Edward Conard

Top Ten New York Times Bestselling Author

  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, April 23, 2019

AI Summary. The socioeconomic achievement gap has changed little over 50 years, at roughly 1.0 standard deviations between top and bottom deciles and about 0.8 between top and bottom quartiles — equivalent to four years of learning. Average gains of 0.5 standard deviations at age 14 disappear by age 17.

Eric A. Hanushek Education Next
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The socioeconomic achievement gap remains strikingly persistent, with disparities of about 1.0 standard deviations btw the top and bottom deciles & around 0.8 standard deviations btw the top and bottom quartiles.

Has the socioeconomic achievement gap narrowed over the past 50 years?

Core argument: The socioeconomic achievement gap between top and bottom deciles stands at about 1.0 standard deviations, equivalent to four years of learning, and has not changed significantly over the past 50 years.

The socioeconomic achievement gap remains strikingly persistent, with disparities of about 1.0 standard deviations between the top and bottom deciles and around 0.8 standard deviations between the top and bottom quartiles. These gaps, equivalent to four years of learning, have not significantly changed over the past 50 years. While average student performance has improved by 0.5 standard deviations at age 14, these gains vanish by age 17, indicating no rising tide as students transition to college and careers. For the 1954 birth cohort, the achievement gap was slightly less than 1.2 standard deviations, decreasing marginally to about 1.05 for those born in 2001. The 75-25 gap also shows minimal reduction, settling just below 0.8 standard deviations for the 2001 cohort. Despite some early narrowing in math achievement, recent decades have seen a return to previous levels, while reading gaps remain flat throughout the period.

Takeaways by Macro Roundup® AI

  1. The socioeconomic achievement gap between top and bottom deciles stands at about 1.0 standard deviations, equivalent to four years of learning, and has not changed significantly over the past 50 years.
  2. Across birth cohorts, the top-bottom decile gap fell only from just under 1.2 standard deviations for those born in 1954 to about 1.05 for those born in 2001, with the 75-25 gap settling just below 0.8 standard deviations.
  3. Average student performance improved by 0.5 standard deviations at age 14 but those gains vanish by age 17, and while math gaps narrowed early before returning to prior levels, reading gaps remained flat throughout.

We reviewed this research when it was released (follows) Hanushek also wrote a frustrating WSJopedpreviewing itThe War on Poverty Remains a Stalemate

Eric A. Hanushek, Paul E. Peterson, Laura M. Talpey and Ludger Woessmann, "The Achievement Gap Fails to Close,"Education Next, Summer 2019, https://www.educationnext.org/achievement-gap-fails-close-half-century-testing-shows-persistent-divide/

"... We find that the socioeconomic achievement gap among the 1950s birth cohorts is very large—about 1.0 standard deviations between those in the top and bottom deciles of the socioeconomic distribution (the “90-10 gap”) and around 0.8 standard deviations between those in the top and bottom quartiles (the “75-25 gap”). These are very extensive disparities, as 1 standard deviation is approximately the difference in the average performance of students in 4th and 8th grades, or four years’ worth of learning. But though these inequalities are large, they have neither increased nor decreased significantly over the past 50 years.It could be, however, that the picture is not as dismal as suggested. If overall changes in society, coupled with policy initiatives, have proportionately lifted all boats at the same rate, everybody might be better-off, even if gaps have not significantly changed. Using the same data as for the gap analysis,we find gains in average student performance of about 0.5 standard deviations for students at age 14, or roughly 0.1 standard deviations per decade. But, surprisingly, over the last quarter century, those gains disappear for students by age 17. In other words, there is no rising tide for students as they leave school for college and careers.....As can be seen in Figure 1, the disparities in achievement between students from the highest and lowest socioeconomic status groups are strikingly persistent throughout the time period. The socioeconomic achievement divide hardly wavers over this half century. In the 1954 birth cohort, the achievement gap between the average of those in the top and bottom deciles of the socioeconomic distribution stood at slightly less than 1.2 standard deviations. For those born in 2001, the gap is only slightly less—about 1.05 standard deviations. That is, the most-disadvantaged students have made the same gains in achievement over the decades as those realized by the most-advantaged students. The disparity between students in the top and bottom quartiles of the socioeconomic distribution was about 0.9 standard deviations for the 1954 birth cohort. This 75-25 gap falls slightly during the next two decades, settling at barely below 0.8 for the cohort born in 2001. Trends are similar for math and reading separately. The gap in math achievement, particularly for the 90-10 comparison, shows a little movement over the period—narrowing in the early years but returning to a position below the initial level in recent decades. The 75-25 math gap narrows slightly over time. In reading, the pattern appears essentially flat for the entire period....Figure 2 also shows the white-black achievement gap. While this is not accurately thought of as a socioeconomic gap because of the improvements in black incomes, it represents another potential dimension of continuing societal disparities. As Figure 2 shows, there is a sizable shrinking of the racial gap in the early period but little change across the last two decades.... In sum, our results confirm Reardon’s finding of large gaps in academic performance between students at the extremes of the socioeconomic distribution. The average 90-10 income achievement gap across the surveys suggested by the Reardon analysis is very similar to the 90-10 socioeconomic achievement gap we identify. We are, however, unable to replicate Reardon’s finding that achievement differentials have risen by as much as 75 percent over the past 50 years. His results may be a function of a reliance upon cross-sectional studies that use disparate methods for collecting both income and achievement information. Whatever the reason, the trends estimated in his analysis differ markedly from the gaps we observe by using a uniform measure of socioeconomic status and data from intertemporally linked surveys administered to students of the same age...."

AI Summary. The Pew Research Center estimates median adjusted income for Millennial-headed households at $69,000, exceeding nearly every other year on record for households at the same age. A Federal Reserve analysis using a different methodology finds real full-time earnings of Millennial male household heads similar to Generation X men's and over 10% below Baby Boomer men's at comparable ages.

Richard Fry Pew Research Center
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Millennial households’ median adjusted income was $69,000 in 2017, surpassing most older Americans at the same age. However, Fed analysis shows lower real income due to the Great Recession & increased female labor force participation.

Do young adult households earn more than earlier generations did?

Core argument: Pew Research Center found median adjusted income for Millennial-headed households was $69,000 in 2017, exceeding nearly every other year on record except around 2000, when it was $67,600 in inflation-adjusted dollars.

The Pew Research Center found that the median adjusted income for Millennial-headed households was $69,000 in 2017, surpassing nearly every other year on record except around 2000 when it was $67,600 in inflation-adjusted dollars. This suggests that young adult households are earning more than most older Americans did at the same age. However, the Federal Reserve's analysis, using a different methodology, indicates that Millennials have lower real income compared to earlier generations at similar life stages, partly due to the economic impact of the Great Recession and increased labor force participation of women. Specifically, the real average full-time labor earnings of a Millennial male household head in 2014 were similar to those of a Generation X male in 1998 and over 10% lower than a Baby Boomer male in 1978. These findings highlight the complex dynamics of generational income trends and the influence of economic conditions and demographic shifts.

Takeaways by Macro Roundup® AI

  1. Pew Research Center found median adjusted income for Millennial-headed households was $69,000 in 2017, exceeding nearly every other year on record except around 2000, when it was $67,600 in inflation-adjusted dollars.
  2. The Federal Reserve's analysis, using a different methodology, indicates Millennials have lower real income than earlier generations at similar life stages, partly due to the Great Recession and increased labor force participation of women.
  3. Real average full-time labor earnings of a Millennial male household head in 2014 were similar to a Generation X male's in 1998 and over 10% lower than a Baby Boomer male's in 1978, according to the Federal Reserve.

Okay, we have some recent stuff on this from Pew, the Federal Reserve and Ernie. Pew's looked at household incomes in December of last year and found each new generation seems to be doing better than prior ones at most ages, at least in real household money income. "....The median adjusted income in a household headed by a Millennial was $69,000 in 2017. That is a higher figure than for nearly every other year on record, apart from around 2000, when households headed by people ages 22 to 37 earned about the same amount - $67,600 in inflation-adjusted dollars. (A recent study by the Federal Reserve, which also looked at Millennials’ income, used a different methodology and data source.)..."

