right that the fundamental underpinnings of economics are political/ideological so it is really impossible for it ever to be a science.
It’s interesting that one of latest economics book, Piketty’s Capital in the 21st century, has very little math in it, and the most complicated formula is a fraction. It’s very readable too.
We already know that certain neighborhoods provide more opportunities than others for young people. We do not need Chetty to tell us that. We need to spread more opportunity to more young people, and we should not ration opportunity they way the charter industry does. The private charter industry’s attitude toward the rejected student is, “Let them eat cake.”
Chetty, like his funders, think gobs of data will provide answers to problems which are always reduced to economic problems free of any other consideration.
I would like to think that just raising the minimum wage would lift a family out of poverty. It is not quite so simple, as this article about a small California town with a high minimum wage shows. https://www.ar15.com/forums/general/America-s-Highest-Minimum-Wage-Sparks-Fight-in-Small-California-City/5-2240621/https://www.ar15.com/forums/general/America-s-Highest-Minimum-Wage-Sparks-Fight-in-Small-California-City/5-2240621/
Consider the fact that many workers are also dealing with child-care costs that are, if anything, likely to be raised with a higher minimum wage, but also vary ( like current income) by state. This website offers state-by-state estimates of childcare costs.
https://www.epi.org/child-care-costs-in-the-united-states/#/CA
And then there is the obstacle in Congress of Mitch McConnell who will not allow a Senate vote on any bill that has passed the house. There are also some bizarre statistics on the tradeoffs between gains in the hourly wage for workers and estimates of jobs lost, with academics usually having a lower estimate of potential job losses than the Congressional Budget Office. This article also discusses the fate of wage earners who are paid a token amount and depend on customer tips to reach a minimum wage.
https://www.vox.com/2019/7/18/20697509/minimum-wage-bill-raise-the-wage-act
Re reducing issues to economic problems free of other considerations.
This is the KEY factor.
There is a fellow who calls himself “teaching economist” who posts here from time to time who thinks he is very clever by pointing out that Chetty et Al only claim what many people here do: that good teachers make a difference.
But Teaching economist is under the misapprehension that rejecting Chetty’s (BS) study is tantamount to admitting that good (and poor) teachers do not make a difference in the lives of the children and young adults that they teach.
But that is just so much nonsense because there are lots of things that teachers can and do have an effect on that have little (if anything) to do with lifetime earnings (and as I indicated above, even Chetty’s claims about the latter are based on BS statistics)
Laura,
There is also good evidence that minimum wage increases, at least at the municipal level, result in a decrease in work hours that more than offsets the increase in wages. The most comprehensive studies are coming out of Seattle. See this working paper https://evans.uw.edu/sites/default/files/NBER%20Working%20Paper.pdf or listen to this interview: http://www.econtalk.org/jacob-vigdor-on-the-seattle-minimum-wage/
“The most significant challenge Chetty faces is the force of history… On his national atlas [of low-social-mobility areas], the most obvious feature is an ugly red gash that starts in Virginia, curls down through the Southeast’s coastal states—North Carolina, South Carolina, Georgia, and Alabama—then marches west toward the Mississippi River, where it turns northward before petering out in western Tennessee. When I saw this, I was reminded of another map: one President Abraham Lincoln consulted in 1861, demarcating the counties with the most slaves. The two maps are remarkably similar. Set the documents side by side, and it may be hard to believe that they are separated in time by more than a century and a half, or that one is a rough consensus of men and women kept in bondage at the time of the Civil War, and the other is a computer-generated glimpse of our children’s future.”
The past is present.
Thank goodness Chetty never got a (fake) “Nobel Prize” because, like many others, he would almost certainly have used it to gain undue influence over policy.
After the abysmal track record of VAM in the US over the past few years, I suspect the committee that selects the winner of econ prize would now no longer touch the Chetty work with a 100 foot pole.
Alas, Chetty went Supernova early in his career and left only a black hole and a cloud of gas.
Chetty is going to give Zucks and Gates profitable investment Opportunity Insights. (Opportunities to target more neighborhoods with TFAers and charters.) The project will result in more opportunities — for investors. It will also further reduce the billionaires’ taxes. Win-win — for investors. When will Harvard learn to avoid letting its once academic research be controlled by its greediest dropouts?
Yes. That is a primary use of data for Chetty/ Gates/Zuckerberg. This troika hopes to compete with Nobel Economist James Heckman, J. B. Pritzker and others on the sale of social impact bonds/ pay-for-sucess contracts. See more on the investment opportunities at the link below, along with the cynical marketing.
http://seattleducation.com/2018/06/17/heckman-and-pritzker-pitch-apps-as-poverty-solutions-yielding-a-13-return-on-investment/
When?
Never, because Harvard is ALL about the money.
It’s basically a house of ill repute.
And certain departments at Harvard (econ, education, Kennedy school, business) were never about legitimate academic research. They are a joke and only clowns need apply.
Do clowns actually ‘need’ to apply, or can they just show up in a clown car and pull each other out of their pockets?
Raj Chetty joined the likes of Roland Fryer and Larry Summers (linked to Jeffrey Epstein and, friends with the architect of Russian privatization, Andrei Shleifer) as one of the rare professors who made tenure before 30 years of age. What do the 3 have in common? Their work pleases the barbarians at the gate e.g. those at the gate of public education. The Vox site, which is joined at the hip with the neoliberal lite, Daily Kos, appears to fawn over Chetty.
Big surprise (sarcasm).