Conflicting Ernie awards?

Last night’s post on the economics of higher education included this (deliberately provocative) comment:

The efficient level of investment for a bright, hardworking young man (men being more likely to work full-time throughout their careers) is likely to be massively higher than for a middle-aged women of average intelligence filling in time after the kids have left home…

Kim at LP and most though not all the following commenters rise to the bait, demonstrating not my sexism but how their normative assumptions (men and women should be treated equally, with which I agree) over-ride their analytical abilities.

I was not passing any judgment on the relative ability of men and women. Indeed, women now significantly out-perform men at school. Nor was I commenting on appropriate gender roles. Men and women can make up their own minds on work and family activities and the split between them.

Rather, I was writing about a paper on the economic benefits of higher education, which for a given graduate are the hourly additional value they produce in the workplace compared to if they had not attended university multiplied by the number of hours they spend at work.

This issue cannot be anlaysed via my actual or supposed gender attitudes. For all the changes in social attitudes over the last 30 years, men are still significantly more likely to work full-time than women. This is true of graduates as well as non-graduates (there’s a graph from 2003 on p.9 of my FEE-HELP paper).

A combination of women’s part-time work and absences from the labour market mean that on average the total hours in paid work over a lifetime is significantly lower for women than men. These are perfectly legitimate decisions by women (and their partners), but they affect the economics of higher education investment. The answer to my point is not anything about me, it is statistics showing these things are not true.

In my example, I put in additional elements to crush the arguments of even the most fact-resistant feminist critic. Add in higher intelligence and additional 20 years of graduate earnings and we are talking about huge differences in average lifetime financial gain. These flow through into large differences in the amounts that can prudently be spent on initial education without pushing economic returns down to unsatisfactory or negative levels.

And it is irrelevant to my example (and my broader argument) that many women do work full-time for much or all their adult lives; under my system but not the UA/KPMG proposal they will also be able to make higher levels of initial investment. It’s the difference between investment determined individually and investment determined collectively.

One of the commenters at LP suggests I should be awarded an Ernie for sexist remarks. The last time I received one it was for suggesting that we needed to put more effort into educating boys so that there were more of them at university. When I inquired as to why this was worthy of the award, I was told that even though boys did badly at school they still ended up earning a lot more than women, and so my priorities were misplaced. Ironically, my second Ernie could be for asserting a fact that I was previously Ernied for overlooking.

43 thoughts on “Conflicting Ernie awards?

  1. LOL! Damned if you do and damned if you don’t

    The reality is that the wage gap is mostly (if not completely) due to women’s choices in employment. For instance, female doctors leave the profession at higher rates than male doctors and thus the investment per female doctor is much higher.

    Be careful or you might be seen to be asking for men to get charged higher tuition because of their superior earning power.

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  2. “Rather, I was writing about a paper on the economic benefits of higher education, which for a given graduate are the hourly additional value they produce in the workplace compared to if they had not attended university multiplied by the number of hours they spend at work.”

    The problem with the approach taken in the paper (as I infer it from this quote) is that it apparently does not attempt to take into account the positive externalities arising from the effect of higher education on the nature and quality of one’s activities outside paid employment. These include, amongst other things:

    * the likely greater contribution to social capital made by civic participation, voluntary activities of various kind, etc., by people with higher education than by those without;

    * the likely positive effect of higher education (and of past experience of professional employment) on parenting abilities, which will then have multiplier effects in the enhanced social, cultural and economic capabilities of the children of higher educated parents.

    There is also a non-trivial methodological difficulty involved in attempting to project, in aggregate, the respective levels of workforce engagement over the next forty years of the current generation of male and female university students. If there is one thing we can safely assume about gender-based patterns of work/family balance, it is that the future almost certainly will be different from the past.

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  3. Paul – The paper does mention various claimed externalities from higher education, but as these are often hard to measure and/or value in dollar terms they were not incorporated into the economic model.

    I agree fully that the historical labour force patterns they used in their model are unlikely to be precisely replicated in the future. While I don’t think modelling like this really has much value at all, within the inherent constraints of the enterprise it’s probably better to extrapolate forward the recent past than to build in other assumptions that have no foundation other than guesswork.

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  4. Ah, just accused you of being deliberately provocative over at LP, and now I read that you admit to it. So you are angling for a second Ernie!

    Paul has put my thoughts better than I could. This focusing on nothing but the economic benefits of education is just so one dimensional – a bit like recommending DDT because it’s such an efficient pesticide.

