The Race, and a model composition for writing instruction

The Race Between Education and Technology is getting attention, which is a relief. I was worried the book was going to drop like a stone to the bottom of the pond, because, politically speaking, it is betwixt and between. Goldin and Katz reject the liberal view that the policies of Ronald Reagan and Margaret Thatcher were and are (primarily) responsible for rising inequality, while embracing the liberal view that education lowers inequality and that nearly everyone can go to college.

This is why I think of the book as revolutionary. I'm not sure it's right to call the book paradigm-shifting, but it's close. I was blown away by the opening chapters. (I stalled midway through the book, when I veered off to read the Book of Genesis, the first 12 chapters of The Odyssey, and Guns, Germs, and Steel. Now that that's over with, I'll be going back to The Race.)

[pause]

ah-hah!

Tyler Cowan says The Race is "the most important book on modern U.S. inequality to date," so I am vindicated. I will stick with my view that The Race is....the most important book on modern U.S. inequality to date.

That works.

Thus far I've seen two solid "con" reactions, one from Arnold Kling and the other from George Leef (have yet to read Leef's closely), but for the moment, I want to post a link to a fantastically good article on The Race: Supply Side Education by David Glenn. Glenn's piece is so good it could be taught in journalism courses. Precisely because The Race is so expectation-defying, it is not an easy book to write about, and he nailed it:

In a 1996 television interview that was partly shot in an elementary-school computer lab, Laura D'Andrea Tyson, who was then chair of Bill Clinton's Council of Economic Advisers, tried to explain rising inequality in America.

"In the early 1970s," Tyson said, "a college graduate earned something like 45 percent more than a high-school graduate. Today a college graduate earns 84 percent more than a high-school graduate. What's happened is the technology has increased the demands for higher skills."

Computers did it. Among both Democrats and Republicans, that is one of the most frequently cited explanations for the post-1975 spike in American wage inequality. As the story goes, information technology has transformed almost every job, increasing employers' thirst for workers with advanced skills and college credentials. In the lingo of economists, this is "skills-biased technological change."

But that story is at best a half-truth, according to a new book by two professors of economics at Harvard University. The authors, Claudia Goldin and Lawrence F. Katz, don't deny that American employers' demand for skills has been rising. But they say that that demand has been rising at a roughly constant rate for the last century. Contrary to popular belief, they argue, the personal computer and the Internet have not caused a sharp leap in employers' demand for skill.

So if demand doesn't explain the recent rise in inequality, what does? Look to the supply side of the equation, Goldin and Katz say: America simply isn't educating its citizens the way it used to.

In The Race Between Education and Technology (Belknap/Harvard University Press), Goldin and Katz emphasize that plenty of skills-biased technological change occurred long before anyone had heard of Bill Gates. The mass introduction of electric power in the 1910s, for example, increased the complexity of many jobs and increased employers' demand for skill. [for me, their analysis of the returns to education for blue collar workers early in the century is one of the most fascinating parts of the book -- will get passages posted soon]

But that rising demand, in Goldin and Katz's account, was outpaced during most of the 20th century by a soaring supply of educated workers. Between 1915 and 1950, the national high-school-graduation rate rose from roughly 15 percent to roughly 60 percent, and college attendance also spiked. As their numbers ballooned, educated workers could no longer command so much more in wages. Between 1915 and 1950, the college wage premium (the amount by which college graduates outearn people who hold only a high-school diploma) and the high-school wage premium (the amount by which high-school graduates out-earn high-school dropouts) both fell sharply. The postwar period famously saw a broad prosperity, with wages growing for people of all educational levels.

Then, around 1970, something changed. High-school graduation rates flattened near 70 percent, where they remain. College attendance continued to grow, but the college-completion rate — that is, the percentage of a population cohort that earns a bachelor's degree — stagnated for more than a decade.

