Category: Education

Human Capital Accumulation in China and India in 20th Century

By Nitin Kumar Bharti and Li Yang:

Abstract. The education system of a country is instrumental in its long-run development. This paper compares the historical evolution of the education systems in the two largest emerging economies- China and India, between 1900 and 2018. We create a novel time-series data of educational statistics related to enrolment, graduates, teachers and expenditure based on historical statistical reports. China adopted a bottom-up approach in expanding its education system, compared to India’s top-down approach in terms of enrolment. While India had a head-start in modern education, it has gradually been overtaken by China- at Primary education in the 1930’s Middle/Secondary level in the 1970s and Higher/Tertiary level in the 2010s. It resulted in the lower cohort-wise average education and higher education inequality in India since 1907. Vocational education is a central component of the Chinese education system, absorbing half of the students in higher education. In India, the majority of the students pursue traditional degree courses (Bachelors, Masters etc.), with 60% in Humanities courses. Though India is known as the “land of engineers”, China produces a higher share of engineers. We conjecture that the type of human capital in China through engineering and vocational education helped develop its manufacturing sector. Utilizing micro-survey data since the 1980s, we show that education expansion has been an inequality enhancer in India. This is due to both the unequal distribution of educational attainment and higher individual returns to education in India.

Interesting throughout, via Pseudoerasmus.

Higher education is getting cheaper

That is the topic of my latest Bloomberg column, here is one excerpt:

There are a lot of numbers, but here is the comparison I find most impressive: Adjusting for grants, rather than taking sticker prices at face value, the inflation-adjusted tuition cost for an in-state freshman at a four-year public university is $2,480 for this school year. That is a 40% decline from a decade ago…

As might be expected, the trajectory for student debt is down as well. About half of last year’s graduates had no student debt. In 2013, only 40% did. That famous saying from economics — if something cannot go on forever, it will stop — is basically true. Due to changes in the formula, aid for Pell Grants is up, which helps to limit both student debt and the expenses of college.

Is quality going down?  Probably a bit, but with a caveat:

,,,various adjustments kick in to limit the scope of the potential damage. Rather than cutting classes in computer science, a university might decide (as mine did) not to field a football team. Or a school might rely less on full-time professors and more on adjuncts. That is often a negative, but again schools can and do adjust, for instance by paying their adjuncts more and putting more effort into finding and keeping the good ones. A school might also reduce courses that attract few students and put more emphasis on subject areas with high enrollments.

Granted, none of this is ideal. But such adjustments can keep much of the damage at manageable levels. Many schools also are easing off their DEI bureaucracies.

And students will make adjustments of their own. If their classes give them less than what they want, they may turn more to the internet — to online education or, these days, AI. To argue that a large-language model is not as good as a professor is to miss the point. These innovations only have to make up some of the marginal deteriorations of quality.

With apologies to Peter Thiel, I believe U.S. higher education is going to muddle through.

Increasing the Supply of Very High-IQ Workers

I have argued that there are on the order of just 164 thousand very high-IQ workers in the United States. How do we get more? Ian Calaway on the job market from Stanford has an interesting paper arguing that early math mentors can be a force multiplier for students with superior math abilities. Calaway estimates that having a math mentor at a school, someone who runs a math club and organizes entry into top math competitions, increases the number of students earning PhDs and pursing careers as scientists and professors. Not every school has such a math mentor but Calaway estimates (after taking into account underlying abilities, he’s not naive) that over 27 years, math mentors identified 9,092 American Math Competitions students (the cream of the crop) but there were 11,168 missing students of very high ability.

These 11,168 additional students represent the missing exceptional math talents who would have participated in the AMC and been identified as exceptional if they had access to a mentor…these mentors would have increased the number of these students attending selective universities (3,017 students), majoring in STEM (3,465 students), earning PhDs (1,652 students), and pursuing careers as scientists and professors (1,850 students) during this twenty-seven year period.

11,168 missing students of very high ability over 27 years may not sound like much but we are talking about the very top talent level. A footnote illustrates:

Sergey Brin (Google), Mark Zuckerberg (Meta), Peter Thiel (PayPal), and Sam Altman (OpenAI) were all top AMC scorers (Committee on the American Mathematics
Competitions, 1980–2023)

High-IQ individuals don’t simply vanish without mentorship; they likely still have decent careers. However, even if you are skeptical about the social value of earning a PhD, the number of mentored individuals who go on to start firms or earn patents appears substantial. Just as athletic talent can wither without guidance, it seems that intellectual talent may also be underutilized without proper mentorship, with many high-IQ individuals failing to reach their full potential.

Emergent Ventures winners, 38th cohort

Sandro Luna, Austin, easier ways of getting blood pressure readings.

Divyan Bavan, Ontario, 17, machine learning for biology.

Michael Domarkas, 17, Surrey, UK, general career support for the biosciences.

Saras Agrawal, 17, Alberta, AI to monitor heart attack risk.

Charmaine Lee, NYC, music composition and performance.

Jodi Ettenberg, Ottawa, podcast on how to deal with adversity.

Jiya Singhal, Stavanger, Norway, high school, AI to detect skin cancer.

Janine Leger, Texas, for building full-time communities around the globe.

Rishi Mehta, Toronto, a device to limit falls of the elderly.

Ivan Lin, Sydney, 16, travel grant to the Bay Area.

Fearghal Desmond and Ryan Morrissey, Cork and Limerick, Induct, and a travel grant to SF.

Filip Cerny, 18, Prague,  general career support, building out entrepreneurship in Czechia.

James Vitali, London, to write a book about the political future of the UK, general career support.

Harry Law, Cambridge, UK, historian of science, to write a history of AI.

Joshua Muthu, Warwick, UK, economic models of cities and building.

Kyla Scanlon, Venice, CA, to produce content on economics, including a new documentary, and also for travel support.

Pieter Garicano, WDC and Europe, general career support, writing on Europe, progress, and technology.

Ukraine cohort:

Nazar Drugov, Cambridge, MA, and MIT, and Ukraine, 17, to make Khanmigo fully functional in Ukrainian.

Aleksandra Peeva, Berlin, to study Russian sanctions.

Mariia Marinichenko, physics and math instruction in Ukrainian for Ukrainians.

Anastasiya Dobrobabenko, STEM education for a school near Kyiv.

The Immigration Rap Battle

From the team that brought you Hayek v. Keynes we have the immigration rap battle featuring “George Borjas,” “Garett Jones” and “Stephen Miller” on team build the wall and “Bryan Caplan” and “Alex Nowrasteh” on open the border. I wouldn’t say the actors (AI?), look very much like their real world counterparts but much respect to the author of the rap lyrics who has brilliantly captured the essence of the ideas economically and thematically.

The evolution of nepotism in academia, 1088-1800

We have constructed a comprehensive database that traces the publications of father–son pairs in the premodern academic realm and examined the contribution of inherited human capital versus nepotism to occupational persistence. We find that human capital was strongly transmitted from parents to children and that nepotism declined when the misallocation of talent across professions incurred greater social costs. Specifically, nepotism was less common in fields experiencing rapid changes in the knowledge frontier, such as the sciences and within Protestant institutions. Most notably, nepotism sharply declined during the Scientific Revolution and the Enlightenment, when departures from meritocracy arguably became both increasingly inefficient and socially intolerable.

That is from a new paper by David de la CroixMarc Goñi.  Via the excellent Kevin Lewis. 

Principles of Economics Textbooks and the Market for Ice Cream

Rey Hernández-Julián and Frank Limehouse writing in the Journal of Economics Teaching write that very few principles of economics textbooks deal with modern information and digital tech industries:

The main takeaways of our review are highlighted by two stand-alone textboxes found in Mankiw’s (2023) textbook. This textbook has been regarded as one of the most dominant players in the principles of economics textbook market for over 20 years. In the introductory chapter of the 10th Edition (2023), “Ten Principles of Economics” there is a stand-alone textbox with the Netflix logo with the following caption: “Many movie streaming services set the marginal cost of a movie equal to zero”. However, there is no further explanation of this statement in the chapter and no presentation of the concept of zero marginal cost pricing in the remainder of the entire textbook. In Chapter 2 (“Thinking Like an Economist”), there is an In the News article from the New York Times, “Why Tech Companies Hire Economists”, but very little coverage in the text on how to apply microeconomic concepts to the tech industry. These two discussions of the tech industry in Mankiw’s text exemplify many of our findings from other texts….updated examples from the modern economy seem to be afterthoughts and detached from the central discussion of the text.

…There are some notable exceptions. The most significant coverage of these questions is in Chapter 16 of Cowen and Tabarrok’s Modern Principles of Microeconomics, 5th edition (2021). In this chapter, the authors discuss platform service providers, such as Facebook, Amazon, Google, Visa, and Uber, and the role they play in competing “for the market,” instead of “in the market.” They also discuss why the prevailing product is not necessarily the best one, how music is a network good, and why these platform services may give away goods for ‘free’.

I would also point out that our example of a constant-cost industry (flat long-run supply curve) is domain name registration! As we write in Modern Principles:

Now consider what happens when the demand for domain names increases. In 2005, there were more than 60 million domain names. Just one year later, as the Internet exploded in popularity, there were more than 100 million domain names. If the demand for oil nearly doubled, the price of oil would rise dramatically, but despite nearly doubling in size, the price of registering a domain name did not increase…the expansion of old firms and the entry of new firms quickly pushed the price back down to average cost.

In short, it’s called Modern Principles for a reason! Tyler and I are committed to keeping up with the times and not just adding the occasional box and resting on our laurels.

See Hernández-Julián and Limehouse for some further examples of how to introduce modern industries into principles of economics.

What should I ask Paula Byrne?

From Wikipedia:

Paula Jayne Byrne, Lady Bate…is a British biographer, novelist, and literary critic.

Byrne has a PhD in English literature from the University of Liverpool, where she also studied for her MA, having completed a BA in English and Theology at West Sussex Institute of Higher Education (now Chichester University).

Byrne is the founder and chief executive of a small charitable foundation, ReLit: The Bibliotherapy Foundation, dedicated to the promotion of literature as a complementary therapy in the toolkit of medical practitioners dealing with stress, anxiety and other mental health conditions. She is also a practicing psychotherapist, specializing in couples and family counseling.

Byrne, who is from a large working-class Roman Catholic family in Birkenhead, is married to Sir Jonathan BateShakespeare scholar and former Provost of Worcester College, Oxford

Her books cover Jane Austen, Mary Robinson, Evelyn Waugh, Barbara Pym, JFK’s sister, two novels, and her latest is a study of Thomas Hardy’s women, both in his life and in his fiction, namely Hardy’s Women: Mother, Sister, Wives, Muses.  Here is her home page.  Here is Paula on Twitter.

Science and politics podcast

From the Institute for Progress, here is the link, the participants were Caleb Watney, Dylan Matthews, Alexander Berger, and myself.  Excerpt:

Tyler Cowen: I would stress just how decentralized science funding is in the United States. The public universities are run at the state level. We have tax incentives for donations where you have to give to a nonprofit, but there’s otherwise very little control over what counts as a viable nonprofit.

One specific issue that I think has become quite large is how much we run our universities through an overhead system. On federal grants and many other kinds of grants, an overhead is charged. The overhead rates are very high, and well above what the actual marginal overhead costs.

You might think that’s a crazy system, and in some ways it is crazy. It means there’s intense pressure on professors to bring in contracts, regardless of the quality of the work. That’s clearly a major negative. Everyone complains about this.

But the hidden upside is that when universities fund themselves through overhead, there’s a kind of indirect free speech privilege because they can spend the overhead how they want. Now, I actually think they are violating the implicit social contract right now by spending the overhead poorly. But for a long while, this was why our system worked well. You had very indirect federal appropriations: some parts of which went to science, other parts of which went to education. It was done on a free speech basis.

But like many good systems, it doesn’t last forever. It gets abused. If we try to clean up the mess — which now in my view clearly is a mess — well, I’m afraid we’ll get a system where Congress or someone else is trying to dictate all the time how the funds actually should be allocated.

That’s a question I’ve thought through a good amount: how or whether we should fix the overhead system? I feel we’ve somehow painted ourselves into a corner where there is no good political way out in any direction. But I think you’ll find case by case that the specifics are really going to matter.

Dylan Matthews: Let’s get into some of the specifics. Do you have an example of the overhead system breaking down that is motivating for you here?

Tyler Cowen: Well, universities are spending more and more of their surplus on staff and facilities — on ends that even if you think they’re defensible in some deep sense like “Oh, we need this building,” it’s about the university. It’s about what leads to long run donations, but it’s seen as a violation of public trust.

The money is neither being spent on possibly useful research, nor educating students. The backlash against universities is huge, most of all in Florida, Texas, and North Carolina. It seems to me that where we are at isn’t stable. How we fund science through universities is, in some ways, collapsing in bad ways. The complaints are often justified, but odds are that we’ll end up with something worse.

Recommended, interesting throughout.

What predicts success in science?

How does a person’s childhood socioeconomic status (SES) influence their chances to participate and succeed in science? To investigate this question, we use machine-learning methods to link scientists in a comprehensive biographical dictionary, the American Men of Science (1921), with their childhood home in the US Census and with publications. First, we show that children from low-SES homes were already severely underrepresented in the early 1900s. Second, we find that SES influences peer recognition, even conditional on participation: Scientists from high-SES families have 38% higher odds of becoming stars, controlling for age, publications, and disciplines. Using live-in servants as an alternative measure for SES confirms the strong link between childhood SES and becoming a star. Applying text analysis to assign scientists to disciplines, we find that mathematics is the only discipline in which SES influences stardom through the number and the quality of a scientist’s publications. Using detailed data on job titles to distinguish academic from industry scientists, we find that industry scientists have lower odds of being stars. Controlling for industry employment further strengthens the link between childhood SES and stardom. Elite undergraduate degrees explain more of the correlation between SES and stardom than any other control. At the same time, controls for birth order, family size, foreign-born parents, maternal education, patents, and connections with existing stars leave estimates unchanged, highlighting the importance of SES.

That is from a new NBER working paper by Anna Airoldi and Petra Moser.

The Declining Relative Quality of the Child Care Workforce

Although it is widely acknowledged that high-skilled teachers are integral to service quality and young children’s well-being in child care settings, little is known about the qualifications and skills of the child care workforce. This paper combines data from multiple sources to provide a comprehensive assessment of the quality of individuals employed in the child care sector. I find that today’s workforce is relatively low-skilled: child care workers have less schooling than those in other occupations, they score substantially lower on tests of cognitive ability, and they are among the lowest-paid individuals in the economy. I also show that the relative quality of the child care workforce is declining, in part because higher-skilled individuals increasingly find the child care sector less attractive than other occupations. Furthermore, I provide evidence that at least three other factors may be associated with the decline in worker quality. First, the recent proliferation of community college programs offering child care-related certificates and degrees may divert students away from attending four-year schools. Second, those majoring in child care-related fields are negatively selected for their cognitive skills, thereby decreasing the quality of the child care labor pool. Third, I show that the increased availability of outside employment options for high-skilled women had a detrimental effect on the quality of the child care workforce.

That is from a new paper by Chris M. Herbst.  Via the excellent Kevin Lewis.

My Conversation with Musa al-Gharbi

I am a big fan of Musa’s work, most of all his new book We Have Never Been Woke: The Cultural Contradictions of a New Elite.  As for the podcast, here is the video, audio, and transcript.  Here is the episode summary:

Tyler and Musa explore the rise and fall of the “Great Awokening” and more, including how elite overproduction fuels social movements, why wokeness tends to fizzle out, whether future waves of wokeness will ratchet up in intensity, why neuroticism seems to be higher on the political Left, how a great awokening would manifest in a Muslim society, Black Muslims and the Nation of Islam, why Musa left Catholicism, who the greatest sociologist of Islam is, Muslim immigration and assimilation in Europe, and more.

Excerpt:

COWEN: Let me give you an alternate theory of the Great Awokening, and tell me what’s wrong with it. It’s not really my view, but I hear it a lot.

