Edward Conard

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  • “…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
  • “…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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Upside of Inequality Oxford Unintended Consequences

Debopam Bhattacharya Quantitative Economics
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Research by @Debopam Bhattacharya shows that controlling for AFQT scores significantly reduces the racial gap in intergenerational mobility, suggesting that these scores reflect accumulated differences in family background rather than innate abilities.

The study reveals that controlling for AFQT [Armed Forces Qualification Test] scores significantly reduces the racial gap in intergenerational mobility, suggesting that these scores reflect accumulated differences in family background rather than innate abilities. The analysis shows that conditional on AFQT scores, the probability of leaving the bottom quintile is similar for blacks and whites, with only a slight difference of 2 percentage points at the 25th interval of normalized scores. This finding highlights the potential impact of early-life interventions over later affirmative action policies, as environmental factors strongly influence test scores. The results indicate that racial disparities in mobility are not inherent but are shaped by external influences, warranting further exploration into policy implications.

“…Our most striking finding, however, is that when we (nonparametrically) control for AFQT scores, most of the racial gap in IGM disappears—whether measured via transition probability or upward mobility. We are careful in our interpretation of this finding. First, existing studies suggest that these scores largely reflect accumulated differences in family background and other influences, and are not primarily a measure of innate endowments; indeed, there is evidence that black-white differences in tests scores can be strongly affected by environmental influences….Second, like most of the existing IGM literature, our analysis is essentially descriptive in nature and one should be cautious in attaching causal interpretations to them. Third, all measures used in the present paper are based on relative positions and do not pertain to movements out of absolute thresholds such as from under the poverty line. However, our finding that there is no racial gap in mobility, conditional on cognitive test scores in adolescence, is new and merits further analysis to establish possible policy implications, such as the importance of early-life interventions relative to, say, access to affirmative action later in life…. We estimate the effect of AFQT scores on upward transition probabilities separately by race. Our dependent variable is the probability of leaving the bottom quintile. Figure 6 shows the result of this exercise. We find that conditional on AFQT scores, whites have only slightly higher likelihood of exiting the bottom quintile and that this gap does not vary a great deal across the AFQT distribution. For example, at the 25th interval of our normalized AFQT scores, the transition probability for whites is 0.63 and for blacks is 0.61, or a difference of just 2 percentage points. At the 10th interval, the gap is about 7 percentage points and at the 75th interval, the gap is about 15 percentage points. At no point in the AFQT distribution can we reject the hypothesis that the transition probabilities are the same….”

Debopam Bhattacharya and Bhashkar Mazumder, " A nonparametric analysis of black-white differences in intergenerational income mobility in the United States,"Quantitative Economics, 2011, https://onlinelibrary.wiley.com/doi/epdf/10.3982/QE69

Showing 82 database articles primarily about Test Scores