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  5. Unbelievable Andrew! I don’t know how you keep your sanity having to deal with such people. There are so few of these types on your blog that I’d been lulled into a false sense of security that society is principally made of up of a mix of (1) vaguely sensible people who care about policy issues and (2)everyone else, who may or may not be sensible but don’t much care about policy issues. I didn’t realise that there is a third category of people out there who care about issues but are just plain mad.

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  6. Rajat – How deluded you were! LP has had toxic comments for several years now, again showing that there is generally an inverse relationship between the quantity and quality of comments.

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  7. I don’t even know how they understand each other. I mean, what does this even mean?

    And wrt to the political identity stuff, the sample is so distorted by the gender imbalance that every bit of subsequent analysis cannot support the degree to which the results are generalised (not to mention a range of other issues with sampling). Yet there’s a quick switch to categorical inference which is unsupported by data which treated quantitatively is junk.

    Or this?

    Even if the point is taken that Norton set out to critique the economic returns of education, even his assumptions suggest that there are variable returns for individuals and the inference is there (though not stated) that these returns go beyond some sort of “earnings over the life course” argument. If he were to make that rigorously, he’d need to complicate the notion of a ’student’ doing a ‘course’ quite significantly. I agree that the example is mendacious and chosen deliberately to support the frame chosen. The non sequitur is clearly in the original piece.

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  8. I get what the first one is saying until the last sentence. As for the second, I thought I was the one saying we needed to ‘complicate’ the idea of a student (ie, they are not all the same). But overall it sounds like it is written in academic humanities dialect, so I am not sure what it is saying.

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  9. Reading LP as it is nowadays when sensible people like Steve Edney have left it makes me want to use the Cultural Studies and Womyn’s Studies departments of Australia for nuclear testing.

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  10. I thought the first sentence was saying:
    .
    “I don’t understand that it’s quite possible to get reasonable results from a survey even if the number of data points in each category happens to be different, so I’ll just say that it isn’t reasonable, despite obviously not knowing the first thing about simple statistics”
    .
    This is of course the cheapest criticism you can make of a study — like the type you read in bad first year lab reports. “The sample was not big enough”, “The sample was not perfectly random”, etc. Of course, unless you can say how either the sample size or the lack of random sampling might have changed the results, it’s just an ignorant comment. Worse still is that complaining about different numbers of items per group is plain silly. It’s like saying that if you have 100 brown chocolates and 1000 white ones, you cannot compare them because the number in each group is not the same.
    .
    and the second seems to reinforce this by saying:
    .
    “I don’t know how to do even simple quantitative research, so I’ll just say how bad it is. All that qualitative rubbish (which the survey had nothing at all to do with) is of course much better. People always come up with the truth (and this truth is always generalizable) in an interview after all”
    .
    This sort of a statement reminds of that thread of doom at Troppo last year which all started from a silly qualitative study, which must have been the truth, the truth and nothing but the truth.

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  11. I take it Jason’s stereotypically male violent comment is another deliberate provocation.

    Conrad – I was only enticed to read all that because the chocolates caught my eye. I’ll respond after I get back from the shop.

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  12. Didn’t have fair trade chocolate, so I went local, a brand called ALPHA – they make two kinds of chocolates, $1.50 each, one has an apricot in it, the other a plum. Delicious. David Jones has them.

    Wasn’t that survey a bit of meaningless fun? Who knows how many women replied – there would have been all those women who ticked the MALE box thinking that might mean their comments would be taken more seriously ……

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  13. Tell me if I am summarising this unfairly – a large number of Andrew’s critics are now blasting him for responding in economic terms to an economic report by KPMG on the economic benefits of higher education.

    These people are just breathtakingly stupid. What is the point of learning the unpronouncable names of conintental European poseurs and inserting them in footnotes in an essay if you don’t even have a grasp of basic logic?

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  14. Is markB serious with this comment?

    John – Can’t say I’ve encountered anyone “going to uni as a hobby” in 13 years of tertiary teaching.

    is mark intimating he gets around with the equivalent of a seeing eye dog?

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  15. “Is markB serious with this comment?”
    .
    I must admit that I have seen lots of them. Indeed, I did part of my own degree as a hobby. In addition, as a staff member, I do research in an area which is pretty much my hobby too, as appears to be the case with many (perhaps most) academics — it’s one of the benefits of working in universities over private industry if you are in an area where there is competition for your skills. It’s also what we tell kids at careers day: “Do something you enjoy”, and so the kids that like looking at bugs do biology, the kids that enjoy cars do mechanical engineering etc. . It seems to me that if you can combine the idea of “hobby” and “job” you can get a much more enjoyable job than if you think they are orthogonal.

