Category Archives: Growth Causes and Consequences

Megan McArdle on Bifurcated Family Patterns

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She writes,

Could this be genetic? you ask. People who have impulse-control problems might be more likely to divorce and pass those traits on to their kids. Partially, sure. But two evidence points argue against genetic determinism. First, similar, although less severe, patterns show up in the case of kids who lose one parent, which is mostly not going to be due to homicide. And second, if this is genetic, how come it has changed over time? Have we all gotten genetically less able to stay out of jail or sustain a long-term marriage?

We know that children of single-parent households have worse outcomes than children of two-parent households. To simplify, let us say that there are favorable family patterns and unfavorable family patterns.

First question: how much of this is causal?

It could be that an inability to do well on the marshmallow test causes you to be less likely to raise children in a favorable family pattern and also more likely to pass on to your children genes that cause them to be unable to do well on the marshmallow test. That is how genetics could account for the relationship between family patterns and child outcomes.

Megan asks, what has changed over time? It could be two things. First, nowadays it may be that you have to be much better at the marshmallow test to sustain a favorable family pattern. Second, it may that we have gone through two or three generations of increasingly assortive mating.

Until 1965, a man who was in the top third on the marshmallow test might very well have been married to a woman in the bottom third, and conversely. For one thing, the top third and the bottom third were not that far apart. For another, the signals of being able to do well on the marshmallow test were not as clear (college education was too rare to be a reliable signal, particularly among women). Finally, men and women cared more about separate respective roles (breadwinner and homemaker) than about common abilities in the marshmallow test.

But in the 1960s that began to change. So you get one generation of assortive mating, and for the children of these marriages the difference between the top third and the bottom third on the marshmallow test starts to widen. Then they grow up, engage in assortive mating, have children, and difference widens once more. And so on.

But suppose we assume that there is a strong causal relationship between bad family patterns and bad outcomes. That leads to our

Second question: what can policy makers do to improve family patterns?

If anti-poverty programs are the solution, then why has the problem been getting worse? The Center on Budget and Policy Priorities (pointer from Mark Thoma) will tell you that anti-poverty programs are working to keep people out of poverty. So why are we not seeing more family stability? (Ross Douthat makes related points. Pointer from Tyler Cowen.)

Of course, there is a hypothesis, going back to Moynihan’s analysis, that anti-poverty programs are the problem, rather than the solution, because on the margin they reduce incentives to marry. I am skeptical about that, but as you know I am all for replacing current means-tested programs with a universal benefit that has a low implicit marginal tax rate. The idea is to reduce the adverse incentives that presently exist.

Megan, like Charles Murray, would like to see elites proclaim the benefits of good family patterns. I am skeptical of that, also.

My guess is that family patterns are not amenable to public policy interventions.

Comment on the Intelligence of Foragers and Farmers

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A commenter on this post writes,

Under the Hariri / Diamond theory, you would expect [foragers] and their current descendants to be some of the of the most cognitively gifted people in the world, doing great in school with high test scores, and easily punching well above their weight in all sorts of intellectual pursuits, or at least in the those areas where the hypothetical forager intelligence provides a comparative advantage versus those dull farmers. If, for example, they really need such a phenomenal memory to remember all those plants, then we should see that many of their descendants have exceptions memories and succeed in careers that leverage that special talent.

But not only do we not see this, we see exactly the opposite.

Indeed, one should be wary of just-so stories, particularly when plainly visible evidence runs counter to them.

Trade, Employment and Wages

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Derek M. Scissors writes,

If trade deficits have caused job loss for decades, millions of jobs on some counts, we should see a clear and sustained relationship between trade and unemployment. We don’t.

Right away, I can think of two reasons not to find a relationship.

1. As with many macroeconomic variables, there is causal density. Many factors affect the trade balance, and many factors affect unemployment. In standard international macro, anything that strengthens domestic demand will cause employment to rise along with the trade deficit.

