Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.
He looks at statistics across different sections of California.
Sort of randomly, the other morning I went to Zillow and looked up house prices in three places. On Faris Avenue, which is a block over from my childhood residence in suburban St. Louis (my own street was all multifamily dwellings, but I wanted to price a single-family home), there is a 1440 square foot house for sale for $37,900.
I know someone who lives in a more affluent suburb in St. Louis. A 2428 square foot house on their street, Eversdale Court, sold almost two years ago for $417,000. Thus, it is less than twice the size of the house on Faris avenue, but it is worth more than 10 times as much.
In Bethesda, a 45-minute bike ride from where I live now, there is a new condominium building called The Darcy with prices that range from the mid $600 K to $3 million. The smallest floor plan has 835 square feet.
Just to put this in perspective, for the price of an 835 square foot condo in Bethesda, you could buy close to 4000 square feet of home on Eversdale Court and about 20,000 square feet of homes on Faris Avenue (which would just about get you the whole street). I think this tells you everything you need to know about economic disparities. And if you use house prices as your indicator of disparities, my guess is that you will find plenty of correlation with educational attainment rates.
But the paradox is that if you think of education as fairy dust, and you try to sprinkle it on to the residents of Faris avenue, you could sprinkle like crazy without moving their economic status very much. The Null Hypothesis, which says that educational interventions have almost no discernible long-term effects in a replicable controlled-experiment setting, is a pretty safe bet.
As you probably know, Bryan Caplan’s explanation for the paradox is that education is all signaling. My hypothesis, which is not too much different, is that formal education is a cultural norm for the affluent.
In Bryan’s story, the educational credentials play a causal role, because if you don’t get the credentials, you send an adverse signal. In my story, educational credentials are not a cause. They are a symptom of your future affluence, which is caused by the personality traits you inherited from your affluent parents. So when we observe clusters of well-educated young people in particular geographic areas, what we are observing are clusters of children of affluent adults.
How does your own background (growing up on that multi-family street in St Louis) fit into your story. How do the many up-from-nothing examples fit? My own father, a dentist, came from a very nearly destitute family with my grandparents havingonly an 8th grade education.
Do you think these examples are rare exceptions to your story? If so what makes you think so?
I am struck by how little education I’d required to do what I actually do than ostensibly requires unbelievable amounts of education. Dentistry seems the same.
I have wondered if I could teach my minecraft playing toddler how to use Autocad if he were as motivated.
There is a “learn java with minecraft course” that is rated for 8 years old and up. Java is what my spouse makes a good living with.
It’s JavaScript, not Java. Big difference.
Kevin – Great question.
Arnold and Bryan are hypothesizing over different different things.
Arnold’s hypothesis says prosperity can only emerge from the morass through genetic mutations (aberrations). Brian’s does not take a view on the cause of differences, it only focuses on how the “aberrations” make it out of the morass.
Regarding Arnold’s hypothesis, it is difficult to believe it is all genetics.
I came from parents who were born into the poverty of 1930s carribean. My dad did not get to start high school. And my mom did not get to start middle school. They came to the US and settled into rural mid west (away from the urban centers), worked blue collar jobs, and had 7 kids. I, the youngest of 7, was able to compete high school, undergrad (in engineering) and graduate school (MBA) and am now a business professional. So what explains my story – genetic mutations? Birth order in immigrant families? Improved standard of living between the first and last birth? Other forms of circumstance?
Even if the root cause for my story and the stories of so many others were genetics, then you have to conclude that there are so many “genetic mutations” that making predictions with parental genetics will make you wrong very frequently.
You both are comparing your ancestor’s lack of education to subsequent generations’ attainment but not mentioning their ability if given similar opportunity and life situation.
“I think this tells you everything you need to know about economic disparities.”
I wouldn’t go that far, but it certainly is extremely interesting.
“In my story, educational credentials are not a cause. They are a symptom”
Bethesda is full of JDs and MDs and PhDs. I think it would be completely impossible to even get a phone interview for most of their jobs without an advanced degree with a D at the end. In some cases it wouldn’t even be legal to do those jobs without the degree. Things might be a little different in Silicon Valley, but in DC it would be very, very hard to go without the education signal.
Meritocracy is not all it’s cracked up to be. In fact, it can be hellish.
I would say it is both depending on the graduates’ originations. A degree is a signal if the graduate comes from a background where higher ed attainment wasn’t the norm. It is a signal that the holder is moving out of their “class”. However, if the graduate comes from an educated family, they are conditioned to see educational attainment as a necessity to future success. Or at least a necessity to keep mom/dad money flowing while the pursue their passion. Few of the latter even consider becoming a plumber, most of the former are pushed not to be.
Also, I recently watched the latest (Dec 4, 2014) talk with Thomas Sowell on Uncommon Knowledge. Dr. Sowell made an interesting point about 15 min in comparing wages across age groups starting from 1960. The disparity between younger workers and the top older group expanded over time with the top earning older group moving up in age as well. His observation from this was that it demonstrated the move away from skills of the young, strength and endurance, to those that came with age, experience and knowledge. Just exactly what we’d expect as the march toward a machine-civilization moved forward. The machines do the work while the rewards go to those with the skills to use the machines in new ways.
This tells me that in using education to move up the earnings ladder earlier, we need to not look at replicating the current work practices but rather what, perhaps commercially anachronistic, experience the school can provide to advance the student’s understanding of the underlying elements often hidden by the machine doing the job.
A reflection from a 3rd Mate regarding his captain:
When asked why he spends so much time in the office:
“There comes a time in most men’s careers when they stop being paid for what they do and start getting paid for what they know…. and by asking such a question of your Captain it’s clear to me that if you want a check next month you better go find a chipping hammer.”