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  16. This article is correct, except women do invest equally. But they invest in attracting those university-educated hardworking young men. This is why there is such a dearth of extremely smart/successful chicks in Australia. The pond is too small to provide adequate return on investment. That’s why they all move to the US, UK, Hong Kong, etc. And when we do consider Aussie sheilahs round these parts, their investments in education have been pretty megare. More piggy banks than capital.

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  17. Jason Soon (comment No 14) – the insertion of the names of the academic equivalent of Eurotrash into these people’s footnotes is precisely because they lack the logic, facts or any other intellectual equipment to argue with even a glimmer of conviction. In other words, “bullshit baffles brains”.

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  18. Many of the comments on LP seemed to miss the point.

    Some commenters seemed not to think that resources should be used in education in more productive, as opposed to less productive, ways. Strange.

    It was also interesting to read again that education shouldn’t be commodified. As pointed out by one commenter, educating takes resources and people are prepared to put particular resources into it. We make decisions about “value” in many circumstances – e.g. health care (and perhaps even value life) in deciding which drugs to subsidise and we “commodify” essentials such as water and energy.

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  19. Its pretty clear really. Do women want to spend time with the babies or at work?

    Whoever says yes to the former should be given a large and luxurious facility in the middle of every suburb where they can chat with similar women and look after the babies of those women who want to go to work.

    So maybe that’s the answer? Allow women to nominate themselves as ‘mothers’ or as ‘workers’, and give the future mothers options other than higher education. Perhaps community roles that require a nurturing spirit rather than an arts degree.

    University is full of women looking for fun and (eventually) a husband, with no serious intention to work. I don’t believe that public money should be wasted on such an expensive forum for activities that could be undertaken elsewhere, and in roles that actually make use of their mothering instincts.

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  20. But it raises a serious point I guess.

    Can lesbians be regarded as ‘motherly’?

    I honestly can’t see why not. Just as I have no problem with gay marriage and gay parenting (especially if parental licenses are mandatory) I think that lesbians would be allowed to make the same mother/worker choice as any woman.

    Perhaps a man could make the same choice to be a full time ‘mother’ (although he would have to be appropriately non-sexual and accepted by the women), and therefore a gay man too…

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  21. The offending comment:

    “This implicit assumption that students are homogenous pervades the report, but it is wrong. The efficient level of investment for a bright, hardworking young man (men being more likely to work full-time throughout their careers) is likely to be massively higher than for a middle-aged women of average intelligence filling in time after the kids have left home (helpful as these students are to tutors in actually doing the reading).”

    I don’t think this comment is offensive but I do agree with Paul Norton’s criticism of the underlying assumptions. In fact the assumptions are utterly simplistic while purporting to be objective and empirical. This criticism applies even if we confine our focus to economics. One reason for this is that Andrew ignores differential gender behaviours. Perhaps the best and most well understood example of the differential is in micro-finance for poverty relief in developing countries. It has been observed time and time again that micro-finance is only truly effective in bringing a community out of poverty if the money is given to women rather than men.

    Whilst Australia is not a developing country and genders are on a far more equal footing here than in most of the developing world (notwithstanding Comrade Kim’s infatuation with Sharia Law), I nonetheless suspect the economic benefits of funding a university place for a “working class woman of average intelligence who only ever works part time” will equal or exceed that of funding a place for a “bright hardworking middle class man”.

    Whilst it is undoubtedly true that many of my friends on the Left are woolly minded and impractical, it is equally true that Libertarians like Andrew (Classical Liberal be damned) tend to sometimes miss the big picture because of their narrow and reductionist faux empiricism.

    Other than that I think this is a great blog!

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  22. I can’t see how women having a higher likelihood of success in business ventures (assuming that is true in Australia as opposed to in a third world country) is enough to offset the other factors Andrew carefully highlighted in his example, these being: 1) Age, 2) Intelligence 3) Full vs part-time and 4) Hardworking vs filling in time. (There’s also the fact that most graduates tend to work as employees rather than start their own businesses.) You’re just going to have to reconcile yourself with the fact that in this particular example, the benefits from investing in the man are likely to be far higher than investing in the woman. This will not always be the case, but it is the case in this example. Why does that cause so much hand-wringing for lefties??

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  23. ” One reason for this is that Andrew ignores differential gender behaviours. ”

    I thought I was being criticised for assuming them! (That is, the guys go to full-time paid jobs, the women raise the kids while working part-time and usually leave the workforce when the children are young.) What goes on in the developing world, while interesting in itself, is not relevant to the post, which was about economic returns to higher education in Australia, not about constructing a global theory of gender divisions of labour.

