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Goldin and Katz and Education Policy Failings in Historical Perspective

  • Arnold Kling
  • John Merrifield
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    In The Race Between Education and Technology, Claudia Goldin and Lawrence Katz employ a powerful theoretical framework to investigate how inequality is affected by the interrelation between changes in technology and changes in job-market skills. The investigation is carried out with great vision and a combination of scholarly methods. In this review essay, we embrace the theoretical core of the book, but find a number of problems in the execution. We see a need to distinguish between attending school and acquiring the pertinent skills; we criticize the way that Goldin and Katz talk about “years of schooling†as a continuous variable, when the underlying phenomenon is that the combination of high school graduation rates and college attendance rates increased more slowly after 1970 primarily because of a slowdown in the former, a slowdown which was arithmetically driven by the fact that high school graduation rates can only go up to 100 percent. We criticize the way they break up time periods in a way that buries the productivity acceleration of 1990-2005. This increase in productivity growth suggests that in the race between education and technology the speed of the latter is more important than the slowdown of the former. We see a need to recognize the profound institutional changes that occurred during the twentieth century, for their consequences can help to explain why the populations’ skills are not “keeping up†with technology. Finally, Goldin and Katz make a reasonable argument that the wage premium for college graduates would be lower if more young people earned qualitymaintained college degrees. However, at the margin, sending additional students to college probably does little or nothing to increase the number of successful college graduates.

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    Article provided by Econ Journal Watch in its journal Econ Journal Watch.

    Volume (Year): 6 (2009)
    Issue (Month): 1 (January)
    Pages: 2-20

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    Handle: RePEc:ejw:journl:v:6:y:2009:i:1:p:2-20
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