(2007-06-01) Cowen Income Inequality Education And Tech

Tyler Cowen on how Income Inequality is tied to competing effects from Progress (technology) and Education. College graduates have been gaining relative to high school graduates. But competition from immigrant labor accounts for only 10 percent of the change in the wages of unskilled workers, relative to the skilled, since 1950. (College Education)

Jun15 update: Roger Lowenstein surveys the history of Income Inequality, also looking at Education effects. The point of taxing, as Becker is quick to point out, isn't to confiscate: it's to raise revenue for things that will benefit society, in this case helping those at the bottom. Though such thinking is a good argument for further expanding the EITC., which rewards people for working, in the long run you want to get folks moving up the skills ladder, so fewer people are in need of wealth redistribution. That this hasn't happened is rather a conundrum. The incentives are certainly there. College grads make more than 40 percent more than high-school grads. Those with postgraduate degrees earn twice as much. To Becker, this is a good thing; it offers an incentive for people to pursue education. The trouble is, it hasn't worked. The Americans that Freeman once called overeducated are plainly undereducated today. Only about a third of the population graduates from college. Among the poor, there has been only a very slight increase in college-graduation rates.