Chong Xiang and Stephen Ross Yeaple write,
First, the U.S. has very high output per worker. The abundance of resources makes the low U.S. PISA scores even harder to justify. Second, the employment share of cognitive occupations is relatively low in the U.S., implying weak incentives to accumulate cognitive human capital. The effects of resources and incentives thus offset each other, leaving the U.S. ranking in cognitive productivities very close to its ranking in PISA scores, near the bottom in our set of 28 countries. In our Introduction, we discussed the worries and concerns about the quality of the U.S. educational system. Figure 3 quantifies these concerns and shows that they are well justified, when we look at the cognitive dimension.
,,,the U.S. indeed has a comparative advantage for noncognitive skills
As I understand it, they show that the proof of this comparative advantage is that a lot of our labor force is engaged in occupations that are classified as “non-cognitive” but with high productivity. I found the paper difficult to follow, so I won’t comment on this interpretation.
The Rising Return to Non-Cognitive Skill
http://ftp.iza.org/dp10914.pdf
Theory 1 – tests like PISA only matter if the people taking the tests care about them.
People care a great deal about the ACT or the LSAT, and so those tests will tend to represent a “best effort”. PISA?
Theory 2 – problems associated with scale (the US vs Singapore) and heterogeneity. Don’t compare the US (325 or million) with Singapore (5 million). What are the PISA scores of the top 1%, top 10%, in the US vs other places?
Another explanatory angle — a small percentage of US human resources, with outlier cognitive skills, produce the bulk of the total value added? So income/wealth inequality can be explained by cognitive skill inequality.
Took me a couple of looks to finally get the definitions.
I see it as hiring bosses and workers, the two groups almost decorrelated. Then I got a two phased dynamic, we can’t hire workers until we hire bosses. So we have a limit cycle in labor supply, when labor gets resorted, we lay tlabor off and hire the bosses first. Then the bosses do the hiring.
I don’t understand mathematical economics, but reading the text, I see some big issues:
The authors don’t take physical or financial capital into account, and assume that productivity is determined primarily by efficiency in use of human capital (both cognitive and non-cognitive). This assumption, quite frankly, makes their paper bullshit.
“Our model shows that test score and output may move in the opposite direction, because there are multiple types of human capital and heterogeneous individuals respond to policy changes by changing the types of human capital they accumulate.” This statement requires more ignorance than merely ignoring physical capital causes.
The authors offer no hint as to what they consider “non-cognitive human capital”, and assume that whatever it is, is entirely a function of the individual. Social trust is a counterexample for that assumption. It’s not physical capital, so it’s fair to call it human capital, but it’s a function of how individuals generally relate to each other, not a specific capability of a person.
I believe, as the authors do, that there are human factors beyond intelligence which influence economic productivity, but the first thing that needs to be looked at when examining the issue is how non-human factors influence production, so they can be separated out.
I was going to put the following in the Jason Collins on self-discipline post, but comments are closed there, and I figured the topic is semi-related to “non-cognitive human capital”:
It’s interesting to notice that many highly effective and productive people these days seems to need to implement some kind of elaborate and personalized system and routine to help with discipline and self-control. (It brings Scott Adams’ “Systems not Goals” insight to mind.)
To resist distracting temptations these days really takes something beyond even high level of conscientiousness. That is, even if one is firing one both nature and nurture cylinders, achieving “time consistent preferences” in our modern environment also takes a kind of ‘auto-paternalism’ approach of active management and avoidance of vice through planned denial of one’s future self.
The trouble is that all the money is in vice and distraction (to win scarce attention), and in line with Paul Graham’s “accelerating addictiveness” thesis, many recent social media enterprises seem to have evolved to satisfy the desires for these vices and distractions, something illustrated by this circulating image.
I think this is a real challenge to Libertarian thought, which is really just an updated form of the old conservative paternalistic argument about the problem of temptation into habitual, self-destructive behaviors, but perhaps made more compelling and urgent by increasingly severe circumstances and progressively more powerful and neurologically stimulating offerings.
And the way they explain their own discipline systems, and observe many talented and promising individuals failing to reach their potential though their incapacity to overcome their own temptations, I would think that many elite Libertarians would personally appreciate the troubling nature of the issue. Every commercially offered product and experience will eventually become as ‘drug-like’ and cheap and intense as it can be.
It’s becoming harder and harder to find people who have what it takes to resist a world full of Sirens. At least Odysseus only encountered them in one place and could tie himself to the mast and have his crew stop up their ears only temporarily. Now we carry the Sirens around with us as our only constant companions.
Jason Collins’ regiment is impressive and admirable. That it is both necessary and beyond the capacity of most of the population should give one pause.