This article by the political journalist Thomas B. Edsall appeared in the New York Times. I don’t think the title of the original (used here) is accurate or fair. The points I take from the article are
1) when almost everyone has a high school diploma, there is little or no benefit to having one although there is a huge penalty for not having one;
2) the more advanced education one has, the greater the long-term economic benefits;
3) early childhood experiences and education have positive benefits;
4) socioeconomic circumstances of students have a large impact on their success or failure in schools;
5) schools alone cannot overcome the deep and growing inequality in society and do not have the impact that would be produced by progressive taxation and policies that diminish poverty and inequality.
Edsall writes:
There is an ongoing debate over what kind of investments in human capital — roughly the knowledge, skills, habits, abilities, experience, intelligence, training, judgment, creativity and wisdom possessed by an individual — contribute most to productivity and life satisfaction.
Is education no longer “a great equalizer of the conditions of men,” as Horace Mann declared in 1848, but instead a great divider? Can the Biden administration’s efforts to distribute cash benefits to the working class and the poor produce sustained improvements in the lives of those on the bottom tiers of income and wealth — or would a substantial investment in children’s training and enrichment programs at a very early age produce more consistent and permanent results?
Take the case of education. On this score — if the assumption is “the more education, the better” — then the United States looks pretty good.
From 1976 to 2016 the white high school completion rate rose from 86.4 percent to 94.5 percent, the Black completion rate from 73.5 percent to 92.2 percent and the Hispanic completion rate rose from 60.3 percent to 89.1 percent. The graduation rate of whites entering four-year colleges from 1996 to 2012 rose from 33.7 to 43.7 percent, for African Americans it rose from 19.5 to 23.8 percent and for Hispanics it rose from 22.8 to 34.1 percent.
But these very gains appear to have also contributed to the widening disparity in income between those with different levels of academic attainment, in part because of the very different rates of income growth for men and women with high school degrees, college degrees and graduate or professional degrees.
Education lifts all boats, but not by equal amounts.
David Autor, an economist at M.I.T., together with the Harvard economists Claudia Goldin and Lawrence Katz, tackled this issue in a paper last year, “Extending the Race Between Education and Technology,” asking: “How much of the overall rise in wage inequality since 1980 can be attributed to the large increase in educational wage differentials?”
Their answer:
Returns to a year of K-12 schooling show little change since 1980. But returns to a year of college rose by 6.5 log points, from 0.076 in 1980 to 0.126 in 2000 to 0.141 in 2017. The returns to a year of post-college (graduate and professional) rose by a whopping 10.9 log points, from 0.067 in 1980 to 0.131 in 2000 and to 0.176 in 2017.
I asked Autor to translate that data into language understandable to the layperson, and he wrote back:
There has been almost no increase in the increment to individual earnings for each year of schooling between K and 12 since 1980. It was roughly 6 percentage points per year in 1980, and it still is. The earnings increment for a B.A. has risen from 30.4 percent in 1980 to 50.4 percent in 2000 to 56.4 percent in 2017. The gain to a four-year graduate degree (a Ph.D., for example, but an M.D., J.D., or perhaps even an M.B.A.) relative to high school was approximately 57 percent in 1980, rising to 127 percent in 2017.
These differences result in large part because ever greater levels of skill — critical thinking, problem-solving, originality, strategizing — are needed in a knowledge-based society.
“The idea of a race between education and technology goes back to the Nobel Laureate Jan Tinbergen, who posited that technological change is continually raising skill requirements while education’s job is to supply those rising skill levels,” Autor wrote in explaining the gains for those with higher levels of income. “If technology ‘gets ahead’ of education, the skill premium will tend to rise.”
But something more homely may also be relevant. Several researchers argue that parenting style contributes to where a child ends up in life.
As the skill premium and the economic cost of failing to ascend the education ladder rise in tandem, scholars find that adults are adopting differing parental styles — a crucial form of investment in the human capital of their children — and these differing styles appear to be further entrenching inequality.
Such key factors as the level of inequality, the degree to which higher education is rewarded and the strength of the welfare state are shaping parental strategies in raising children.
In their paper “The Economics of Parenting,” three economists, Matthias Doepke at Northwestern, Giuseppe Sorrenti at University of Zurich and Fabrizio Zilibotti at Yale, describe three basic forms of child rearing:
The permissive parenting style is the scenario where the parent lets the child have her way and refrains from interfering in the choices. The authoritarian style is one where the parent imposes her will through coercion. In the model above, coercion is captured through the notion of restricting the choice set. An authoritarian parent chooses a small set that leaves little or no leeway to the child. The third parenting style, authoritative parenting, is also one where the parent aims to affect the child’s choice. However, rather than using coercion, an authoritative parent uses persuasion: she shapes the child’s preferences through investments in the first period of life. For example, such a parent may preach the virtues of patience or the dangers of risk during when the child is little, so that the child ends up with more adultlike preferences when the child’s own decisions matter during adolescence.
