November 22, 2024

As Men Lose Economic Ground, Clues in the Family

David H. Autor, a professor at the Massachusetts Institute of Technology, says that the difference between men and women, at least in part, may have roots in childhood. Only 63 percent of children lived in a household with two parents in 2010, down from 82 percent in 1970. The single parents raising the rest of those children are predominantly female. And there is growing evidence that sons raised by single mothers “appear to fare particularly poorly,” Professor Autor wrote in an analysis for Third Way, a center-left policy research organization.

In this telling, the economic struggles of male workers are both a cause and an effect of the breakdown of traditional households. Men who are less successful are less attractive as partners, so women are choosing to raise children by themselves, producing sons who are less successful and attractive as partners.

“A vicious cycle may ensue,” wrote Professor Autor and his co-author, Melanie Wasserman, a graduate student, “with the poor economic prospects of less educated males creating differentially large disadvantages for their sons, thus potentially reinforcing the development of the gender gap in the next generation.”

The fall of men in the workplace is widely regarded by economists as one of the nation’s most important and puzzling trends. While men, on average, still earn more than women, the gap between them has narrowed considerably, particularly among more recent entrants to the labor force.

For all Americans, it has become much harder to make a living without a college degree, for intertwined reasons including foreign competition, advancements in technology and the decline of unions. Over the same period, the earnings of college graduates have increased. Women have responded exactly as economists would have predicted, by going to college in record numbers. Men, mysteriously, have not.

Among people who were 35 years old in 2010, for example, women were 17 percent more likely to have attended college, and 23 percent more likely to hold an undergraduate degree.

“I think the greatest, most astonishing fact that I am aware of in social science right now is that women have been able to hear the labor market screaming out ‘You need more education’ and have been able to respond to that, and men have not,” said Michael Greenstone, an M.I.T. economics professor who was not involved in Professor Autor’s work. “And it’s very, very scary for economists because people should be responding to price signals. And men are not. It’s a fact in need of an explanation.”

Most economists agree that men have suffered disproportionately from economic changes like the decline of manufacturing. But careful analyses have found that such changes explain only a small part of the shrinking wage gap.

One set of supplemental explanations holds that women are easier to educate or, as the journalist Hanna Rosin wrote in “The End of Men,” because women are more adaptable. Professor Autor writes that such explanations are plausible and “intriguing,” but as yet unproven.

He disagrees entirely with the view of the conservative analyst Charles Murray, in “Coming Apart,” that men have become “less industrious.”

“We’re pretty much in agreement on most of the facts,” Professor Autor said of Mr. Murray. “But he looks at the same facts and says this is all due to the failure of government programs, eroding the commitment to working. And we’re saying, what seems much more plausible here is that the working world just has less and less use for these folks.”

Professor Autor’s own explanation builds on existing research showing that income inequality has soared, stretching the gap between rich and poor, and that a smaller share of Americans are making the climb. The children of lower-income parents are ever more likely to become, in turn, the parents of lower-income children.

Moreover, a growing share of lower-income children are raised by their mother but not their father, and research shows that those children are at a particular disadvantage.

Professor Autor said in an interview that he was intrigued by evidence suggesting the consequences were larger for boys than girls, including one study finding that single mothers spent an hour less per week with their sons than their daughters. Another study of households where the father had less education, or was absent entirely, found the female children were 10 to 14 percent more likely to complete college. A third study of single-parent homes found boys were less likely than girls to enroll in college.

“It’s very clear that kids from single-parent households fare worse in terms of years of education,” he said. “The gender difference, the idea that boys do even worse again, is less clear cut. We’re pointing this out as an important hypothesis that needs further exploration. But there’s intriguing evidence in that direction.”

Conservatives have long argued that society should encourage stable parental relationships. Liberals have tended to argue that the government should focus instead on improving economic opportunities. Jonathan Cowan, the president of Third Way, said the paper underscored that addressing social problems was a means to improve economic opportunities.

“If Democrats have as their goal being the party of the middle class, they have to come to the realization that they’re not going to be able to get there solely through their standard explanations,” said Mr. Cowan, a veteran of the Clinton administration. “We need to ask, ‘How can we get these fathers back involved in their children’s lives?’ ”

But some experts cautioned that Professor Autor’s theory did not necessarily imply that such children would benefit from the presence of their fathers.