Young adult households are earning more than most older Americans did at the same age: Extended Excerpt Image 1


For context the Fed used laborearningsand found lower real income then their comps (say baby boomers @ the same point during the life cycle) "... In the economic sphere, millennials appear to have paid a price for coming of age during the Great Recession: Millennials tend to have lower income than members of earlier generations at comparable ages, although the income of young households has not changed much; the difference likely reflects, in part, the rising labor force participation of women....."...Specifically, the real average full-time labor earnings of a millennial male household head in 2014 were about the same as those for a comparable male Generation X household head in 1998 and over 10 percent lower than those fora comparable male baby boomer household head in 1978...."

Young adult households are earning more than most older Americans did at the same age: Extended Excerpt Image 2

(note this male head of household number doesn't adjust for single/married or educational attainment) Ernie adjusted the Pew household money income for education levels which is also worth noting. Quick write ups follow in descending order. Richard Fry, "Young adult households are earning more than most older Americans did at the same age," Pew Research Center, December 11, 2018, http://www.pewresearch.org/fact-tank/2018/12/11/young-adult-households-are-earning-more-than-most-older-americans-did-at-the-same-age/

AI Summary. Reported academic gains at KIPP charter schools were skewed by high student attrition, with up to 40% of students leaving before graduation, and that attrition fell disproportionately on disadvantaged students, indicating selection bias in the reported outcomes. KIPP's heavy reliance on private funding also raises questions about scalability and sustainability within public education.

Richard Kahlenberg and Halley Potter Teacher College Press
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KIPP public schools, once hailed as a model for educational success, have faced significant challenges, revealing systemic biases. Data indicates that while KIPP schools initially reported impressive academic gains, these results were often skewed by high student attrition rates.

Do high student attrition rates overstate charter schools' academic gains?

Core argument: Up to 40% of KIPP students left before graduation, attrition that skewed the schools' reported academic gains.

The KIPP [Knowledge Is Power Program] public schools, once hailed as a model for educational success, have faced significant challenges, revealing systemic biases. Data indicates that while KIPP schools initially reported impressive academic gains, these results were often skewed by high student attrition rates, with up to 40% of students leaving before graduation. This attrition disproportionately affected students from disadvantaged backgrounds, suggesting a selection bias that undermines the validity of reported outcomes. Furthermore, the financial model of KIPP schools, heavily reliant on private funding, raises questions about scalability and sustainability within the broader public education system. These findings highlight the need for a more equitable approach to educational reform that addresses underlying socioeconomic disparities rather than relying on selective metrics of success.

Takeaways by Macro Roundup® AI

  1. Up to 40% of KIPP students left before graduation, attrition that skewed the schools' reported academic gains.
  2. Attrition at KIPP schools disproportionately affected students from disadvantaged backgrounds, suggesting a selection bias that undermines the validity of reported outcomes.
  3. KIPP's heavy reliance on private funding raises questions about the scalability and sustainability of its model within the broader public education system.

Richard Kahlenberg and Halley Potter, A Smarter Charter: Finding What Works For Charter Schools and Public Eduction, Teacher College Press, September 2014https://books.google.com/books

Ed Comment:Survey of charter school studies on selection biases including Kipp school that tried to take over a public school (ie without selection) and failed.

Wednesday, April 24, 2019

AI Summary. 63% of college administrators have backgrounds in the arts, humanities, and social sciences, while only 22% of students are interested in those fields; just 16% of administrators come from technical and pre-professional areas that attract nearly two-thirds of students. The author argues recruiting more administrators from science, engineering, and business would broaden intellectual diversity on campus.

Samuel J. Abrams Minding The Campus
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63% of college administrators have a background in arts/humanities/social science, 3x the number of students.

Would hiring administrators from science and business broaden campus viewpoint diversity?

Core argument: 63% of higher-education administrators have backgrounds in the arts, humanities, and social sciences, versus 22% of students interested in those fields.

