Peter Levine

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June 22, 2006

roots of American inequality

The Economist has a useful article on inequality in America, but even more useful is the collection of academic papers on that topic that the magazine has provided online. I picked a paper by Miles Corak entitled "Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility" (pdf).

Corak's Table 2 tells a striking story. In the United States and the UK, half of a father's economic advantage is transmitted (on average) to his son. (The data are limited to males for technical reasons.) There is a very high monetary return from investing in college education: 18.9 percent in the US. And there is a high correlation between fathers' educational attainment and sons' performance on a standardized test. In Scandinavia, by contrast, less than one fifth of a father's economic advantage is transmitted to his son; there is a low rate of return to college (7.9% in Denmark) and not much of a correlation between fathers' educational attainment and sons' test scores. The other countries in the sample fall in between the US/UK and Scandinavia on all these measures.

Corak's data are consistent with a picture of America as a highly competitive society in which those who perform well in school win great rewards. The best performers are the hardest working and smartest young people; thus the system feels like a meritocracy. However, high-performers usually have well educated and wealthy parents.

There cannot be law of nature that academic performance is heriditary, since the father/son correlations are much weaker in Canada and Europe. Instead, I suspect that American parents are able to effect their kids' chances of success in the meritocracy by how they raise them.

For example, the size of a kid's vocabulary is a valuable resource in school, yet Betty Hart and Todd Risley have found that three-year-old children of professionals have larger vocabularies than the parents of three-year-olds on welfare. There are profound differences in the way language is used, by social class. These differences are attenuated in European societies where the state is more likely to provide good daycare and where schools aim at equality.

I also wonder whether middle-class American parents work especially hard to give their children competitive advantages, because they realize the high stakes. Annette Lareau has found that suburban adults (without regard to race) try to use every second of the day in a "strategy of concerted cultivation," to give their kids work- and school-related skills. Whereas working-class urban parents try to let their kids be kids--a strategy that would work much better in Sweden than in the USA.

Posted by peterlevine at June 22, 2006 08:15 AM

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