Education, Inequality, and Complementarities

Discussing Brink Lindsey’s outstanding New Republic piece on why the education premium isn’t drawing more people into higher education (about which more later), Yglesias says:

… nothing is going to change policywise unless people think that reconciling ourselves to ever-growing inequality is wrong and, therefore, we ought to be interested in ways to reverse the trend. Meanwhile, I think it’s not wrong to think of some of the aspects of our school system’s poor treatment of low-income kids as precisely representing affluent people gaming the system (by, among other things, withdrawing across jurisdictional boundaries which they then zone with large lot requirements and “overcrowding” rules so as to prevent poor people from moving there) to preserve positions of privilege for their children.

I think “gaming the system” is a bad way of looking at the structural barriers to the upward mobility of the poor created by the behavior of wealthier people. The problem is that (a) the reasonable motivation of the middle and upper classes to do the best they can for their kids and (b) the structure of our public educational institutions together combine to create a de facto barrier to the opportunity of poorer kids to get a decent education and subsequently a decent wage that really makes work worthwhile. There is no point in attacking (a). The problem is (b).

Here’s something sort of related that puzzles me. Suppose there is a growing premium for a more or less general high level of cognitive functioning. No matter how many people we train to achieve this higher levels of functioning, there will always be some kind of normal-ish distribution in it. Now suppose (this is the big hypothetical) the tendency of new technology is to increase the rate at which productivity increases as you move right across the distribution, and that wages tend to reflect productivity. In this scenario, we’ll get increasing earnings inequality no matter how well we educate people, i.e., even if we shift the whole cognitive functioning distribution to the right. Correct? Real economists?

Now this doesn’t really concern me, since this is a scenario in which everyone’s productivity, and therefore everyone’s wage rate, is rising, and I don’t care about inequality per se. I’m just wondering how much our world is like that, or is becoming like that.

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