So on the Left, there’s some long-term investment in teaching in America’s top universities. You produce a lot of troops who could become journalists, and they’re mostly left-leaning. Then 2011, 2012 — there’s something about the interaction of social media and, say, The New York Times and other major outlets, where all of a sudden they have a much bigger incentive to have a lot of articles about race, gender, Black Lives Matter, whatever. When those two things come together, wokeness takes off based on a background in Christianity and growing feminization of society.

By the time you get to something like 2021, enough of mainstream media has broken down that it’s simply social media out there going crazy. That just gives us a lot of diversity of bizarre views rather than just sheer wokeness — and besides, Elon is owning Twitter, so wokeness ends.

What’s wrong with that account?

AL-GHARBI: For one, I do think that some of the factors that you identified are important for contextualizing the current moment. For instance, a lot of the symbolic professions, like law and consulting, academia, journalism — they are being feminized. I do talk a bit in the book about how this matters for understanding the dynamics in a lot of these institutions. Not just over the last 10 years, but over the last several decades, in part because women and men tend to engage in very different forms of status-seeking and competition and things like that. So that does matter.

Things like social media obviously do change the way interactions play out. But you can see, actually, that things like social media or changes in the media landscape after 2010 — one limitation for using those kinds of explanations to explain the current moment is that it becomes hard, then, to understand how or why it was the case that . . .

There were three previous episodes like this, one in the 1920s through the early ’30s, one in the mid-1960s to the late ’70s, and then one in the late ’80s through early ’90s. In all cases where we didn’t have social media, where the structure of media enterprises was importantly different than it is today, and before you had Gen Z “kids these days” with their idiosyncratic attitudes, or before a lot of these professions were as feminized as they were today.

I think all of those factors you said actually do matter, and they matter in the sense — because each of these episodes, there’s so much in common, an insane amount. When you read the book and I walk through some of these — I think a lot of readers will be troubled, maybe, by how similar these episodes are. But they’re also importantly different. They don’t play out identically. They are importantly different: The role that symbolic capitalists occupy in society changed immensely over the last century. The constitution of these fields has changed immensely. There are a lot more women; there are a lot more nonwhite people in these professions than there were in the past, and so on and so forth.

All of those factors you described: I think they actually do matter, especially for understanding the ways in which this period of awokening might differ from previous episodes, but I don’t think they explain why awokenings happen at all.

COWEN: If “woke” recurs, do you think there’s a ratchet effect where it comes back bigger and stronger each time, a bit like the destructiveness of war? Or is it more of a random walk? Like, the next wave of woke in 37 years might be half as strong as the one we just had. What’s your model?

AL-GHARBI: I think it’s random; that depends a little bit on . . .

What I argue in the book is that the — for instance, when we look at the last period of awokening in the late ’80s and early ’90s, it was much less — that was the last time we had these struggles over what they call political correctness, or the PC culture, which we call wokeness today. As I argue in the book, it didn’t last as long, that awokening. It was shorter than most of the others, actually. Shorter than the one in the ’60s, shorter than the one after 2010. It was a little shorter, and it also wasn’t quite as dramatic.

I think there are these kind of contextual factors that significantly inform how severe it is or how long it lasts, how long it’s able to sustain itself or how long it is until the frustrated elites get — enough of them get satisfied that they disengage. My guess is that it’s more of a random walk, but I’m open to persuasion.

Definitely interesting.

Letters of recommendation

We analyze 6,400 letters of recommendation for more than 2,200 economics and finance Ph.D. graduates from 2018 to 2021. Letter text varies significantly by field of interest, with significantly less positive and shorter letters for Macroeconomics and Finance candidates. Letters for female and Black or Hispanic job candidates are weaker in some dimensions, while letters for Asian candidates are notably less positive overall. We introduce a new measure of letter quality capturing candidates that are recommended to “top” departments. Female, Asian, and Black or Hispanic candidates are all less likely to be recommended to top academic departments, even after controlling for other letter characteristics. Finally, we examine early career outcomes and find that letter characteristics, especially a “top” recommendation have meaningful effects on initial job placements and journal publications.

That is from a new paper by Beverly Hirtle and Anna Kovner.  Via the excellent Kevin Lewis.