The disparity between student interests and administrator backgrounds in higher education is stark, with 63% of administrators having backgrounds in arts, humanities, and social sciences, compared to only 22% of students interested in these fields. In contrast, while nearly two-thirds of students seek technical and pre-professional training, only 16% of administrators have experience in these areas. This imbalance contributes to a lack of intellectual diversity on campuses, as administrators often set the political agenda and influence campus culture. To address this, institutions should recruit more administrators with backgrounds in science, engineering, and business to align with student interests and promote a more balanced campus environment. This shift could mitigate the current liberal bias and provide students with diverse intellectual perspectives and professional guidance.

Takeaways by Macro Roundup® AI

  1. 63% of higher-education administrators have backgrounds in the arts, humanities, and social sciences, versus 22% of students interested in those fields.
  2. Nearly two-thirds of students seek technical and pre-professional training, while 16% of administrators have experience in those areas.
  3. Recruiting more administrators with science, engineering, and business backgrounds would, the author argues, align campus leadership with student interests and mitigate liberal bias, given that administrators set the political agenda and influence campus culture.

"...While roughly 22% of incoming students want to major in fields like anthropology, art history, and English, 63% of administrators have backgrounds in the arts, humanities and social sciences - three times the number of students. As for pre-professional business and health professions, only 9% of administrators have backgrounds that speak to students with those needs. Just 7% of administrators have backgrounds in technical fields like engineering and computer science, and this is 5 times smaller than the number of students who are entering college wanting to study in those areas. The data reveals that although almost two-thirds of students want technical and pre-professional training in college, only 16% of administrators have any experience in those areas which is a shockingly limited amount of intellectual diversity among administrators..."

Samuel J. Abrams, "Want Viewpoint Diversity on Campus? Here’s How,"Minding The Campus, April 16, 2019, https://www.mindingthecampus.org/2019/04/16/want-viewpoint-diversity-on-campus-heres-how/

Want Viewpoint Diversity on Campus? Here’s How

From supporting shout-downs and intimidation of conservative speakers to denying due process to students accused of sexual assault, stories regularly emerge that chronicle the liberal lopsidedness and lack of true viewpoint diversity among campus administrators.

It is widely known that these omnipresent administrators - mid-tier staffers who occupy dozens of offices including diversity and inclusion, student achievement and success, deans of students, and student affairs — set the political agenda from orientation programs to residential life policies and are far more progressive than those in the professoriate and the students.

The question remains: what can be done to bring more balance to higher education?

After spending a number of years studying this problem, I have an answer: we need more scientists, engineers, and business-focused college administrators who sync up with the interests of students and bring in drastically alternative values from those in the humanities who now dominate the administrative class.

This conclusion comes from a national survey of over 900 students in 2018, which shows not only are the humanities dominant among administrators but also that there is a significant disconnect between what incoming students want to study in college and those who set the tone and tenor of so much life on campus.

Specifically, UCLA’s Higher Education Research Institute asks incoming students about their intended major, and just under 11% are interested in the arts and the humanities while another 11% state the social sciences are what they hope to study. In contrast, 26% of new students state that they are interested pre-professional courses of study like business and health-related fields and another 35% hold that technical fields like computer science, engineering, and hard sciences are their planned fields of study. There is a real diversity in student interest, and this breakdown of majors fits nicely with narratives that show lower demand for humanities of late and significant shortages for classes in programming and related technical fields.

While roughly 22% of incoming students want to major in fields like anthropology, art history, and English, 63% of administrators have backgrounds in the arts, humanities and social sciences - three times the number of students. As for pre-professional business and health professions, only 9% of administrators have backgrounds that speak to students with those needs. Just 7% of administrators have backgrounds in technical fields like engineering and computer science, and this is 5 times smaller than the number of students who are entering college wanting to study in those areas.

The data reveals that although almost two-thirds of students want technical and pre-professional training in college, only 16% of administrators have any experience in those areas which is a shockingly limited amount of intellectual diversity among administrators.

Going further, the fact that the humanities are so pronounced and the disparities between student interests and the background of administrators are so great, we now have a clear basis for the problems with campus discourse today.

As a professor of politics, rarely does a week go by when I do not have a student in my office who is upset about the socio-political currents on campus. So many students are interested in careers and internships, pursuing their passions (which may not be art history or anthropology) and are looking to have a bit of fun; they are not interested in regular fights about social justice and political correctness in their social spaces.