2. Deviations from full employment are temporary (they last for several years, but not forever), at least according to many economic theories. In the long run, the primary effect of globalization should be on the wage rates of various workers, not on the employment rates. And indeed a recent paper by Ebenstein and others claims to find such effects

The Flynn Effect Puzzle

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From a BBC article.

Richard Lynn notes that measures of infants’ mental development increased in the UK and US at rates correlated to the increasing IQs of slightly older children. It’s difficult to see how Flynn’s theories are enough to explain this. “Are infants thinking more scientifically today?” he asks rhetorically.

Pointer from Neerav Kingsland, who writes,

For gains in IQ, I wonder whether changes in the method of harnessing energy caused IQ gains (our brains adapted to the needs of the new economy), or whether gains in IQ led to the development of new ways of harnessing energy (we got smarter and invented new ways of doing things).

My guess is that, for the transition from farming to industry, it’s the former.

Or to put it another way: humans developed the IQ we needed.

In Sapiens, Yuval Noah Hariri argues that foragers need more intelligence than farmers. Foragers need to know much more about their environment, including information about many varieties of plants. Farmers just need to know a routine for raising a staple crop.

One can argue that ordinary workers in the early stages of the industrial revolution did not need to know much, either. More recently, the skill demands of jobs have gone up, so that we may be reverting to forager-level intelligence.

But what is the mechanism by which “humans developed the IQ we needed.” For foragers, the mechanism is Darwinian. If you cannot remember which plants are edible, you die without passing on your genes. By the same token, farming is dysgenic. It allows more intellectually weak people to survive.

But does that mean that we should seek a eugenic explanation for the Flynn effect? That is, for the past hundred years, has the trend within a given country been for the proportion of children born of less-intelligent parents to decline? Researchers, including Lynn, seem to prefer nurture-based explanation.

Provocative Sentences

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From Yuval Noah Harari, author of what is likely an interesting new book, Sapiens.

you should take into consideration the possibility that medicine in the 21st century will be elitist, and that you will see growing gaps because of that, biological gaps between rich and poor and between different countries. And you cannot just trust a process of trickling down to solve this problem.

There are fundamental reasons why we should take this very seriously, because generally speaking, when you look at the 20th century, it’s the era of the masses, mass politics, mass economics. Every human being has value, has political, economic, and military value, simply because he or she is a human being, and this goes back to the structures of the military and of the economy, where every human being is valuable as a soldier in the trenches and as a worker in the factory.

But in the 21st century, there is a good chance that most humans will lose, they are losing, their military and economic value. This is true for the military, it’s done, it’s over. The age of the masses is over.

Almost twenty years ago, I wrote essays, such as this one, on the differences between the industrial era and the post-industrial era. One of these differences is that in the industrial era everything was about “mass.” Mass production, mass consumption, mass warfare, etc. That is not so true now, and the social implications are large.

The new Robert Putnam Book

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I got it as soon as it was released and finished it in a few hours.

I like his top third/bottom third way to approach inequality. Of the four forces, he emphasizes what I have been calling demographic disparity and what he calls, more descriptively, bifurcated family patterns; he mentions, using different terms, factor-price equalization and Moore’s Law, but does little with them. Nothing on the New Commanding Heights.

He is inexcusably shabby toward Charles Murray. He does not say he owes a debt to Murray. He does not summarize Coming Apart. He just gives it one brief, dismissive footnote.

Putnam plays very fast and loose with correlation and causality. At one point, he even admits this.

He never once mentions genetics as a factor in inequality. This biases the analysis much more in favor of policy remedies than is reasonable.

Overall, I came away with some new data points, but no new insights, and some anger and frustration with the flaws.

Some of the data and some of the analysis goes against his lefty readers’ biases, although he makes it easy for them to stumble over these truths, pick themselves up, and move on as if nothing happened. (Churchill’s phrase)

David Brooks on Redistribution vs. Education

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He writes,

No redistributionist measure will have the same long-term effect as good early-childhood education and better community colleges, or increasing the share of men capable of joining the labor force.

