The College Boost: Grads Still Outearn Nongrads | St. Louis Fed

This is Part I of a three-part series from the Fed. A little more cheery than Part II, which I posted yesterday. I can't wait for Part III to see their solutions.

On average, families headed by someone with a four-year college degree have 69 percent more income and 201 percent more wealth than families without a degree. The gaps between nongrads and those with a postgraduate degree are even larger.

I fear they are going to bang the drums for equal funding for all school districts nationwide. It's all these socialists and Marxists know. They fail to realize and refuse to accept that even if you do that -- and there will be unintended/unforeseen consequences to doing that -- the race will still go to the swiftest and the fight to the strongest. That's the way to bet. 

from the St. Louis Fed:

https://www.stlouisfed.org/on-the-economy/2018/july/college-boost-grads-outearn-nongrads

The College Boost: Grads Still Outearn Nongrads

Monday, July 16, 2018

By William Emmons, Lead Economist; Ana Hernández Kent, Policy Analyst; and Lowell Ricketts, Lead Analyst, Center for Household Financial Stability

This is the first post in a series on the financial returns of college degrees.

A college degree has long been associated with a laundry list of positive outcomes:

• Higher income and wealth
• Better health
• A higher likelihood of being a homeowner
• A higher likelihood of being partnered (married or cohabitating)
• A lower risk of falling behind on loan payments

In response, more and more Americans are pursuing—and earning—a bachelor’s degree. In 1989, about 23 percent of families were headed by someone with a four-year college degree or higher. By 2016, the share had reached 34 percent.

More individuals are continuing their schooling beyond the traditional four-year degree as well. Families headed by someone with a postgraduate degree (such as a master’s degree or Ph.D.) rose from almost 9 percent of all families in 1989 to about 13 percent in 2016.

This remarkable surge in highly educated individuals begs the question: How have the financial returns (expected earnings and wealth) of college degrees fared over time?

The Average Financial Returns to a College Degree

Previous work by our Center for Household Financial Stability has long corroborated the traditional wisdom that a college degree is associated with higher expected earnings and wealth.1 For this analysis, we typically used the Survey of Consumer Finances, often considered the gold standard of data on household balance sheets (asset, debt and income).

When evaluating the financial payoff to a college education, it is useful to ask: How much additional income and wealth does a college-educated family have beyond that of a family that doesn’t hold a college degree?

Income Differences

Pooling all available data (47,776 families), we found that the average family with a four-year degree (grads) earned approximately 69 percent more than the average family without a degree (nongrads). The average family with a postgraduate degree (postgrads) earned twice as much as their nongrad counterpart. Importantly, these estimates controlled for the age of the family, so we were comparing outcomes at similar stages of life.

Wealth Differences

What about wealth? College graduates—both grads and postgrads—accumulated much higher amounts of wealth over their lifetime than nongrads. On average, grad families accumulated 201 percent more, while postgrad families accumulated 242 percent more than their nongrad peers.

These boosts are remarkable, and it’s clear why going to college is such an imperative for individuals and families across the U.S. However, these average returns mask a considerably wide range of outcomes. How do these outcomes vary when considering the race and ethnicity as well as birth decade of these families? That will be the focus of the next post in this series.

Notes and References

1 For example, see Emmons, William R.; and Noeth, Bryan J. “Education and Wealth.” The Demographics of Wealth, Essay No. 2, May 2015.

Additional Resources

• Center for Household Financial Stability
• The Demographics of Wealth: Education and Wealth
• On the Economy: Income and Wealth Gaps: College Grads vs. Nongrads

Genetic disorder knocks out prejudice | Psychology Today

This leaves us all with somewhat of a societal dilemma; to be prejudice free, but perhaps an over-abundance of faith/acceptance in total strangers.

That would be a tough sell for parents of children.

Sure kid, that person offering a lollipop if you get in his car probably has your best interests at heart. It's tough being a parent these days. I believe we refer to this in economics as a trade-off.

from Psychology Today:
Genetic disorder knocks out prejudice | Psychology Today:

Genetic disorder knocks out prejudice.

Posted Apr 28, 2010

To someone with Williams syndrome, every face looks like a friend - even snarling, angry faces that signal most people to steer clear. Williams is a rare genetic disorder, whose most striking feature is a deficit in social fear. New research suggests that Williams may also confer a strange "deficit" in prejudice.

Andreia Santos and colleagues tested 20 children with Williams between the ages of 7-16, and 20 children without Williams of the same age range (presumably they were all White, though the article does not specify). The test was simple, showing pairs of people side by side. Half of the pairs differed by gender, the other half by race. For the test of racial prejudice, the children were told simple stories that included good or bad traits, like kind, pretty, smart, and bad, ugly, and stupid. Then they were asked to pick which person in the pair the story was about. The children without Williams showed strong evidence of racial bias, selecting the White person most of the time for good traits, and the Black person most of the time for bad traits. But the children with Williams did not show any evidence of bias. They picked the White and Black characters at the same rate as chance.

If this were the only comparison the researchers made it would be tempting to think that the Williams children just didn't understand the test. After all, people with Williams syndrome typically have some cognitive disabilities. But the researchers also did a gender stereotyping version of the test. It worked the same as the race test, but included stereotypical sex roles instead of good and bad traits. Williams children had no trouble guessing that the house cleaner was probably the woman, and the mechanic was probably the man, and they did so at the same rate as the control children. They understood the test, and they showed the gender stereotypes that are typical of children their age.

So, what should we make of this lack of racial bias? First, the thing we should most definitely NOT conclude is that there is a "gene for racism," or that people are "hard wired" for anything of the sort. We know from other research that although very young infants can distinguish between men and women, it takes a few years of development before they can even tell the difference between people of different races. They might learn race biases early - some studies show racial bias as young as 3-5 years old - but they have to learn it. This study is a good reminder that genes don't code for specific behaviors or beliefs. Genes make people more or less sensitive to aspects of their environment.

Santos and colleagues argue that Williams syndrome makes kids insensitive to social fear. The interesting thing about Williams kids - and a scary thing for their parents - is that they will have complete trust in complete strangers. They are famously friendly, and love to talk. A story on NPR this week described a little girl with Williams, who charmed teachers and staff by ending all her conversations with "I love you." The girl's mother found it less charming, because she would have the same kind of "I love you" conversations with the salesman at Circuit city, the grocery store clerk, anybody.

Still, Williams children are not totally fearless. They are just as afraid of non-social threats like spiders and bees as other children. The fascinating thing about this disorder is how remarkably specific it is. It's this specificity that offers a new perspective on how racial prejudice works in America today. At bottom, this research is important because it suggests that social fear is at the root of racial prejudice.

This race-fear link is consistent with my own research showing that healthy White adults are more likely to mistake a harmless object like a cell phone or wallet for a gun if it belongs to a Black man. And research by Kurt Hugenberg showing that when people view facial expressions of emotion, the darker the skin color of the face, the more likely people are to think the face looks angry.

The most interesting unanswered question for me is what kind of fear makes the difference between developing or not developing racial prejudice? Is it a particular fear of Black people, based on stereotypes, as dangerous or criminal? Or is it the more general fear of uncertain and awkward interactions with people who look different? Join the conversation by commenting below.

 Link to original article: <http://www.sciencedirect.com/science/article/B6VRT-4YV2KWV-9/2/076306a40...

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Quotation of the day on 'intertemporal abstractions' and 'entering the world with prepackaged grievances'.... - AEI

from aei.org
http://www.aei.org/publication/quotation-of-the-day-on-intertemporal-abstractions/

Quotation of the day on 'intertemporal abstractions' and 'entering the world with prepackaged grievances'….

