Average vs. Marginal
By Arnold Kling
In the Milken Institute Review, Kevin Lang writes,
Is teenage motherhood one of the means by which poverty is passed from generation to generation, or are both teenage motherhood and adult poverty consequences of the same childhood disadvantages? There are no conclusive answers. But there are better answers and worse ones, and the better answers point in the same direction: Preventing a teenager who would otherwise give birth from becoming pregnant and having a child has at most a very small beneficial effect on her future.
You ask, what about the child?
When we use sociodemographic variables to determine who is similar, we find that the differences in outcomes between children with teenage mothers and children with older mothers are substantially smaller than appears to be the case based on simple averages. In general, the results still suggest that children with teenage mothers suffer some disadvantages compared to other similar children.
Richard Posner wonders whether Gary Becker has also confused average and marginal effects when talking about the value of education.
Becker marshals convincing evidence that people who have more education have on average higher earnings and that the spread has been growing. But it is a bit of a leap to conclude that there are high (and increasing) returns to education…Suppose what are increasing are not the returns to education but the returns to intelligence, and suppose that people with high IQs both enjoy education more than other people do and are more likely to be admitted to college…
Most studies find that education has a substantial effect on earnings independent of native ability, and the convergence is impressive. However, the studies are convincing mainly about the benefits of precollege education.
To me, the moral of the story is that there is no single crowbar you can use to pry open the problem of poverty. You push on more education…and almost nothing happens. You push on less teenage pregancy…and almost nothing happens. Either there is something more fundamental at work, or you need multiple crowbars.