There is an “interaction between economic conditions and parenting styles,” Doepke and his colleagues write, resulting in the following patterns:
Consider, first, a low inequality society, where the gap between the top and the bottom is small. In such a society, there is limited incentive for children to put effort into education. Parents are also less concerned about children’s effort, and thus there is little scope for disagreement between parents and children. Therefore, most parents adopt a permissive parenting style, namely, they keep young children happy and foster their sense of independence so that they can discover what they are good at in their adult life.
The authors cite the Scandinavian countries as key examples of this approach.
Authoritarian parenting, in turn, is most common in less-developed, traditional societies where there is little social mobility and children have the same jobs as their parents:
Parents have little incentive to be permissive in order to let children discover what they are good at. Nor do they need to spend effort in socializing children into adultlike values (i.e., to be authoritative) since they can achieve the same result by simply monitoring them.
Finally, they continue, consider “a high-inequality society”:
There, the disagreement between parents and children is more salient, because parents would like to see their children work hard in school and choose professions with a high return to human capital. In this society, a larger share of parents will be authoritative, and fewer will be permissive.
This model, the authors write, fits the United States and China.
There are some clear downsides to this approach:
Because of the comparative advantage of rich and educated parents in authoritative parenting, there will be a stronger socioeconomic sorting into parenting styles. Since an authoritative parenting style is conducive to more economic success, this sorting will hamper social mobility.
Sorrenti elaborated in an email:
In neighborhoods with higher inequality and with less affluent families, parents tend to be, on average, more authoritarian. Our models and additional analyses show that parents tend to be more authoritarian in response to a social environment perceived as more risky or less inspiring for children. On the other hand, the authoritative parenting styles, aimed at molding child preferences, is a typical parenting style gaining more and more consensus in the U.S., also in more affluent families.
What do these analyses suggest for policies designed to raise those on the lowest tiers of income and educational attainment? Doepke, Sorrenti and Zilibotti agree that major investments in training, socialization and preparation for schooling of very young (4 and under) poor children along the lines of proposals by Nobel Laureate James Heckman, an economist at the University of Chicago, and Roland Fryer, a Harvard economist, can prove effective.
In an October 2020 paper, Fryer and three colleagues described
a novel early childhood intervention in which disadvantaged 3-4-year-old children were randomized to receive a new preschool and parent education program focused on cognitive and noncognitive skills or to a control group that did not receive preschool education. In addition to a typical academic year program, we also evaluated a shortened summer version of the program in which children were treated immediately prior to the start of kindergarten. Both programs, including the shortened version, significantly improved cognitive test scores by about one quarter of a standard deviation relative to the control group at the end of the year.
Heckman, in turn, recently wrote on his website:
A critical time to shape productivity is from birth to age five, when the brain develops rapidly to build the foundation of cognitive and character skills necessary for success in school, health, career and life. Early childhood education fosters cognitive skills along with attentiveness, motivation, self-control and sociability — the character skills that turn knowledge into know-how and people into productive citizens.
Doepke agreed:
In the U.S., the big achievement gaps across lines of race or social class open up very early, before kindergarten, rather than during college. So for reducing overall human capital inequality, building high quality early child care and preschool would be the first place to start.
Zilibotti, in turn, wrote in an email:
We view our work as complementary to Heckman’s work. First, one of the tenets of his analysis is that preferences and attitudes are ‘malleable,’ especially so at an early age. This is against the view that people’s success or failure is largely determined by genes. A fundamental part of these early age investments is parental investment. Our work adds the dimension of “how?” to the traditional perspective of “how much?” That said, what we call “authoritative parenting style” is relative to Heckman’s emphasis on noncognitive skills.
The expansion of the Heckman $13,500-per-child test pilot program to a universal national program received strong support in an economic analysis of its costs and benefits by Diego Daruich, an economist at the University of Southern California. He argues in his 2019 paper “The Macroeconomic Consequences of Early Childhood Development Policies” that such an enormous government expenditure would produce substantial gains in social welfare, “an income inequality reduction of 7 percent and an increase in intergenerational mobility of 34 percent.”