The Economic Way of Thinking in a Pandemic

During the pandemic, economists often found themselves at odds with politicians, physicians, epidemiologists and others. Some politicians, for example, were worried that the pharma companies might engage in profiteering while economists worried that the pharma companies were not nearly profitable enough. Physicians focused on maximizing the health of patients while economists focused on maximizing the health of society–during the pandemic these were not the same and this led to disputes over testing, first doses first and human challenge trials. During the pandemic economists were often accused of not staying in their lane. But what is the economist’s lane?

In this talk, I discuss the economic way of thinking and how it conflicted with other ways of thinking. My talk pairs well with my recent paper also titled The Economic Way of Thinking in a Pandemic.

My excellent Conversation with Tom Tugendhat

Here is the audio, video, and transcript.  Here is the episode summary:

Tom Tugendhat has served as a Member of Parliament since 2015, holding roles such as Security Minister and chair of the Foreign Affairs Select Committee. Before entering Parliament, Tom served in in Iraq and Afghanistan. He also worked for the Foreign Office, helped establish the National Security Council of Afghanistan, and served as military assistant and principal adviser to the Chief of the Defense Staff.

Tyler and Tom examine the evolving landscape of governance and leadership in the UK today, touching on the challenges of managing London under the UK’s centralized system, why England remains economically unbalanced, his most controversial view on London’s architecture, whether YIMBYism in England can succeed, the unique politics and history of Kent, whether the system of private schools needs reform, his pick for the greatest unselected prime minister, whether Brexit revealed a defect in the parliamentary system, whether the House of Lords should be abolished, why the British monarchy continues to captivate the world, devolution in Scotland and Northern Ireland, how learning Arabic in Yemen affected his life trajectory, his read on the Middle East and Russia, the Tom Tugendhat production function, his pitch for why a talented young person should work in the British Civil Service, and more.

And here is an excerpt:

COWEN: Okay. First question, what is your favorite walk around London, and what does it show about the city that outsiders might not understand?

TUGENDHAT: Oh, my favorite walk is down the river. A lot of people walk down the river. One of the best things about walking down the river in London is, first of all, it shows two things. One, that London is actually an incredibly private place. You can be completely on your own in the center of one of the biggest cities in the world within seconds, just by walking down the river. Very often, even in the middle of the day, there’s nobody there. You walk past things that are just extraordinary. You walk past a customs house. It’s not used anymore, but it was the customs house for 300, 400, 500 years. You walk past, obviously, the Tower of London. You walk past Tower Bridge. You walk past many things like that.

Actually, you’re walking past a lot of modern London as well, and you see the reality of London, which is — the truth is, London isn’t a single city. It’s many, many different villages, all cobbled together in various different ways. I think outsiders miss the fact that there’s a real intimacy to London that you miss if all you’re doing is you’re going on the Tube, or if you’re going on the bus. If you walk down that river, you see a very, very different kind of London. You see real communities and real smaller communities.

And:

COWEN: Can the British system of government in its current parliamentary form — how well can that work without broadly liberal individualistic foundations in public opinion?

TUGENDHAT: I think it works extremely well at ensuring that truly liberal foundations are maintained. I mean that not in the American sense; I mean in a genuine, the old liberal tradition that emerges from the UK in the 1700s, 1800s, where freedom of thought, freedom of assembly, the right to own property, and all those principles that then became embedded in various different constitutions around the world, including your own. I think it does very well at doing that because it forces you, our system forces you, into partnership. There are 650 people who you have to work with in some way in Parliament over the next four or five years.

And there’s four of us currently going for leadership at the Conservative Party. There’s one reason why, despite the fact that we’re competing almost in a US primary system, the way in which we are dealing with each other is very different, is because we’re all going to have to work together for the next four years. Whoever wins is going to have to work with the other three, and the idea that you can simply ignore each other isn’t true. There’s only 121 of us Conservative MPs in Parliament, and what this system forces on us is the need to deal with each other in a way that you have to deal with somebody if you’re going to deal with them tomorrow. I think that’s one of the reasons why the British political system has endured because it forces you to remember that there’s a long-term interest, not an immediate one, not just a short-term one.

Recommended, highly intelligent throughout, including on China, Russia, and Yemen.