Pointer from Tyler Cowen.

A cynical believer in the Null Hypothesis would argue that putting money into education is an exercise in redistribution. It will redistribute income toward teachers’ unions members, college professors, and administrators.

Also, what is the probability that Brooks is simply trolling Bryan Caplan?

Sentences I Might Have Written

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from Megan McArdle:

1950s health care isn’t expensive; this same regimen would be a bargain at today’s prices. What’s expensive is things that didn’t exist in 1950. You can say that “health care” has gotten more expensive—or you can say that the declining cost of other things has allowed us to pour a lot more resources into exciting new health products that give us both longer and healthier lives.

In Crisis of Abundance, I wrote,

The American middle class can still afford the wonderful health care that was available in 1975–easily. . .as a thought experiment, a return to 1975 health care standards would completely resolve what is commonly described as America’s health care crisis.

You know, that book was written 10 years ago (it came out in 2006), and at the time I said it would have a shelf life of ten years, meaning that I thought that it would still accurately describe the issues for another decade. In fact, it is looking like it will be valid for another ten years. I would say that the majority of popular books on politics and economics expire much more quickly.

Four forces watch: In addition to the New Commanding Heights, McArdle’s essay also touches on the Demographic Divide.

while the college educated class seems to have found a new equilibrium of stable and happy later marriages, marriage is collapsing among the majority who do not have a college degree, leaving millions of children in unstable family situations where fathers are often absent from the home, and their attention and financial resources are divided between multiple children with multiple women.

Other sentences are reminiscent of The Reality of the Real Wage. There, I recycled a bit from my book.

My guess is that if you could find a health insurance policy today that only covered diagnostic procedures and treatments that were available in 1958, the cost of that policy would not be much higher than it was then. Much of the additional spending goes for MRIs and other advanced medical equipment, as well as for health care professionals with more extensive specialization and training than what was available 50 years ago.

I recommend McArdle’s entire essay. Brink Lindsey adds more statistics, such as

In 2011, 87 percent of kids who had at least one parent with a college degree were living with both their parents. For the children of high school dropouts and high school grads, the corresponding figures were 53 and 47 percent, respectively.

Finally, on this same topic, a reviewer (Francis Fukuyama) of an about-to-be-released Robert Putnam book writes,

One of the most sobering graphs in Our Kids shows that while the proportion of young children from college-educated backgrounds living in single-parent families has declined to well under 10 per cent, the number has risen steadily for the working class and now stands at close to 70 per cent.

Pointer from Tyler Cowen.

Differences in College Completion Rates

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Timothy Taylor writes,

It turns out that if are someone from a family in the top-quarter of the income distribution who enters college, you are extremely likely to complete a bachelor’s degree by age 24; if you are in the bottom of the income distribution, you only have about a 22% chance of having a bachelor’s degree by age 24.

Read the whole thing. As he does so well, Taylor manages to locate an interesting report and extract fascinating material from it.

In terms of the Demographic Divide (one of the Four Forces), I think that the high-income college entrants are likely to have several advantages. First, they are more likely to have inherited high IQ and high conscientiousness. Second, their parents are more likely to have had their children after they were married and to have remained married after they had children. Third, the parents are likely to have better skills for identifying and dealing with their children’s needs. Finally, the parents have more financial resources to support the child. The report seems to emphasize only the last of these.

Attention St. Louis

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I will be here on March 11.

The Discussion Club meets at the Racquet Club Ladue. Doors will open at 5:30 and the formal speaker introduction will begin at 6:00 sharp. The presentation plus one or two questions from the audience will finish around 6:45. Afterwards, members are invited to complementary hors d’oeuvres and drinks with the speaker from 7 to 8.

Talking about the four forces.

I don’t use slides, but if I did I would include this comic strip from Frank and Ernest.