Arnold Kling and John Merrifield review The Race Between Education and Technology in the latest edition of Econ Journal Watch, and come to pretty much the same conclusion as Rich did in his review. Basically, that it is a good book that makes great contributions, but is flawed in some respects.
the basic framework—captured in the statement that technology is skill-biased—is a great contribution… however, in several respects they over-reach their data in an attempt to support interventionist policy recommendations…
the narrative, in a nutshell, holds that America… did a great job of educating the workforce so as to keep up with technology, and hence achieve a broad-based sharing of the fruits of economic and technological development. But after 1970 or so, education began to “lose the race” with technology, such that skill advancement no longer occurred in the same broad-based way. Thus, the last thirty years saw increasing inequality. The book ends with advice that would seem to follow from the book’s theoretical structure: rejuvenate education so that it again keeps up with technology. in particular, GK make a pitch for more college for more people…
the book’s basic theoretical structure makes sense. Some of the trends in inequality over the past several decades might well be the result of skills not keeping up with technology. one of the book’s greatest contributions, in our view, may be to elevate this explanation above other explanations [such as immigration, globalization, unionization, and minimum wages]…
But ideological motivation seems, in this case, to have led to distortions in the historical narrative, misunderstanding of the recent decades, dubious policy suggestions, and misplaced hope of “keeping up” with technology…
Additional questions about GK’s data interpretation arise when we divide the 1980-2005 period into two sub-periods. From 1980-1990, productivity growth was 1.78 percent, a substantial slowdown that might be consistent with the slowdown in human capital formation. However, from 1990-2005, productivity growth averaged 2.42 percent, which represents a substantial rise. Given that educational attainment did not accelerate from the first period to the second, the relationship between educational attainment and overall productivity is not nearly as stable as GK report on the basis of aggregating 1980-2005 into a single time period. The relationship between schooling and economic performance is not as simple and straight-forward as GK portray it to be…
To show a slowdown in college graduation, one could use the percentage change in the college-graduate rate as a measure of the increase in supply (rather than the growth in percentage points)…
The period from 1939 to 1970 represents a great transformation from the local community-based public school to the great bureaucratic system… Goldin and Katz make no mention… Thus, GK’s historical overview is suspect. Besides neglecting the institutional transformations, it does not include an assessment of education performance…
In our view, the evidence cited by GK to suggest that more current high school graduates could benefit from college is rather flimsy, and even more so in light of other evidence. For example, James Heckman (2008)…
In a book devoted to analyzing price signals and incentives, GK fail to note the K-12 system’s almost total lack of price signals, and that misaligned incentives and sharply sagging productivity exist system-wide (Hoxby, 2004)…
there is no real engagement of the “critics,”…
A reader of GK could easily walk away with the impression that much of our economic growth over the past hundred years was due to government intervention in education, and that further intervention could yield great results…
The sweeping nature of GK’s exhortations for new initiatives stands in sharp contrast to the dearth of quantitative evidence that their list of recommended policies would achieve much…
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