    “I nonetheless suspect the economic benefits of funding a university place for a “working class woman of average intelligence who only ever works part time” will equal or exceed that of funding a place for a “bright hardworking middle class man”.”

    I’m prepared to bet you that woman’s weekly wage that you are wrong, simply because the effect of hours worked is so large. Unfortunately I cannot think of a data source that would prove the point conclusively enough for me to calculate and collect my winnings.

    The main interesting idea implicit in what you are saying is that because the financial prospects for a working class woman are relatively poor, her hourly premium on her likely alternative scenario (minimum wage or other low paid work) is probably higher than for the middle class male if they earn the same salary, because his cultural skills and social connections would secure better than minimum wage work even without further education.

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  24. “You’re just going to have to reconcile yourself with the fact that in this particular example …”
    This example wouldn’t be so objectionable if the conclusions acknowledged that income earned is just one way of viewing the benefits of education. By only always using that kind of analysis and those terms, the implication is that what you’re measuring is the whole or main thing to be considered. Other people don’t agree that it is.

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  25. “Why does that cause so much hand-wringing for lefties??”
    .
    Looking at the LP thread (which seems like the mirror of a Catallaxy thread, yet all they can do is complain about Catallaxy!), the reason is obvious as stated by Mecurius:
    .
    “proceeding to value future outcomes in terms of past conditions — are problematic, even suspect, and that this necessarily casts doubt on the conclusions.”
    .
    I think it’s because they don’t teach Bayes law anymore.

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  26. You miss the point, Andrew. The woman in your scenario is likely to use her newly available resources, financial and otherwise, to lift her children out of poverty in perpetuity, by ensuring they have higher expectations, greater confidence, better educational resources etc. Hence two or more people (depending on how many children she has) achieve an economic benefit that clearly exceeds the benefit that accrues to the middle class male.

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  27. I would posit that the reason the micro-loans worked so well is not because lending money to women is intrinsically better, but that women in those societies are so oppressed, and that the few who come forward for a loan are the cream that Andrew believes should be in university.

    In Australia, with our more equitable society, we are able to move closer to the tribal ideal. Where everyone can choose the path they want, including mothers. But that some women with the drive and intelligence should be given the right to become economic actors in their own right.

    NOTE: By tribal ideal, I mean a small group that must optimise the productivity of ALL its members, which depends upon their individual talents. Societies that oppress women are the complete opposite of this, and it is no wonder they remain in poverty…

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  28. The numbers in the KPMG report certainly display spurious precision, but many of their assumptions are reasonable in general terms, eg there is no evidence that gender roles will change substantially in the medium term, or that the earnings premium from going to university will decline at least for brighter graduates.

    Russell – I have never, ever, in the hundreds of thousands of words I have written on higher education said or assumed that financial benefits are all the benefits to be had from higher education. On the other hand, I don’t think that the argument that significant additional sums of public money should be spent simply because these benefits exist is very strong.

    Melaleuca – Presumably I missed the point because you did not make it until comment 34. However, it is a good point, quite possible though I have not see the empirical evidence to prove it. There could be something in the US literature.

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  29. Andrew, I didn’t say that you said it, I said that all your work implies it – a kind of dollars divided by numbers equals …. method you have for analysing things. In this post you went a little further and after applying your method asserted that a whole class of people were therefore not worth getting any of those dollars spent on them. Anyway that’s all typical of the different worldview of LPers and classical liberals – we value different things.

    I didn’t quite agree with Malaleuca – “your woman” was middle-aged with time on her hands, her kids have already left home – not so likely to be influenced by whatever Mum does now!

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  30. Malaleuca’s point doesn’t work for my example – I did not in any case specify the class of my middle-aged woman – but an inter-generational perspective is at least an interesting one in deciding how much to invest in younger people.

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  31. How about bringing it closer to home?
    Wouldn’t your point:
    “The efficient level of investment for a bright, hardworking young man (men being more likely to work full-time throughout their careers) is likely to be massively higher than for a middle-aged women of average intelligence filling in time after the kids have left home… ”
    apply in other areas, say, medical care. Even though we’ve invested quite a bit in your glittering academic achievements, Andrew, you are getting on. So, it might still be worth investing a few dollars in restoring you to good health, but howabout when you’re 60? Might we then better invest our health dollars in a younger person who will return our investment with 30 years more of productivity?
    When you’re 70 we won’t let you in the hospital at all – straight to the hospice.

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  32. I agree, not worth wasting any public money on my health care. Indeed, private health insurance and my own cash paid for most of my biggest hospital stay so far, and I expect that will be true for subsequent visits as well. Unlike the people at LP, I don’t want or expect state help.

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