Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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
  • “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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

AI Summary. Denmark's intergenerational educational mobility resembles that of the U.S. despite its extensive welfare and equalizing social policies, with cognitive test scores of Danish children correlating similarly with parental income across cohorts born in 1958 and 1988. The evidence suggests family background and neighborhood effects shape educational outcomes in ways universal service provision does not offset.

James Heckman and Rasmus Landersø National Bureau of Economic Research
Date Posted:
Is Database:
Database

Danish and American intergenerational educational mobility ~ mirror each other despite Denmark’s social spending.

Do generous welfare policies raise educational mobility across generations?

Core argument: Denmark's intergenerational educational mobility mirrors that of the United States, with children of college-educated parents outperforming children of less-educated parents in both countries despite Denmark's extensive social policies aimed at reducing inequality.

Despite Denmark's extensive social policies aimed at reducing inequality, intergenerational educational mobility mirrors that of the U.S., highlighting the persistent influence of family background on child outcomes. Data shows that cognitive test scores for Danish children born in 1958 and 1988 correlate similarly with parental income, despite the expansion of welfare programs. This suggests that powerful forces beyond social policy, such as family advantage and neighborhood effects, drive educational outcomes. The intergenerational elasticity of income (IGE) in Denmark indicates a stronger link between generations than previously thought, challenging assumptions about the effectiveness of equal service provision in eliminating inequality. The evidence underscores that while Danish welfare policies provide universal access, they do not significantly alter the transmission of economic status across generations, as children of college-educated parents outperform those of less-educated parents in both Denmark and the U.S.

Takeaways by Macro Roundup® AI

  1. Denmark's intergenerational educational mobility mirrors that of the United States, with children of college-educated parents outperforming children of less-educated parents in both countries despite Denmark's extensive social policies aimed at reducing inequality.
  2. Cognitive test scores for Danish children born in 1958 and 1988 correlate similarly with parental income, suggesting that the expansion of Danish welfare programs across those cohorts did not weaken the link between family background and child outcomes.
  3. Denmark's intergenerational elasticity of income indicates a stronger link between generations than previously thought, challenging the assumption that equal provision of services eliminates the transmission of economic status across generations.

James Heckman and Rasmus Landersø, “Lessons from Denmark about Inequality and Social Mobility,” National Bureau Of Economic Research, March 2021, https://www.nber.org/papers/w28543

Conclusions, “…Many American policy analysts point to Denmark as a model welfare state with low levels of income inequality and high levels of income mobility across generations. It has in place many social policies now advocated for adoption in the U.S. Despite generous Danish social policies, family influence on important child outcomes in Denmark is about as strong as it is in the United States.More advantaged families are better able to access, utilize, and influence universally available programs. Purposive sorting by levels of family advantage create neighborhood effects. Powerful forces not easily mitigated by Danish-style welfare state programs operate in both countries….”

Note the increased spending had no impact on mobility btw cohorts in Denmark“….Fig. 4b shows cognitive test score ranks for the all males born in 1958 and 1988 in Denmark by their parents’ income percentiles,22 along with cognitive test score ranks across parents’ income percentiles for children from the CNLSY data. The figure illustrates two points: First, no striking differences appear when comparing the association between children’s test scores and parents’ income percentiles in Denmark and the U.S. Second, the association between children’s cognitive test scores and parents’ income is strikingly similar for Danish cohorts born 30 years apart. Although the 1988 cohort is born after the rapid welfare state expansion previously described and the 1958 cohort is born just before the expansion took off, the associations between test scores and parents’ resources are practically identical. Family influence retains its tight grip….”

First, “…. Intergenerational educational mobility is about the same in both countries for the most recent cohorts. Transmission of skills across generations is equally strong in both countries, despite stark differences in income inequality and offered public services….”
Second“….The traditional literature on the intergenerational transmission of economic status compares snapshots of lifetime incomes of parents and children. This approach gives only a limited picture of the transmission of lifetime well-being across generations. Using Danish register data on lifecycle income, we find that intergenerational elasticities of income (IGE) of lifetime well-being are much higher than those estimated using incomes measured over a small window of ages. Accounting for uncertainty and credit market restrictions increases estimated dependence across generations. Well-being is much more tightly linked across generations in Denmark than conventional snapshot measures of lifetime income indicate….”

Third, “….We expand the analysis of family influence beyond the traditional analysis of IGEs of income to include choices of neighborhood, peers, and schools as parental investments in their children. We present compelling evidence of purposive sorting by parents in making neighborhood choices. Our evidence calls into question the assumptions underlying the recent neighborhood influence literature – that timing of residential choice is random with respect to the lifetime gains for children….”
The key evidence, “…Despite the generosity of the Danish welfare state and equality in access for all citizens, substantial inequality of child outcomes remains across social and economic classes. Figure 1 documents these gaps and compares them to their U.S. counterparts. Children of college-educated women do substantially better than children of secondary school dropouts on many dimensions in both countries….”

Their core findings:

Likely very useful new Heckman demonstrates the limited utility of social policy to change mobility outcomes for children. Despite interventionist Danish social policy family influence on child outcomes in Denmark is ~ as strong as it is in the United States. Inequality of child outcomes remains across economic classes, for example children of college educated women do better in both Demark and the US. Their bottomline, “…However,if equal Danish provision of services does not eliminate inequality in many important life outcomes, the origins of inequality and social immobility lie elsewhere…”

Ed Comment:“Of course we know the truth from studies of identical twins separated at birth. 50 to 80% is genetic (probably more if you did a regression using all the relevant determinants of success) and only half of the rest is shared environments, at least as the shared environment is currently administered. That means the shared environment could be as little as 10%, where a 20% improvement only yields a 2% gain.”

Showing 160 database articles primarily about Inequality
Currently filtering by: