Russ Roberts Asks an Easy Question

He writes,

There are lots of claims about inequality and what is really going on. But this chart makes whatever explanation you believe in harder to explain. Chew on it.

Nick Schulz and I wrote about what we called the Sergey Brin Effect. We pointed out that the “game” of income distribution has been re-shaped by immigration, assortative mating, and technology.

The chart the Roberts refers to shows major differences in trends by education category. It also shows that, controlling for level of education, women have done better than men. My guess is that this is due to technology. We have seen an increase in the comparative advantage of people who can get into well-protected credentials cartels or who can help companies formulate and execute complex business strategies. I think that explains the education-income trend. We have seen a decline in the comparative advantage of workers who are good at lifting, shaping, and applying finishing to metal but who are not so good at interacting with customers and co-workers. That also explains the education-income trend, but I think it also helps explain the male-female trend.

The chart also shows more earnings growth at the top of the education ladder. That, along with assortative mating by education, should really drive household inequality.

2 thoughts on “Russ Roberts Asks an Easy Question

  1. Thanks for the insightful article.

    Assortative mating has become a driving economic factor; two mate up and then go to the Establishment Center, ie Washington DC, or the Financial Center, ie New York, or to an Innovative Center, like Irvine, CA, Lone Tree, CO, or Broomfield, CO to work in technology, broadcasting, or research. And live in a community that becomes an economic monoculture devoid of low income people; the low income are gated out in the sense that there are no places for them to rent or buy.

    I like to think the offspring of assortative mates have clearer genetic presentation and become a better tablet for writing virtues upon.

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