As the debate over the effectiveness of education in reducing class and racial income differences continues, the Moving to Opportunityproject stresses how children under the age of 13 benefit when they and their families move out of neighborhoods of high poverty concentration into more middle-class communities.
In a widely discussed 2015 paper, “The Effects of Exposure to Better Neighborhoods on Children,” three Harvard economists, Raj Chetty, Nathaniel Hendren and Katz, wrote:
Moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties.
There is a long and daunting history of enduring gaps in scholastic achievement correlated with socioeconomic status in the United States that should temper optimism.
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In a February 2020 paper — “Long-Run Trends in the U.S. SES-Achievement Gap” — Eric A. Hanushek of the Hoover Institution at Stanford, Paul E. Peterson of Harvard’s Kennedy School, Laura M. Talpey of Stanford’s Institute for Economic Policy Research and Ludger Woessmann of the University of Munich report that over nearly 50 years:
The SES-achievement gap between the top and bottom SES quartiles (75-25 SES gap) has remained essentially flat at roughly 0.9 standard deviations, a gap roughly equivalent to a difference of three years of learning between the average student in the top and bottom quartiles of the distribution.
The virtually unchanging SES-achievement gap, the authors continue, “is confirmed in analyses of the achievement gap by subsidized lunch eligibility and in separate estimations by ethnicity that consider changes in the ethnic composition.”
Their conclusion:
The bottom line of our analysis is simply that — despite all the policy efforts — the gap in achievement between children from high- and low-SES backgrounds has not changed. If the goal is to reduce the dependence of students’ achievement on the socio-economic status of their families, re-evaluating the design and focus of existing policy programs seems appropriate. As long as cognitive skills remain critical for the income and economic well-being of U.S. citizens, the unwavering achievement gaps across the SES spectrum do not bode well for future improvements in intergenerational mobility.
The pessimistic implications of this paper have not deterred those devoted to seeking ways to break embedded patterns of inequality and stagnant mobility.
In a November 2019 essay, “We Have the Tools to Reverse the Rise in Inequality,” Olivier Blanchard of the Peterson Institute for International Economics and Dani Rodrik, an economist at Harvard, cited the ready availability of a host of policies with strong support among many economists, political scientists and Democrats:
Many areas have low-hanging fruit: expansion of EITC-type programs, increased public funding of both pre-K and tertiary education; redirection of subsidies to employment-friendly innovation, greater overall progressivity in taxation, and policies to help workers reorganize in the face of new production modes.
Adoption of policies calling for aggressive government intervention raise a crucial question, Autor acknowledged in his email: “whether such interventions would kill the golden goose of U.S. innovation and entrepreneurship.” Autor’s answer:
At this point, I’d say the graver threat is from inaction rather than action. If the citizens of a democracy think that “progress” simply means more inequality and stratification, and rising economic insecurity stemming from technology and globalization, they’re eventually going to “cancel” that plan and demand something else — though those demands may not ultimately lead somewhere constructive (e.g., closing U.S. borders, slapping tariffs on numerous friendly trading partners, and starving the government of tax revenue needed to invest in citizens was never going to lead anywhere good).
A promising approach to the augmentation of human capital lies in the exploration of noncognitive skills — perseverance, punctuality, self-restraint, politeness, thoroughness, postponement of gratification, grit — all of which are increasingly valuable in a service-based economy. Noncognitive skills have proved to be teachable, especially among very young children.
Shelly Lundberg, an economics professor at the University of California-Santa Barbara, cites a range of projects and studies, including the Perry Preschool Project, an intensive program for 3-to-4-year-old low-income children “that had long-term impacts on test scores, adult crime and male income.” The potential gains from raising noncognitive skills are wide-ranging, she writes in a chapter of the December 2018 book “Education, Skills, and Technical Change: Implications for Future US GDP Growth”:
Noncognitive skills such as attention and self-control can increase the productivity of educational investments. Disruptive behavior and crime impose negative externalities in schools and communities that increased levels of some noncognitive skills could ameliorate.
But, she cautions,
the state of our knowledge about the production of and returns to noncognitive skills is rather rudimentary. We lack a conceptual framework that would enable us to consistently define multidimensional noncognitive skills, and our reliance on observed or reported behavior as measures of skill make it impossible to reliably compare skills across groups that face different environments.
Education, training in cognitive and noncognitive skills, nutrition, health care and parenting are all among the building blocks of human capital, and evidence suggests that continuing investments that combat economic hardship among whites and minorities — and which help defuse debilitating conflicts over values, culture and race — stand the best chance of reversing the disarray and inequality that plague our political system and our social order.