… is from Thomas Sowell's 2010 book "Intellectuals and Society" in the chapter titled "Intertemporal Abstractions" (emphasis mine):

The intelligentsia in 21st century America speak of "whites" and "blacks" as intertemporal abstractions with centuries-old issues to be redressed, rather than as flesh-and-blood individuals who take their sins and their sufferings with them to the grave. There is surely no more profound difference between human beings than the difference between the dead and the living. Yet even that difference is glided over verbally when speaking of races as intertemporal abstractions, of whom the current living generation is just the latest embodiment.

Intertemporal abstractions are especially useful to those intellectuals who tend to conceive of social issues in terms which allow the intelligentsia to be on the side of the angels against the forces of evil. When intellectuals are unable to find enough contemporary grievances to suit their vision or agenda, they can mine the past for harm inflicted by some members on others. By conceiving of those involved in the past as members of intertemporal abstractions, the intelligentsia can polarize contemporary descendants of those involved in past acts. The kind of society to which that leads is one in which a newborn baby enters the world supplied with prepackaged grievances against other babies born the same day.

• 
  

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A Simple Idea to Rediscover , Contributing Guest | EconLog | Library of Economics and Liberty

Again good stuff from econlib.

from econlib.org
http://econlog.econlib.org/archives/2018/06/a_simple_idea_t.html

A Simple Idea to Rediscover , Contributing Guest | EconLog | Library of Economics and Liberty by Pierre Lemieux 

Those who believe in democracy because they think the majority will always agree with them don't really believe in democracy. 

As William of Ockham could have put it, entia non sunt multiplicanda praeter necessitatem--"entities must not be multiplied beyond necessity." The whole question is knowing where necessity ends. Simple principles are useful, but simple ideas can also be simplistic. And the problem is much more challenging in normative statements, that is, when there is a "should." 

I want, however, to defend one simple political-normative idea that both the Left and the Right should discover--or perhaps rediscover. It's a simple classical-liberal and libertarian idea that makes much theoretical and historical sense: the state's powers should be limited in such a way that little damage would be done if the worst man or men came to power. Hitler would have done little evil at the helm of, say, the United States Steel Corporation. When dealing with the state, we should adopt a maximin strategy: maximize the minimum, that is, aim for the best of the worst possibilities.

          As Montesquieu wrote,

Since a despotic government is productive of the most dreadful calamities to human nature, the very evil that restrains it is beneficial to the subject.

          It is even more concise and beautiful in the original French:

Comme le despotisme cause à la nature humaine des maux effroyables, le mal même qui le limite est un bien. 

The fact that a state is democratic does not change that. The majority can be tyrannical. A majority of rationally ignorant voters could elect an autocrat who is benevolent, malevolent, or just dangerously ignorant or deluded. Serious advocates of democracy certainly assume that the democratic state is limited: think about John Rawls or James Buchanan, among others. Those who believe in democracy because they think the majority will always agree with them don't really believe in democracy.
Perhaps the case for libertarianism or classical liberalism ultimately rests on the prudential need to limit the state. (If one believes that this is impossible or that any state is worse than any anarchy, one must be an anarchist.)

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'The racism treadmill' - AEI

Amen!

from aei.org
http://www.aei.org/publication/the-racism-treadmill/

'The racism treadmill'

That's the title of an excellent article in Quillette by Coleman Hughes, an undergraduate philosophy major at Columbia University. Some excerpts appear below (emphasis added), but reading the full article would be worth your time. Hat tip goes to Charles Murray, who remarked on Twitter:  "This is really good, period. That it was written by an undergraduate is extraordinary." Amen.

The disparity fallacy holds that unequal outcomes between two groups must be caused primarily by discrimination, whether overt or systemic. What's puzzling about believers in the disparity fallacy is not that they apply the belief too broadly, but that they apply it too narrowly. Any instance of whites outperforming blacks is adduced as evidence of discrimination. But when a disparity runs the other way—that is, blacks outperforming whites—discrimination is never invoked as a causal factor.
……
Intuitive examples of the importance of culture are all around us. Disparities in athletic achievement, for instance, are inexplicable without reference to culture. Although blacks make up 14 percent of the U.S. population, they account for only 8 percent of MLB baseball players. This relatively small disparity has been enough to prompt articles in US News, NPR, and Vox that blame the decline in black baseball representation on everything from mass incarceration to racial bias to a generic sense among white fans that "baseball culture should stay white," as the Vox piece summarized it.

