“…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
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“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
“…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
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts

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The U.S. Military's Recruiting Crisis

Dexter Filkins The New Yorker

Date Posted:: February 4, 2025
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DoD found over 75% of Americans between 17 and 24 are ineligible for military service due to being “overweight, unable to pass the aptitude test, afflicted by physical or mental health issues, or disqualified by such factors as a criminal record.”

In 2022 and 2023, the Army missed its recruitment goal by nearly twenty-five percent—about fifteen thousand troops a year. It hit the mark last year, but only by reducing the target by more than ten thousand. The Navy has also fared badly: it failed to reach its goals in 2023, then met them in 2024 by filling out the ranks with recruits of a lower standard; nearly half measured below average on an aptitude exam. Recruiters are contending with a population that’s not just unenthusiastic but incapable. According to a Pentagon study, more than three-quarters of Americans between the ages of seventeen and twenty-four are ineligible, because they are overweight, unable to pass the aptitude test, afflicted by physical or mental-health issues, or disqualified by such factors as a criminal record.

To Fix Education, Fix The Economy First

John Burn-Murdoch Financial Times

Date Posted:: August 7, 2026
Is Database:: Database
Is Important:: Important

Using OECD skills data and the Luxembourg Income Study, Burn-Murdoch finds US workers at the lowest levels of literacy and numeracy earn ~ on par with British workers scoring a 2, ~ a mean score.

30% of US adults have literacy skills typical of a 10-year-old. The same proportion of US workers who score stunningly low on literacy earn an average of almost $30 per hour, and two-thirds of them are in work. Their British counterparts make the equivalent of $20 and fewer than half are employed. This all looks more like the fruits of years of stronger growth than vocational education policy. We should view education as creating potential that a strong economy unleashes (and a weak one disappoints).

Meritocracy and the Networks It Forged: China’s Imperial Examination

Ying Bai and Ruixue Jia National Bureau of Economic Research

Date Posted:: August 3, 2026
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From 1644–1905, Qing China staffed its bureaucracy through exams and patronage. Only 12.6% of exam graduates reached top office, but patronage favored stronger performers, illustrating how merit and connections can be complements rather than substitutes.

Figure 5 studies the interplay between merit and networks by estimating the effects of exam performance and ties to powerful examiners separately for the high- and low-performing categories. The left panel shows the effects of exam performance for the two categories, while the right panel presents those of examiner power. Two patterns stand out. First, exam performance matters more for the high category, consistent with the institutional design that steered this elite group toward more prestigious careers. Second, ties to powerful examiners are also more valuable for the high category, pointing to a complementarity between merit and networks. To understand the implications of our finding on complementarity, it is useful to contrast it with the counterfactual of substitution. When merit and networks are complements (rather than substitutes), those who attained top office tend to exhibit both stronger exam performance and stronger connections. By contrast, under substitution, strong networks would compensate for weaker exam performance, and vice versa. Complementarity implies [a higher degree of meritocracy than substitution, as] successful candidates appear to have had better performance. Second, complementarity makes it harder to identify the influence of networks: their effects can operate under the guise of merit rather than as a visible substitute for it.

The Returns to Education: A Meta-Study

Gregory Clark and Christian Alexander Abildgaard Nielsen Kyklos

Date Posted:: February 11, 2026
Is Database:: Database
Is Important:: Important

Clark and Nielsen replicate the ~8% estimates of the return to education obtained by standard methods, but find evidence of selection biases in favor of high estimated returns. After correcting for these biases, they calculate returns on the order of 3%.

In this meta-study of 79 estimates of the causal effects of education on earnings (derived from increases of the mandated school-leaving age or legislation banning child labor under certain ages), we report a similar effect to [the classic] earlier study (Ashenfelter, et al): an 8.2% gain in earnings for each year of education. We also find clear evidence of significant publication biases. Studies passing the filter of publication were more likely to have coefficients statistically significantly greater than 0, and we observe strong evidence that studies with returns estimated at less than 0 were more difficult to publish. There is strong suggestive evidence of the first publication bias in the data. Figure 6 shows that the average estimated return rises substantially where the standard error is larger. This suggests a greater likelihood of an estimate being published when it was statistically significantly different from 0. If all estimates were published independent of the estimated return, we would not expect there to be such a gradient. Correcting the first publication bias by looking at the average return on the studies with the lowest standard errors would suggest an average causal return to education of no more than 3%, compared to the reported 8.2%. Independent of this, correcting for the omission of returns less than 0 implies an overall causal return to education only in the 0%–3% range.

Marginal Admission to Elite High Schools: Long-run Effects on Labor Market Outcomes

Francisco Cabrera-Hernández, Andrew Dustan, Daniel Osuna Gomez and María Padilla-Romo National Bureau of Economic Research

Date Posted:: January 22, 2026
Is Database:: Database

In data from the Mexico City metro area over 2003–2009, students who just missed the exam score cutoff for admission to an elite high school have 5.3% higher wages after five years (2.5% after 10 years) than marginally admitted students.

[We] trace out the [harmful] causal impact of [marginal] assignment to an elite school [as opposed to just missing the admissions cutoff] on formal private labor market outcomes over time. Five years after the assignment process (at ages 19-20, beyond high school age), elite assignment [based on a test score marginally above the cutoff] causes a 3.2pp decline in the probability of ever having held a formal job. This is a 16% decline relative to the base rate of 20% for students missing the elite cutoff by one point. Over time, this elite disadvantage declines: after 10 years (at ages 24-25, after the typical age of college graduation), the effect is -2.1pp, while after 15 years (at ages 29-30) the estimated -0.2pp impact is statistically insignificant. While the negative effect on formal employment eventually fades, it leaves elite students with a deficit in formal labor market experience. After 5 years, elite assignment reduces the cumulative number of months with a formal job by 14%. Conditional on formal employment, marginal elite assignment causes a reduction in wages that fades out over time. Five years after assignment, elite assignment reduces wages by 5.3%. This reduction declines to 2.6% after 10 years, and [essentially vanishes] after 15 years.

Plunging US Birth Rate Leaves Too Many Colleges With Too Few Kids

Elizabeth Rembert, Amanda Albright and Marie Patino Bloomberg

Date Posted:: January 16, 2026
Is Database:: Database

As America’s demographics roll over, smaller public and private liberal arts colleges have “already hit the precipice.” Btw 2003 and 2024, more than 100 public campuses closed, and ~ 2/3 of private for-profit colleges have shut down since the 2010s.

The country’s tumbling birth rate is pushing schools toward a “demographic cliff,” where a steadily dropping population of people in their late teens and early 20s will leave desks and classrooms empty. Many smaller, lesser-known schools have already hit the precipice. They’re firing professors, paring back liberal arts courses in favor of STEM — or closing altogether. Others will likely reach the cliff in the next few years. Although it has plunged since the 1950s, the US birth rate ticked upward slightly before the 2008 financial crisis, and that brief demographic boost has kept enrollment at larger schools afloat. But the nationwide pool of college-aged Americans is expected to shrink after 2025. The financial pressure will be relentless. “If colleges were facing a stark decline in one or two cohorts, higher ed could likely say, ‘Well, we could admit a few additional students and tighten our belts to muddle through,’” said Nathan Grawe, an economics professor at Carleton College in Minnesota, who has written books about education and demographics. “But it’s one year after another of contraction, of ratcheting up the pressure.”

How Mississippi Transformed Its Schools From Worst to Best

Sarah Mervosh New York Times

Date Posted:: January 13, 2026
Is Database:: Database

Controlling for poverty and demographics, Mississippi has the best outcomes for fourth-grade reading and math, and is near the top in eighth-grade scores. In absolute terms, “eighth graders still rank 41st on national tests for reading, and 35th for math.”

Adjusted for poverty and other student demographics, Mississippi is No. 1 for fourth grade reading and math, and at or near the top in eighth grade, according to the Urban Institute. Mississippi’s gains have been confined mostly to the early years, where the state has focused its efforts. The system revolves around standardized testing, and the gains have not always persisted. By raw scores, Mississippi eighth graders still rank 41st on national tests for reading, and 35th for math. The state pushed through a vast list of other changes from the top down, including changing the way reading is taught, in an approach known as the science of reading, but also embracing contentious school accountability policies other states have backed away from. Unlike No Child Left Behind, the Bush-era federal law that set a goal of having every child in America be proficient in reading and math, Mississippi also measures how much students progress toward proficiency. Schools get credit if students show improvement — and double credit for the improvement of students in the bottom 25%.

DoD found over 75% of Americans between 17 and 24 are ineligible for military service due to being “overweight, unable to pass the aptitude test, afflicted by physical or mental health issues, or disqualified by such factors as a criminal record.”

Related Articles:

Using OECD skills data and the Luxembourg Income Study, Burn-Murdoch finds US workers at the lowest levels of literacy and numeracy earn ~ on par with British workers scoring a 2, ~ a mean score.

Related Articles:

From 1644–1905, Qing China staffed its bureaucracy through exams and patronage. Only 12.6% of exam graduates reached top office, but patronage favored stronger performers, illustrating how merit and connections can be complements rather than substitutes.

Related Articles:

Clark and Nielsen replicate the ~8% estimates of the return to education obtained by standard methods, but find evidence of selection biases in favor of high estimated returns. After correcting for these biases, they calculate returns on the order of 3%.

Related Articles:

In data from the Mexico City metro area over 2003–2009, students who just missed the exam score cutoff for admission to an elite high school have 5.3% higher wages after five years (2.5% after 10 years) than marginally admitted students.

Related Articles:

As America’s demographics roll over, smaller public and private liberal arts colleges have “already hit the precipice.” Btw 2003 and 2024, more than 100 public campuses closed, and ~ 2/3 of private for-profit colleges have shut down since the 2010s.

Related Articles:

Controlling for poverty and demographics, Mississippi has the best outcomes for fourth-grade reading and math, and is near the top in eighth-grade scores. In absolute terms, “eighth graders still rank 41st on national tests for reading, and 35th for math.”

Related Articles: