November 15, 2002
How Far Does the Apple Fall From the Tree?

Alan Krueger points out in the New York Times that Americans' basic fundamental belief in rugged individualism and in control of your own destiny is--to a greater degree in America than in other countries--false. We seem to have less equality of opportunity than most other industrialized countries: "a child born in the bottom 10 percent of families ranked by income has a 31 percent chance of ending up there as an adult and a 51 percent chance of ending up in the bottom 20 percent, while one born in the top 10 percent has a 30 percent chance of staying there and a 43 percent chance of being in the top 20 percent." Why? Because of the intergenerational transmission of "cognitive ability... educational level... race, geographical location, height, beauty, health status and personality..."


The Apple Falls Close to the Tree: ... Perhaps the only legitimate use of the intergenerational correlation in income is to characterize economic mobility. The data challenge the notion that the United States is an exceptionally mobile society. If the United States stands out in comparison with other countries, it is in having a more static distribution of income across generations with fewer opportunities for advancement. Anders Björklund of Stockholm University and Markus Jäntti of the University of Tampere in Finland, for example, find more economic mobility in Sweden than in the United States. Only South Africa and Britain have as little mobility across generations as the United States.


Full Text of Alan Krueger's Piece

Posted by DeLong at November 15, 2002 03:14 PM | Trackback

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Comments

He might have mentioned the intergenerational transmission of wealth pure and simple, as well as the access to opporunities and education which come to those who have some family money. I've seen talented people drop out of school and never come back because they were $2000 short. In some families that's not going to happen.

Posted by: zizka on November 15, 2002 03:01 PM

On the one hand, yes, intergenerational transmission of wealth is indeed a source of inequality of opportunity. That's a caveat that Democrats could make a valid issue, if they could articulate it in the form "wealth is good; let's make it easier for everybody to get it" rather than "the rich are evil".

On the other hand, when somebody cites "cognitive ability... educational level... race, geographical location, height, beauty, health status and personality..." as being unfairly distributed, I have to wonder whether inequality of opportunity is being confused with inequality of result. They're not the same.

We can try to have a level playing field, but to keep Michael Jordan from winning most of the basketball games, we'd probably need to lame him and blind him in both eyes. Does Michael Jordan's clear superiority at making money to most of the rest of us actually represent inequality of opportunity, or an inequality of result arising from reasonably fair competition? And what, other than genetically engineering ourselves, can or should we do about it?

Posted by: Erich Schwarz on November 15, 2002 03:54 PM

I don't believe the conclusion that parents predispose their children to a level of economic performance. Where is the apple and where is the tree? Let me be more specific I know enough anecdotal information where very wealthy families are totally dysfunctional and/or have schizpphrenic children and the like and the dynasty cannot continue. Then many foreign born and second generation children from rich cultures such as Chinese and Indians succeed wildly in America even when they have parents who have menial jobs.

Posted by: on November 15, 2002 04:09 PM

I don't believe the conclusion that parents predispose their children to a level of economic performance. Where is the apple and where is the tree? Let me be more specific I know enough anecdotal information where very wealthy families are totally dysfunctional and/or have schizpphrenic children and the like and the dynasty cannot continue. Then many foreign born and second generation children from rich cultures such as Chinese and Indians succeed wildly in America even when they have parents who have menial jobs.

Posted by: on November 15, 2002 04:09 PM

Genetics probably plays a big role in determining the future success of off spring. The society can only provide opportunity.

Posted by: on November 15, 2002 04:17 PM

Excluding ziska, these comments are a bunch of crap.

Jordan is obviously an exception. Citing his ability to refute general findings about intergenerational economic mobility is stupid. And it's not about "predisposition", it's about opportunity -- which our society is *not* providing.

Posted by: J on November 15, 2002 04:42 PM

I find the conclusion of the Swedish and Finnish researchers that Sweden has more income mobility than the US to be laughably counter-intuitive. So, my question - has Alan Krueger read their paper? Or, are there any economists handy who can comment on the reputation of these two, or the quality of this particular bit of research?

Or has Alan Krueger simply put "Google" to good use?

As to sensible interventions (other than ending apartheid), poor folks are often forced to send their kids to poor public schools. Don't let the NEA learn of this. And never, ever mention Milwaukee, or means-tested school vouchers.

Posted by: Tom Maguire on November 15, 2002 04:53 PM

The Björklund and Jäntti paper mentioned in the article isn't hard to find on the web. What I find interesting in there: mobility is lower when income inequality is higher. That's true comparing nations. That's true comparing two time periods in the US, before and after the recent increase in income inequality.

Of course, fighting income inequality is typically done with transfer payments. One of the arguements against transfer payments (to those of lower income) is that it will undercut their incentive to achieve. I presume the theory is that driven to achieve they will climb out of poverty. We've run the experiment! We reduced the transfer payments. If mobility declined.

The good news is that the classic road to richs, i.e. steal it, appears to be making a comeback.

Posted by: Ben Hyde on November 15, 2002 05:14 PM

Hmm, if it is not hard to find, I bet it would not be hard to provide a link to it. Ifound this one:

http://swopec.hhs.se/hastef/papers/hastef0098.pdf

From the abstract:

This paper compares income inequality and income mobility in the Scandinavian countries and the United States
during 1980-90. The results suggest that inequality is greater in the United States than in the Scandinavian countries
and that this inequality ranking of countries remains unchanged when the accounting period of income is extended
from one to eleven years. The pattern of mobility turns out to be remarkably similar, in the sense that the proportionate reduction in inequality from extending the accounting period of income is much the same. But we do find evidence of greater dispersion of first differences of relative earnings and income in the United States. Relative income changes are associated with changes in labor market and marital status in all four countries, but the magnitude of such changes
are largest in the United States.

s the the paper you are citing as showing mobility is lower in the US?

Regards,

Posted by: Tom Maguire on November 15, 2002 05:52 PM

"I find the conclusion of the Swedish and Finnish researchers that Sweden has more income mobility than the US to be laughably counter-intuitive."--Tom M.
"What I find interesting in there: mobility is lower when income inequality is higher."--Ben H.
Speaking from a strictly armchair perspective, these both seem pretty intuitive. The U.S. has more inequality than Sweden. That means it takes a bigger dollar amount boost to go from the bottom to the top in the U.S. than it would in Sweden.

The money quote (ha ha) from the paper you link, Tom, seems to me this:
"mobility of earnings is lower in the United States than in the Scandinavian countries. By contrast, mobility of market and disposable income is higher in the United States than in Denmark. However, mobility in the distribution of market and disposable income in Sweden is higher than in the United States." (p. 10).

I'm not an economist, though, so can't say whether this really should be intuitive, or whether the quote means what I think it does.

Posted by: Matt Weiner on November 15, 2002 08:32 PM

>>"... more economic mobility in Sweden than in the United States ... "<<

I am always a bit puzzled by people who think they demonstrate much about policy by comparing Sweden, with its rather homogenous population of all of 8 million, to the USA with its population of 285 million of hugely disperse origins, background, and resources.

It tempts me to compare Europe (with Turkey, Spain, Sicily, the troubled bits of Germany, et. al. ) to New Hampshire and conclude policy-wise that "live free or die" looks pretty good.

>> ... What I find interesting in there: mobility is lower when income inequality is higher ...<<

Perhaps if the magnitude of the income distribution is small a modest change in income will take one through all the quintiles, while if the magnitude of the income distribution is large even a larger change in income won't. Then the population where people experience the objectively largest changes in income could have the smallest changes in relative terms.

If that population has the broadest income distribution because its top and median are higher than in the low-distribution population, and its income changes are larger in objective terms as well (if not in relative terms) then it wouldn't be self-evident to me that it is the worse off income-distribution wise. (Especially if median income in the narrow-distribution population is steadily sliding downward in the international standings. Perhaps due to something related to the narrowness of its income distribution. )

Posted by: Jim Glass on November 15, 2002 08:58 PM

Yet again, nobody mentions consumption distribution -- and the really interesting paper on it reported in the same NY Times just last week, by Virginia Postrel (11/7/02). To wit:

~~
... To see how well-being is distributed, consumption provides a better long-run picture than income.

In a paper titled "Does Income Inequality Lead to Consumption Inequality?" Professor Perri [Stern/NYU]and Dirk Krueger, an economist at Stanford, look at the distribution of consumption from 1972 to 1998. The article, now a National Bureau of Economic Research working paper, can be downloaded at http://pages.stern.nyu.edu/~fperri/research.htm...

"We wanted to see whether this rise in income inequality had in fact given rise to an increase in consumption inequality," Professor Krueger said. "We were fairly surprised that it hadn't."

The economists expected consumption to fluctuate less than income, since people can save in good times and borrow in bad times. But the results were far more marked than they anticipated: Even as the distribution of income changed significantly, the distribution of consumption barely budged.

A common measure of how spread out the income distribution is (the standard deviation of the log of after-tax labor income) increased 20 percent, while the same measure for consumption rose only 2 percent.

To take a single comparison, the poorest 20 percent of Americans made about 6 percent of all income in 1972-73 but only 4 percent in 1997-98. That substantial drop did not show up in their spending, however. It stayed flat, at about 9.2 percent of total consumption.

Or consider the ratio between the top and bottom. In 1972-73, the top 10 percent of earners made about five times as much as the bottom 10 percent. In 1997-98, they made more than nine times as much — a sharp increase that, again, barely shows up in spending. The top 10 percent of households spent about three times as much as the bottom 10 percent in 1972-73, a ratio that inched up to 3.35 in 1997-98.

These results are particularly striking because the income figures include only wages and government benefits. Spending, by contrast, can come from all sources of money, including the stock market returns and other investment income enjoyed mostly by the wealthiest Americans. The high investment returns of the 1990's do not seem to have notably widened the spending gap between rich and poor.

It is hard to see the effects of increasing income inequality in how people actually live...
~~~

Now if all this discussion about income distribution is supposed to reflect concern about welfare, then surely consumption distribution deserves a at least a *mention* -- certainly in comprehensive discussions of it like Prof. Krugman's recent Sunday Times piece. I'd think that especially those people who are most worried about the widening income distribution would be the happiest to have some evidence that the bottom line really isn't so bad.

Yet it never seems to get mentioned at all. It seems like a lot of people don't want to be bothered by a consoling thought.

Posted by: Jim Glass on November 15, 2002 09:19 PM

"I am always a bit puzzled by people who think they demonstrate much about policy by comparing Sweden... to the USA."

I don't think I've demonstrated anything about policy; just that the Krueger's claims about this don't seem obviously wrong to me; so I'm not inclined to discount his claims that US income mobility is lower than we used to think. (Also, I realize that you may not have meant to criticize me.)

About the broad income distribution: I've been thinking about an argument that poor people in one society may be made worse off when the rich get richer, even if they get no poorer. The idea is that you don't want to be bidding against deep-pocketed people. Think what happens when a bunch of dot-com millionaires (or whoever) move into your neighborhood. Fire away, folks.

Posted by: Matt Weiner on November 15, 2002 09:26 PM

This reminds me of the debate a few week's back when it was revealed (by the IMF) that Italy had a higher GDP per hour than the US.

Essentially lots of Americans going 'NO WAY. WE'RE THE BEST'

Now we learn that the US has the worst chance of getting out of your income class (except for Britain -- Shocker!). And all anyone can say - Tom Maguire -- is IT CAN'T BE TRUE. THEY MUST BE LYING.

Posted by: Matthew on November 16, 2002 03:02 AM

"[Michael] Jordan is obviously an exception."

Why?

If "J" really has data to substantiate the assertion that Jordan is "obviously" an exception, then he should inform the authors of the article that sparked this discussion that the unfair distribution of "cognitive ability... educational level... race, geographical location, height, beauty, health status and personality..." is not merely unfair but impossible. That should clear things up.

Also, he or she should publish those data. I absolutely guarantee that a rigorous demonstration that nurture is the only variable in human competence and that nature has no significant effect would easily be publishable in _Nature_, _Science_, or any other top flight journal in my field of molecular biology.

Or "J" could just admit that Jordan's a fantastically annoying anecdote, and also admit that he or she has no flipping clue if Jordan's actually an "exception" or not.

Equality of opportunity does not necessarily mean equality of result. Where there are substantial differences in competence, equality of opportunity will result in *in*equality of result. When we look at inequalities of static outcomes, it is not a given that we are observing inequality of opportunity. (Nor is it a given that we're not -- as I was at pains to concede in my previous post...)

But if you admit that there are real differences in human competence, then you can no longer have a simple one-dimensional moral spectrum where unequal outcomes are easily classified as simply unfair. You have to allow at least two dimensions to morality, one of which will indeed be fairness, but the other one of which will be something variably called "freedom" or "excellence".

There really isn't any political party in the U.S. right now that seems able to say all that without developing a massive case of brain jamming -- more's the pity.

Posted by: Erich Schwarz on November 16, 2002 03:14 AM

Erich--
I'd think it's pretty obvious that Michael Jordan is a statistical outlier. His degree of talent at basketball relative to the average person's is much greater than most people's degree of talent at what they do relative to the average person's. Agreed? (Also, discussions of Jordan tend to focus on inborn talent and ignore his ferocious work ethic. This starts with professional sportswriters and isn't your fault, but reflects some unfortunate racial typing.)

In any case, you should click through to the Krueger article. Transmission of cognitive ability and educational level accounts for at most three-fifths of intergenerational transmission of economic status. Note that educational level can be a matter of opportunity as well as ability. See zizka's comment; and, regardless of ability, someone is more likely to get into Harvard if her parents went there.

Also check Arthur Goldberger's argument:
"Even if the father-son correlation is high because traits that affect earning power are inherited, well-designed interventions could still be cost effective and improve the lot of the disadvantaged. To take an extreme example, the correlation in incomes between fathers and sons was high in South Africa under apartheid because race is an inherited trait." (Krueger's words)

We just don't know how much nature and nurture play in this, except perhaps for the three-fifths cap. I think that's why Krueger ends by saying that perhaps the only conclusion that can be drawn is that the US isn't as mobile as we thought.

(In case anyone's keeping track of who said what, "Matthew" and I are different people.)

Posted by: Matt Weiner on November 16, 2002 06:02 AM

I live in an upper-middle class neighborhood near a research university (OHSU in the Portland West Hills). I can think of half a dozen ne'er-do-wells from upper-class families who are still in the neighborhood. One has no degree and hasn't had a full time job in the 43 years of his life. All are downwardly mobile but still are somewhere in the middle class (probably lower) without any talent, effort, or skills on their part. All would literally be street peopel if they didn't have strong financial support from their families.

I have also known or known of many poor, unskilled immigrant families who made sure that their kids were successful, and I have known upperclass families who insisted that their children succeed. The dynamic described by Krueger is not imaginary, and leftists do exaggerate property-inheritance as a factor, but I was boggled that krueger seemed to ignore that factor entirely.

Portland's schools are unionized with a strong union. Schools are still good but under heavy attack by anti-tax know-nothings. This is one of the last cities in the country where M.D.'s and PhD/'s send their kids to public schools. And these schools have given opportunity to the immigrants I spoke of.

Blaming teachers unions for bad schools in bad neighborhoods is mostly demagogy. It may be a major factor in some inner cities, but underfunding schools, especially schools in poor neighborhoods or poor towns, is a bigger factor. (Yes, I know there are counterexamples). I did a back-of-envelope study (using world almanac statistics) of funding versus results. Of the ten states with the best results, all but North Dakota and Utah funded their schools well. (Two states with many factors not replicable elesewhere, such as the desire to get the hell out of North Dakota). Of the states that funded education best, all but two (Connecticut and D.C., a state in this survey) got good results.

Differential funding of public education according to the income of the parents (as shown by place of residence) is a veiled form of property inheritance, reinforced by the state.

Posted by: zizka on November 16, 2002 07:12 AM

I'm adding the closing italics tag as a service to humanity.

Posted by: The Messenger on November 16, 2002 07:27 AM

Oops, it didn't work. Sorry.

Posted by: The Messenger on November 16, 2002 07:29 AM

I'm adding the close italics tag for the sake of humanity.

Posted by: non on November 16, 2002 09:06 AM

Hey, all you consumption heads! Did you read the Krueger and Perri paper? If you did, you will have noticed the following details:

1. Only households are compared. There is no attempt to accomodate the increasing percentage of two income households over the last 30 years.

2. Two income households have increased mandatory expenses as compared to single income households. Transportation, clothing, food, child care.

3. Therefore, no conclusion that households are "better off", "the same", or "worse off", can be drawn from the paper.

4. And most damning, it seems that consumption, according to the paper, is fueled by increasingly easy access to credit. It seems we're on a consumption binge fueled by debt, lucky us.

You consumptives need a better argument than this.

Posted by: Russell L. Carter on November 16, 2002 09:47 AM

If we are going to spend time on the exceptional case of Michael Jordan it seems only fair to spend some time on the exceptional case reported in this New York Times article http://tinyurl.com/2r4r

Posted by: Ben Hyde on November 16, 2002 10:27 AM

OK, Matt W and Jim G have persuaded me that my intuition was, at best, addressing a different question. Suppose Society A has a mean income of 25K, with a standard deviation of $500, and Society B has a mean income of 25K with a standard deviation of $10K (OK, we need to get to a log-normal distribution, but set that aside).

It would not be possible, without more information, to be sure that Society A has more income mobility than B - however, it would not be surprising if it did. So, in the sense of moving amongst the quintlies, I was laughably wrong myself. However, moving across quintliles scarcely changes one's lot in life, so it is an odd notion of mobility.

In terms of the ability to improve one's position in life, Society B seems to offer the better alternative - good if you win, bummer if you lose. This may be why you read more about ambitious young folks leaving Sweden (or Europe generally) for the US than the opposite.

I am totally behind Jim G's point that small, homogeneous Sweden does not make much of a benchmark for the US.

Now, Russell, *cough* "consumptives"? Perhaps a segue to uncertainty about emerging epidemics: TB or not TB. What was the question?

Zizka - I agree (with myself, anyway, and I think you, too) that a good education system is the key to opportunity for the next generation. Funding is an issue, as is local control. I don't like to "blame" the teacher's union - they did not create this problem, and if they disappeared we would not have a clear path to a solution. However, thay seem to be one of the obstacles to experimentation.

Now, the other obstacle to equality of opportunity - say it with me - health care! For reasons to numerous to mention.

That would give us a lot of material to slug it out on. However, I am sort of stuck in the entrance - is the paper I linked to the defintive source on superior Swedish income mobility, and are we still taking it seriously?

Regards,

Posted by: Tom Maguire on November 16, 2002 10:29 AM

Another aspect of Jordan's rise was the existence of tremendously strong local basketball cultures all through the U.S. with a very low entry cost. Basically you need some kind of shoes, some kind of hoop, and a reasonably good ball. Many great players started playing on the streets with substandard equipment (don't know if Jordan did). So on the playgrounds parks, and in the high schools and colleges you have a training ground where someone like Jordan could hone his skills for free. If Jordan had been born in, for example, in Bolivia, he might have ended up a great soccer player but probably not a basketball player. On the other hand, if he's been born in Serbia, Lithuania, or Croatia, he might be just as good as he is -- though his style might be different. Jordan learned basketball by playing against good players who mostly didn't make the pros.

One reason why Jordan is an outlier is that basketball gives very high incomes to very few people. So out of 10,000 pretty good neighborhood players, maybe 1000 play in high school, 100 in college, and 1 in the pros. (Besides the NBA there are a few dozen leagues which pay a wage running from OK to pretty good).

Posted by: zizka on November 16, 2002 11:12 AM

I've seen talented people drop out of school and never come back because they were $2000 short.

Given the ubiquity of student loans, that is something I've never seen...and I come from a blue collar, public schools all-the-way background.

Posted by: George Zachar on November 16, 2002 12:24 PM

"In any case, you should click through to the Krueger article."

I did. And I've been (perhaps atypically) at pains to try to be fair by admitting that there *is* some degree to which genuine inequality of opportunity exists.

Please note, though, that "at most three-fifths" depends on the ideological freedom from bias of the writer -- maybe that means "two-fifths plus or minus one fifth", but it might also mean "three fifths, but we're Goddamned if we can stand to say that without a qualifier like 'at most'".

I recognize that Jordan's work ethic is also an issue, but I'm not sure that weakens my point. It seems to me that the issue here is whether there exist differences of ability that will render the work ethic of one person qualitatively more effective than that of another person. If we concede that there are, then the issue of equality of result versus equality of opportunity remains.

And yes, I recognize that Jordan himself is rare! Duh! BUT, it seems to me that it would be improbable if the distribution of human ability were like this:

[huge undifferentiated mass] ... [1 Jordan]

It seems more likely to me that there are many instances of innate human ability being unequally distributed that are less fantastically conspicuous than Michael Jordan himself, but that nevertheless have a nontrivial effect on outcomes. (For one thing, that sort of 'bell curve' is much more consistent with what little is known about the genetics of human populations -- we're a highly polymorphic species with a big, complicated genome, so most innate variation is expected to be quantitative and statistical in nature.)

Posted by: Erich Schwarz on November 16, 2002 01:43 PM

"This may be why you read more about ambitious young folks leaving Sweden (or Europe generally) for the US than the opposite."

I met one of those Swedes, at a Caltech party some years ago. He was at JPL, which meant that he was doing the most advanced work in unmanned space exploration in the world -- either as an engineer or as a planetary scientist. His story was that he'd left Sweden because he'd been an A student ... and that this had gotten him no end of misery in the Swedish public schools, where the socially approved goal was to be an average student, not a chronically good one.

That by itself is merely an anecdote. But if it's a genuine instance of something that's actually happening, then, yes, Sweden and the U.S. aren't automatically comparable, in part because ambitious Swedish malcontents end up moving here!

Posted by: Erich Schwarz on November 16, 2002 01:50 PM

"His story was that he'd left Sweden because he'd been an A student ... and that this had gotten him no end of misery in the Swedish public schools, where the socially approved goal was to be an average student, not a chronically good one."

This is simply garbage, utter jingoistic garbage.

Posted by: on November 16, 2002 02:12 PM

From time to time I hear that America is the only country that is an idea. (Taking our host's advice, a Google search on "America is an idea" shows 348 results -- and I am sure there are many other phrasings.)

When I see people respond to criticisms of America by pointing to Michael Jordan and to stories by expatriate Swedes working at the JPL, I think "America is not an idea, America is an anecdote".

[OK. I admit that cheap jibes make no better arguments than anecdotes do, and that just as much could probably be said about Canada (where I live) and the UK (where I grew up). I just couldn't help myself.]

Posted by: Tom Slee on November 16, 2002 02:44 PM

I'm sure that there are public schools in the United States -- hell, even private schools -- where A students are looked upon with disapproval. Though the stereotype that in school the jocks are viewed upon with great social admiration while the quiet, A-student kids are scorned might be a bit exagerrated, it certainly isn't baseless.

And in Sweden, what makes you so sure that similar phenomena don't happen? Swedish schools are different than Americans ones, of course, but I don't see any specific reason why some Swedish nerds might feel isolated by their work ethic and academic achievement. It happens here, and I'm not anti-American jingoist.

Julian Elson

Posted by: Julian Elson on November 16, 2002 02:49 PM

George Zachar: How old are you? Things have definitely gotten worse since I graduated (1980). The shift to loans over grants, plus increases in tuition, also means that some graduates end up $20,000 or more in debt for a bachelor's degree with no immediate cash value at all.

By "talented" I did not mean "Harvard quality". I meant "capable of doing college level work and working as a high school teacher". Loans do not seem to be as ubiquitous as you say, or perhaps some people don't get the word. Some of these students have family obligations. At my alma mater, Portland State University, a so-called urban university, students do not typically go full time and graduate in four years, and a high proportion work, some of them full time.

Posted by: zizka on November 16, 2002 02:59 PM

the socially approved goal was to be an average student

This has been reported in other cultures as well.

Posted by: George Zachar on November 16, 2002 03:20 PM

The value of a complete educaton so overwhelms $2,000 that a banker would be a fool to not make such a loan.

Of course, individual circumstances will always vary, as will our life experiences.

Personally I've never seen a case, not once, of someone capable of acquiring an undergraduate degree and failing to do so ONLY because the money was an issue.

The main impact of financial differences I see is in school selection, and sometimes in the time span required to get a degree.

some graduates end up $20,000 or more in debt for a bachelor's degree with no immediate cash value at all...

And, of course, a student must choose a field of study that makes financial sense, if money is an issue for that student.

Posted by: George Zachar on November 16, 2002 03:34 PM

"I met one of those Swedes, at a Caltech party some years ago. He was at JPL, which meant that he was doing the most advanced work in unmanned space exploration in the world -- either as an engineer or as a planetary scientist. His story was that he'd left Sweden because he'd been an A student ... and that this had gotten him no end of misery in the Swedish public schools, where the socially approved goal was to be an average student, not a chronically good one.

That by itself is merely an anecdote. But if it's a genuine instance of something that's actually happening, then, yes, Sweden and the U.S. aren't automatically comparable, in part because ambitious Swedish malcontents end up moving here!"

- I really don't see any truth in this. As a Swedish citizen (even though I'm now living in Milan,Italy) I made my way thru the Swedish public schools and do not have the same experience, even though being an "A-student".

One fact is that Swedish, and Scandinavian people, move around a lot compared to most other countries. During university for example it's extremely common to go abroad for one or two semesters (most people want to go to Britain and Australia), so some Swedes will naturally enough end up in the US too.

But that social mobility is very high in Scandinavian countries is something that has turned up in several research papers. Why? Well, I don't really know. But I guess the fact that university is free for everyone and that the state gives everyone an opportunity to support themselves with subsidies and loans during university has something to do with it.

I also think this is closely connected to the fact that poverty (relative) in Scandinavia are the lowest in the world.

It's quite a different society to the US: You won't get as much money as an academic in Sweden, since marginal taxes are circa 50% for people with high incomes, but on the other hand it's almost "impossible" to end up on the street or starve or similar things. Which I was so stunned to see the first time I went to Los Angeles (I have never seen so many homeless or obviously poor people in my whole life before).

So some people are complaining in Scandinavia, mostly business-people with very high incomes, but that there should exist some kind of brain-drain problem is not true at all.

Posted by: Mikael S on November 16, 2002 04:01 PM

Zachar --

I'm not talking about people who were greedy for money. I'm talking about people who worked hard and went into debt getting through college and ended up working in copy centers and coffee shops. Money "was an issue for these students" in the sense that they needed to pay rent and buy food, and hoped to buy a car and a house.

Hardly anything is ever the sole reason for anything. I have seen people for whom financial problems were a major factor in ending their educations. I have also seen people who got second and third chances because their parents could cough up the bucks.

I am starting to believe that "what you've never seen" is partly a function of your not looking. Maybe you were studying too hard to notice your fellow students. (I'm not kidding: highly-motivated people tend to abstract themselves). I question your knowledge of banker behavior too. "A banker would be a fool not to give the loan". I doubt you are a loan officer, somehow.

As far as Sweden goes -- I grew up in a conservative household and I've been hearing about the immanent collapse of Sweden since about 1960.

