Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Wednesday, June 22, 2005

Interview with Heckman

The Emirates Economist has excerpts from an interview with James Heckman. Here are some very brief snippets, but his excerpts are well worth reading even if you don't read the entire interview.

Race. Markets do many useful things, but they did not solve the problem of race. Not in America. That's probably heresy to admit it as a Chicago economist, but I became convinced that a doctrinaire notion that markets would solve the problem of discrimination is false. Civil rights legislation and civil rights activity played huge roles in eliminating overt segregation in the United States. On the other hand, I also believe that affirmative action in the post-civil rights era has played very little role in elevating the status of blacks.

Early Childhood Intervention. Enriched early intervention programs targeted to disadvantaged children have had their biggest effect on noncognitive skills: motivation, self-control and time preference. We know that there's a scientific basis for this finding.

Job-training programmes. Cognitive skills such as IQ can't really be changed much after ages 8 to 10. But with noncognitive skills there's much more malleability. That's the point I was making earlier when talking about the prefrontal cortex. It remains fluid and adaptable until the early 20s. That's why adolescent mentoring programs are as effective as they are. Take a 13-year-old. You're not going to raise the IQ of a 13-year-old, but you can talk the 13-year-old out of dropping out of school. Up to a point you can provide surrogate parenting. [I wonder how much -EclEco]
Also from the FRB interview,

Genetics and the environment. If you have an aggressive child in an affluent family, the child will get treatment, will be taken to a psychologist. Parents will take special care to override or suppress the behavior. An aggressive kid in a poor family is far less likely to receive such treatment. If his parents themselves are aggressive, they may in fact exacerbate such problems. So there are genetic predispositions, but they're always manifested through an environmental interaction.

Heterogeneity. When we look at individual data, we see very diverse behaviors. Some people react positively to schooling, for instance, and some people respond negatively. Some people react positively to job training; some negatively. There's a distribution of responses.
and there is much more there. Craig Newmark steered me to the comments at Cafe Hayek, and Arnold Kling points out what seems to be a pretty strong slap from Heckman at Steven Levitt:

In economics there's a trend now to come up with cute papers in an effort to be cited as many times as possible. All the incentives point that way, especially for young professors who seem risk-averse rather than risk-taking after they get tenure. In some quarters of our profession, the level of discussion has sunk to the level of a New Yorker article: coffee-table articles about “cute” topics, papers using “clever” instruments. The authors of these papers are usually unclear about the economic questions they address, the data used to support their conclusions and the econometrics used to justify their estimates. This is a sad development that I hope is a passing fad. Most of this work is without substance, but it makes a short-lived splash and it's easy to do. Many young economists are going for the cute and the clever at the expense of working on hard and important foundational problems.
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