[snip]

Demonstrating that the demand for skill has been roughly constant for a century is a tall order, and it's the element of Goldin and Katz's book that is most likely to draw skepticism from their colleagues. [so far, I haven't seen this] Their argument draws partly on data from the Iowa state census, which was one of the few during the first half of the century to collect detailed statistics about educational attainment.... [Barry Garelick used data from Iowa in his analysis of traditional math education, too]

Goldin and Katz concede that institutional features — trade policies, labor laws, and so on — have also helped to shape American inequality over the last century. But as a rough cut, they say, the simple supply and demand of skilled labor — the race between education and technology — tells most of the story.

"Education has not kept pace," says Katz. "In the early 20th century, we created almost universal access to high school. We have not done the same with college, which essentially we would need to have done to have kept this sort of widespread prosperity present."

One of the book's central questions is this: Given that the wage premiums for education have grown so strongly during the last 35 years, why haven't more young people responded by earning degrees?

One answer, Goldin and Katz say, is that the short-term barriers to college are steeper than they once were. "Among the college-ready," Katz says, "we need to make sure that they have the financial support to get into college. [emphasis added] We do an OK job with that, but we could do better. More than half of undergraduates work more than 20 hours a week. The loan burdens are tremendous. Tuition has been rising. It's clear that those things are taking a toll."

A more difficult answer, Katz says, has to do with the weaknesses of American public-school education. "There are a myriad of possible reasons for that," he says. "Some people say it's all about resources. Some people say we need to improve incentives for parents and teachers. Clearly, over the long run, early-childhood intervention programs may be very important. [clearly?] We need a continuum of investments. But per dollar, we're not doing so well in the K-12 system in the U.S. these days."

In a working paper released earlier this year, three Yale University economists — Joseph G. Altonji, Prashant Bharadwaj, and Fabian Lange — suggested that the slowdown in American educational attainment and skill development might be even worse than it appears.

[snip]

Goldin and Katz, meanwhile, are continuing to develop their model and are scrutinizing the recent growth of wage inequality within the group of people who hold college degrees. "There has been much more growth of inequality among college graduates than among noncollege workers," Katz says. Only some people, he says, are coming out of college with the high-level abstract-reasoning skills that fully complement the new information technologies and command high salaries. Workers with "midlevel" skills, by contrast, are more likely to see their tasks simply replaced by computers.

Does that mean, then, that too many people are going to college, and that the rewards of a B.A. are overrated, as some commentators have recently suggested?

"That's absolutely wrong," Katz says. "The reason we know that is the following: It's true that there's growing inequality among college graduates. But there's shrinking inequality among noncollege workers. The market is very bad for people with only a high-school diploma — they're not doing much better than people who dropped out in the eighth grade. So the return [on investment] to college is still very high. Even if you wind up in the bottom half of the college group, you're still much better off than in the top half of the high-school group."

If you're at all interested in this subject, it's worth reading the whole article -- and anyone who's teaching high school or college-level composition might want to consider having students read and analyze Green's work, too. (I would pay particular attention to Green's ability to assess and speak to the reader's assumptions.)

I have to get to the city, so will knock off for now.

Will be back with thoughts on Kling, Leef, and David Brooks' column on the book later.

Steve Levitt summarizes The Race in 2 sentences
Jimmy graduates

The anemic response of skill investment to skill premium growth
The declining American high school graduation rate: Evidence, sources, and consequences
Pushy parents raise more successful kids

The Race Between Education and Technology book review
The Race Between Ed & Tech: excerpt & TOC & SAT scores & public loss of confidence in the schools
The Race Between Ed & Tech: the Great Compression
the Great Compression, part 2
ED in '08: America's schools
comments on Knowledge Schools
the future
the stick kids from mud island
educated workers and technology diffusion
declining value of college degree
Goldin, Katz and fans
best article thus far: Chronicle of Higher Education on The Race
Tyler Cowan on The Race (NY Times)
happiness inequality down...
an example of lagging technology diffusion in the U.S.
the Times reviews The Race, finally
IQ, college, and 2008 election
Bloomington High School & "path dependency"
the election debate that should have been