“Single-parent families tend to emerge in places where the men already are a mess,” said Christopher Jencks, a professor of social policy at Harvard University. “You have to ask yourself, ‘Suppose the available men were getting married to the available women? Would that be an improvement?’ ”

Instead of making marriage more attractive, he said, it might be better for society to help make men more attractive.

Article source: http://www.nytimes.com/2013/03/21/business/economy/as-men-lose-economic-ground-clues-in-the-family.html?partner=rss&emc=rss

Bucks Blog: A One-Page Form to Compare College Aid Offers

Click to expand.consumerfinance.govClick to expand. (pdf)

In its latest effort to simplify consumer finance, the new federal Consumer Financial Protection Bureau has teamed up with the Department of Education to create a one-page financial aid “shopping sheet.”

The idea here is that a single sheet of basic information would help students and their families better understand the amount of financial aid they qualify for, and compare aid packages offered by different colleges and universities before deciding which school to attend.

The draft sheet (you can see it here; the agencies want public feedback on the format, and what changes would make it better) would help make the costs, and risks, of student loans clear before students have enrolled. It outlines the student’s total estimated debt and monthly loan payments after graduation.

Raj Date, who is leading the bureau, said in a statement that student loans can help make lives better by helping people access education. “But in these tough economic times,” he said, “the stakes have never been higher for students and their families to clearly understand the costs and risks of student loans.”

Student loans in the United States now appear to be the biggest source of household debt after mortgages. In part, that’s because more students are going to college, but it’s also because tuition is increasing.

The draft form includes the total cost of attendance, including tuition, fees, and other expenses; a clear distinction between scholarships, which don’t have to be repaid, and loans; a list of the different federal loans available to the student; the total estimated student loan debt at graduation; and the estimated monthly debt payments after graduation.

The bureau is also offering a new tool to help students who may be struggling to repay their college debt evaluate possible options.

Take a look at the form and the tool, and let us know what you think in the comments section.

Article source: http://feeds.nytimes.com/click.phdo?i=c0b911387e88a8ccf872c0c788aa36f1

Economix: Why College Brings a Huge Return

My column in the Sunday Review section makes the case for going to college and cites two just-released reports, one by two Georgetown University researchers and the other by two Hamilton Project researchers. Each report has some charts worth reproducing.

The opening chart in the Georgetown paper, by Anthony Carnevale and Stephen Rose, estimates the demand for and the supply of four-year college graduates, both past and future.

Center on Education and the Workforce, Georgetown University

The supply of graduates is easy enough to measure; it is simply the number of graduates. To estimate demand, the two economists look at the wage premium for graduates. When the premium is rising, demand is outstripping supply. When the premium is falling, demand is rising more slowly than supply.

Looking ahead, Mr. Carnevale and Mr. Rose use school enrollment to estimate supply. Future demand is trickier to estimate. Mr. Rose, by e-mail, explains:

Over the last 100 years, the growth in demand for college-educated workers has varied within a narrow range and averaged 2.8% increase per year. Given the current high penetration of computer technologies, this paper takes the conservative position that this growth in demand from 2010 to 2025 will grow by 2 percent per year.

The bottom line is that, unless the country begins producing more graduates, supply is unlikely to catch up to demand — and income inequality is unlikely to fall by much if at all.

The next chart, from Hamilton, estimates the annual return from different investments, including college tuition:

The Hamilton Project

I was surprised that two-year colleges had a higher return than four-year colleges, but Adam Looney, one of the authors, notes that tuition at two-year colleges tends to be very low.

And the fact that two-year colleges have a higher return does not mean it makes sense to stop after two years. The next two years of college still have a huge return. You can see this by comparing the total value of the two degrees, known in economic terms as net present value:

The Hamilton Project

The Hamilton researchers — Michael Greenstone and Mr. Looney — also offer a chart on lifetime earnings, which shows that a big part of college’s value is that it brings much larger raises over someone’s career:

The Hamilton Project

Finally, the Georgetown paper points out that the value of college is not merely that it’s necessary for many good jobs, like doctor, teacher, scientist or corporate executive. A college degree also often lifts people’s earnings in occupations that do not require a degree, like construction worker, day-care worker, plumber and secretary:

Center on Education and the Workforce, Georgetown University

My column and the chart that ran with it have more details on this last point.

Article source: http://feeds.nytimes.com/click.phdo?i=4b129f6a28ec4e4edaa5ebdb6f3397fa