Posted by: on November 16, 2002 07:15 PM

Lack of opportunity in the US compared with more equal societies is what you must expect. Why is it so hard for people to grasp that extreme inequality of outcomes makes equality of opportunity impossible? As the old Dylan song goes "money doesn't talk - it swears". Where most of the resources of a society are held by a small group, that group is going to want, inter alia, their children to get a big head start over other people's. Where politics can be inluenced by money, policy in all sorts of fields will reflect this. Which is why the rising income inequality and the rightward political swing of the last twenty years in the US are mutually reinforcing.

So even if you believe (as I more or less do) that inequality of outcomes per se is OK, you can still want it limited to preserve equality of opportunity. Which is why I think there is at least one area of the economy - education - where socialism has produced consistently better social outcomes, in spite of its undoubted technical inefficiency.

Posted by: derrida_derider on November 16, 2002 09:38 PM

After seeing Gore-Bush 2 years ago, I cannot imagine a runoff for president of the United States with such a prism of opportunities as it happened in Brazil (of all countries)

(1) the rightward leaning candidate is the son of a foreign-born fruit vendor, who lived a few years of his youth underground, before going into exile and getting a Economics PhD degree from Cornell.

(2) the leftward leaning candidate is a pragmatic former lathe-operator, child shoe polisher, union leader, middle-school drop-out, migrant from the miserable Northeast to Sao Paulo, the Brazilian equivalent of a black Mississippi migrant to Chicago.

... the other top 2 candidates were a radialist from small town Rio de Janeiro state who climbed his way to Rio governorship with evangelical populism, including infamous faith-based initiatives (say, a radialist from Buffalo turned NY state governor)... and the governor of Ceara (say it Iowa), a small state politician, the only of the 4 top candidates coming from a politico dinasty, albeit a small town one.

---------------------------------------

Posted by: onOpportunities on November 17, 2002 01:27 AM

I'm talking about people who worked hard and went into debt getting through college and ended up working in copy centers and coffee shops.

I envy your acquaintances. I had to clean toilets to pay for college.

Money "was an issue for these students" in the sense that they needed to pay rent and buy food, and hoped to buy a car and a house.

I bought my fist home 7 years after I graduated, and my first car 18 years after I graduated.

Perhaps the issues are expectations and not realities?

I have also seen people who got second and third chances because their parents could cough up the bucks.

You mean their parents had worked and saved? This is intended to imply a lack of fairness? I am banking every nickel against my childrens' future education needs. Is that a slight against my kids?

I am starting to believe that "what you've never seen" is partly a function of your not looking.

Well, I personally was on finacial aid, scholarships and loans. And the kids I interview for Cornell now often need financial aid. And my ongoing conversations with other folks in higher ed keep me reasonably up-to-date.

I doubt you are a loan officer, somehow.

I invest in, among other things, bank stocks, so I am somewhat familiar with their business models and opportunities.

I grew up in a conservative household...

WELL THERE'S YOUR PROBLEM RIGHT THERE!

I grew up with one parent (unknowingly) in a socialist front organization (the Workmens' Circle) and the other in the famously liberal ILGWU. :)

As far as Sweden goes..

Instapundit.com often has a running commentary about Sweden, and recently pointed out that Sweden's per cap GDP is under that of the average US African-American, and IIRC, under that of Mississippi.

Posted by: George Zachar on November 17, 2002 06:04 AM

Instapundit's Sweden story has been pretty well debunked. Sometimes if something seems counterintuitive it's because it's not true.

The people I was talking about were working at close to minimum wage after graduation, not just while going to school. I, too, have cleaned other people's toilets for pay, if that is to be the ticket of admission for this discussion.

I have noted that the children of left-wing schismatics often do well academically. (Grandson of a Communist dockworker teaching science at Harvard, etc.)Leftists are better than anyone at deferring gratification. Some also seem to develop counter-dogmatisms.

It seems very likely to me that you are a better, more determined person than the individuals I am talking about who left school, and I suspect that that was your point. (I've had this argument before). The point I was trying to make was that the people I know would have been better off, and society too, if they'd had more family financial help. I was making a comparison between two more or less equal individuals, one with family support and one not, with the suggestion that public support should be better. Within the group without family support, the best (yourself) do rise to the top.

What we're talking about (me, anyway) is the degree to which the greater success of the children of successful people is because these children are themselves simply better, and the degree to which it's a function of greater financial support from the parents. Apparently you have no problem with the second, either. Will you be angry (as Dinesh D'Souza apparently will be) if the talented son/daughter of some ne'er-do-well has opportunities equal to those of your own (equally talented) son/daughter? We started of talking about the relationahip between equality of opportunity and equality of result, and now it seems that you're not so sure about equality of opportunity either, since it penalizes parents who saved. With this we're pretty far down the slippery slope already, in my opinion.