Meanwhile, blacks account for a staggering three-fourths of all NBA basketball players, while whites account for a mere 18 percent. Curiously, progressives have not seen the under-representation of whites in basketball as requiring any explanation whatsoever. When whites are under-represented somewhere, it is assumed to be a choice or a cultural preference. But when blacks are under-represented somewhere, progressives descend on the issue like detectives to the scene of an unsolved murder, determined to consider every possible explanation except for the "lazy" one: that in black culture, basketball is more popular than baseball.
………..
The disparity fallacy and the denial of cultural factors conspire to create a dynamic that I call the Racism Treadmill: as long as cultural differences continue to cause disparities between racial groups, and as long as progressives imagine that systemic racism lies behind every disparity, then no amount of progress in reducing systemic racism, however large or concrete, will ever look like progress to progressives.
…..
Staying on the Racism Treadmill means denying progress and stoking ethnic tensions. It means, as Thomas Sowell once warned, moving towards a society in which "a new born baby enters the world supplied with prepackaged grievances against other babies born the same day." Worse still, it means shutting down the one conversation that stands the greatest chance of improving outcomes for blacks: the conversation about culture.

By contrast, getting off the Treadmill means recognizing that group outcomes will differ even in the absence of systemic bias; it means treating people as individuals rather than as members of a collective; it means restoring the naive conception of equal treatment over the skin-color morality of the far Left; and it means rejecting calls to burn this or that system to the ground in order to combat forms of racial oppression that grow ever more abstract by the day. At bottom, it means acknowledging the fact that racism has declined precipitously, and perhaps even being grateful that it has.

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The Worst Man In Modern History | The Cobden Centre

Posted: 14 May 2018 01:05 AM PDT

It seems extraordinary that in defiance of all factual history and philosophical knowledge anyone should celebrate the bicentenary of the birth of Karl Marx. More than anyone, through wrong-headed ideas, he bears responsibility, indirectly admittedly, for the deaths of an estimated one hundred million people in the last century, and the severe suppression though economic and social servitude of fully one third of the world's population. And if you also include those who have suffered under the yoke of Marxist-inspired modern socialism, the philosophy that says the state is more important than the individual, you could argue nearly the whole world is influenced by Marxian philosophy today.

Quotations of the day on equality of outcomes.... - AEI

Too much wisdom and logic for some, but maybe in small doses......Sowell and Friedman are a dynamite combination.

from AEI.org
http://www.aei.org/publication/quotations-of-the-day-on-equality-of-outcomes/

Posted: 26 May 2018 07:20 AM PDT AEI Quotations of the day on equality of outcomes…. …. are from Thomas Sowell: 1. If you cannot achieve equality of performance among people born to the same parents and raised under the same roof, how realistic is it to expect to achieve it across broader and deeper social divisions? …… 2. If there is not equality of outcomes among people born to the same parents and raised under the same roof, why should equality of outcomes be expected—or assumed—when conditions are not nearly so comparable? Quotations of the day on equality of outcomes…. Mark Perry

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Quotation of the day on how the success of others is now a grievance, rather than an example..... - AEI

from AEI.org
Quotation of the day on how the success of others is now a grievance, rather than an example..... - AEI:

"…. is from Thomas Sowell, writing in his 2002 book The Quest for Cosmic Justice:

There has now been created a world in which the success of others is a grievance, rather than an example. Irrational as such ideological indulgences may be, they are virtually inevitable when equality becomes the social touchstone, for equality can be achieved only by either divorcing performance from reward or by producing equal performances. Since the latter is all but impossible, if only because everyone is not equally interested in the same kinds of performances, the passion for equality leads toward a divorce of performance and reward – which is to say a divorce of incentive and behavior, and even a divorce of cause and effect in our minds."

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