Students tell me that campus administrators regularly present programming with messages about diversity and inclusion that are unwanted and one-sided, are told about how they are pressured to talk about sexuality and identity even when they consider these topics private, and are barraged with seemingly never-ending socio-political narratives from their dorms to the dining halls that are distracting and disruptive to their collegiate goals.

Taking this new background about administrators into account, the extreme liberalism in indoctrination makes total sense. Whereas humanistic inquiry is often subjective, is fixated on the human condition where facts are hard to define, sees activism as ethically essential, and views engagement as necessary to address wrongs of the past, those in business, science and engineering value clear evidence, the scientific method, and often eschew politicizing their inquiries and questions.

If administrators are overwhelming from the humanities, which now explicitly promote liberal activism and engagement, and there are few scientists around to work with students and bring the evidence-based values to the table, it is no wonder that our college and university extracurricular programming has taken a sharp turn to the left.

Thus, one solution to this ideological imbalance is clear: If our institutions of higher education and their administrators really value viewpoint diversity, these schools will actively recruit administrators who will match the intellectual needs of their students and move beyond a population that deeply values political promotion.

True viewpoint diversity is so much greater than identity politics, and it includes divergent intellectual paths as well. Engineering and computer science students have their own norms and culture, and that is notably different from those in the arts and social sciences. Varied cultures can and should co-exist, and more intellectual balance among administrative personnel should help provide more balance for our students.

Administrators with broader views will change campus culture for the better because questions of social justice and righting past wrongs may be crucial to some students, many students do not want liberal politics infused into every aspect of their lives outside the classroom, they just want real personal and professional guidance.

AI Summary. Organisation for Economic Co-operation and Development data show the working-age population aged 25-54 declining as a share of the total population across major economies, falling to roughly 39% in both the United States and France and 41% in Germany.

OECD Staff OECD
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The working age population (aged 25-54) as a share of the total population has shown a declining trend across major economies since 1970, according to @OECD data.

Is the prime working-age population shrinking as a share of major economies?

Core argument: The share of the population aged 25–54 in the US fell from 42% in 2005 to 39% in 2014, with France declining from 40% to 39% and Germany from 43% to 41%, per OECD data.

From 1970 to 2014, the working age population (aged 25-54) as a share of the total population has shown a declining trend across major economies. In 2005, the US had 42%, France 40%, and Germany 43% of their populations in this age group. By 2014, these figures had decreased to 39% for both the US and France, and 41% for Germany. This decline reflects broader demographic shifts, including aging populations and lower birth rates, which have significant implications for labor markets, economic growth, and social welfare systems. The OECD's data highlights the need for policy adjustments to address potential labor shortages and to sustain economic productivity. As these trends continue, countries may need to consider strategies such as increasing labor force participation rates among older workers or implementing policies to attract younger immigrants to maintain a balanced working age demographic.

Takeaways by Macro Roundup® AI

  1. The share of the population aged 25–54 in the US fell from 42% in 2005 to 39% in 2014, with France declining from 40% to 39% and Germany from 43% to 41%, per OECD data.
  2. From 1970 to 2014, the working age population aged 25–54 as a share of the total population declined across major economies, a shift attributed to aging populations and lower birth rates.
  3. OECD data point to a need for policy adjustments to address potential labor shortages, with options including raising labor force participation among older workers or attracting younger immigrants.

The OECD series for Prime Age Population is incomplete but here's what we have, so the Working Age Population (25-54, All Persons) as a Share of the total population in 2005 Was 42% for the US, 40% for France and 43% for Germany. As of 2014 those percentages have declined to 39% for the US and France and 41% for Germany. They don't have population estimates post 2014. OECD, "Working age Population, Aged-25-54, All Persons" and "Population mid-year estimates Total," Organisation for Economic Co-operation and Development, Accessed April 24, 2019, https://stats.oecd.org/Index.aspxhttps://stats.oecd.org/Index.aspx


Working on the prime age population now, as a stand in this is the OECD's primary metric for working age is 15-64 measured as a percentage of population. This is what that looks like for the "core four" from 1970-2014.