Economics of Education Over the Virtual Lunchtable
I haven’t had a joint lunch with Robin Hanson and Tyler Cowen for two weeks, but we’re having a substitute meal (minus food) in the MR comments section.
Income distribution thus depends on the balance between technological progress and access to college and postgraduate study. The problem isn’t so much capitalism as it is that American lower education does not prepare enough people to receive gains from American higher education.
Bottlenecks currently keep more individuals from improving their education…
What, not even a passing mention of the signaling theory of education? These private gains to education need not correspond to much net social gain. Tyler knows better, but as with his articles on health care, Tyler clearly expects that his NYT audience would prefer not to hear about such “cynical” considerations.
Robin, the studies cited in my post attempt to control for signaling and estimate the returns to education holding type constant. Their “natural experiments” are pretty good, albeit not perfect. Note, however, that these are marginal returns for people on the cusp of going to college. Signaling still might be more important inframarginally.
Only a tiny number of studies control for signaling. Many DO try to control for ability bias, but that’s a totally distinct issue, as I explain here: