Sunday, December 02, 2012

Talent pools

The Journal of Economic Perspectives is my all-time favorite journal.  Much of the good stuff is at the back with Timothy Taylor's "Recommendations for Further Reading."  I had not known about recent research by Pete Klenow.  Here is the abstract in the Fall 2012 JPE:
Pete Klenow reports some calculations about greater equality of opportunity and economic output in “The Allocation of Talent and U.S. Economic Growth.” “In 1960, 94 percent of doctors were white men, as were 96 percent of lawyers and 86 percent of managers. By 2008, these numbers had fallen to 63, 61, and 57 percent respectively. Skilled occupations have become more equally distributed across race and gender, as have earnings within occupations. The result is arguably better allocation of talent and human capital investment. . . . How much of overall growth in income per worker between 1960 and 2008 in the U.S. can be explained by women and African Americans investing more in human capital and working more in high-skill occupations? Our answer is 15% to 20% . . .White men arguably lost around 5% of their earnings, as a result, because they moved into lower skilled occupations than they otherwise would have. But their losses were swamped by the income gains reaped by women and blacks.” Stanford Institute for Economic Policy Research Policy Brief. July 2012. At
Letting merit dominate all other considerations is a very good idea.  Expanding the talent pool has many benefits.  It's always good to see the evidence confirm the expectation.

Good ideas are our only hope.  They usually win, but it often takes a depressingly long time.

This morning's LA Times includes various contributions that respond to concerns over the 7-billion world population mark.  Most of the writers discuss their ideas for more as well as more effective family planning.  But some of the really good ideas are not covered.  1. Economic growth prompts spontaneous family planning; and 2. More open borders by the population-poor countries would be a boon to the places that cannot get their institutions in order to facilitate economic growth; it would also refresh and replenish the talent pool of the receiving countries

Only one writer mentions economic growth and he sees it as a consequence of fewer people rather than the other way around.


Reader Larry Holt sends this update on fertility trends.

And the Dec 3 WSJ includes an op-ed:  "Obama vs. Silicon Valley on Immigration … Antiquated rules are causing a brain drain of skilled workers.

… Republicans in the House passed a bill that would expand visas for skilled workers, easing the waiting list that can be a decade or longer for technologists from populous countries such as China and India. It would repeal a law that limits visas from any one country to 7% of the total—a quota system modeled on the Asian Exclusion Act of 1924, which limited immigrants from any country to 2% of the number of people from that country already in the U.S. as of 1890."