Cornell has far better financial aid than PSU. It is also not a place where you would expect to find students dropping out for the lack of $2000. PSU is. Cornell students also look better to bank loan officers. It was actually no more expensive to send my son the a quality east coast school (Tufts) than to PSU (a far inferior institution), where he did spend one year.

Posted by: zizka on November 17, 2002 09:08 AM

I've had this argument before

Really?

Posted by: George Zachar on November 17, 2002 09:34 AM

Instapundit's Sweden story has been pretty well debunked.

Link, please.

Leftists are better than anyone at deferring gratification.

Now, *that* would make an interesting psych thesis!

It seems very likely to me that you are a better, more determined person than the individuals I am talking about who left school, and I suspect that that was your point.

How gracious of you to accuse me of being a preening narcissist. That contributes a great deal to the analytic value of this thread.

it seems that you're not so sure about equality of opportunity either, since it penalizes parents who saved.

Actually, that hadn't dawned on me. Thanks for not only pointing it out, but attributing the idea to me when I clearly said no such thing.

BTW, if your name is on the website your sig links to, I couldn't find it.

Posted by: George Zachar on November 17, 2002 09:44 AM

I am pseudonymous and think that's fine. This was argued at length on "shadow of the hegemon" and elsewhere. I have some very fragile career hopes which might be negatively impacted if I were to become known as the author of my website. There is a long honorable tradition of anonymous/ pseudonymous pamphlateering in the liberal West.

I didn't say "preening narcissist". However, as has happened more than once before in my arguments on this topic (it seems to be characteristic of conservative arguments), you changed the theme of the discussion from a comparison between two groups, students with family money and students without, to a comparison between yourself and the people I knew who quit school. When you brought your personal biography into a fairly general argument, what other reason could there have been?

I didn't say that you were like D'Souza. I asked if you were. I think that my very tentative speculation about your position was a pretty reasonable extrapolation from "You mean their parents had worked and saved? This is intended to imply a lack of fairness? I am banking every nickel against my childrens' future education needs. Is that a slight against my kids?"

Anyone who wants to believe that the Swedes are as miserable as the Mississippians is free to do so. They may have less spendable income per capita and an upper limit to their aspirations in that direction, but they don't have the insecurity, malnutrition, lack of medical care, lack of access to education, etc., etc., that Missisippians (and many Americans) have.

Posted by: zizka on November 17, 2002 11:06 AM

Me, qualifying a story I'd been told by a Swede: "That by itself is merely an anecdote."

Anonymous reply: "This is simply garbage, utter jingoistic garbage."

Uh ... yes, Mr. Anonymous, it'd be jingoistic garbage if I were lying, or if I'd hallucinated this. But my recollection is that the story I've told here did happen. What do you want me to do, lie about having observed it?

"Let a certain note be struck, let this or that corn be trodden on -- and it may be a corn whose very existence has been unsuspected hitherto -- and the most fair-minded and sweet-tempered person may suddenly be transformed into a vicious partisan, anxious only to 'score' over his adversary and indifferent as to how many lies he tells or how many logical errors he commits in doing so." -- George Orwell, "Notes on Nationalism".

Posted by: Erich Schwarz on November 17, 2002 12:08 PM

I had been merely responding to the notion that my ideas were mistaken, as I was thought to not have direct knowledge of living with limited means. Now, I stand accused of bragging.

As for husbanding your self-characterized "very fragile career hopes" via anonymity, I do hope that's not you listed as the site owner, via betterwhois.com.

Posted by: George Zachar on November 17, 2002 12:26 PM

" Will you be angry (as Dinesh D'Souza apparently will be) if the talented son/daughter of some ne'er-do-well has opportunities equal to those of your own (equally talented) son/daughter?"

This is the first left-wing thing on this thread I've seen that I find myself agreeing with. Thanks. It makes a caveat that I was trying to make (to no avail, sigh), but it puts it more clearly than I did.

It seems to me that this is a genuine dilemma and that there's no one right answer. If somebody works hard, saves their money, and then gets *all* the surplus taxed away in order that the child of goofuses can have exactly the same opportunities as their own children, that is in some sense fair and a promotion of equality of opportunity. In another sense, though, it's mortally infuriating, and I can't imagine anybody peacefully putting up with it.

No doubt if I were a tranquil Swede rather than a jingoistic American I'd feel differently -- but I wasn't making up that JPL story, and at *some* point, if you have confiscatory levels of taxation, you're going to pay a societal price. Saving money to give our children good things is one of the most basic things human beings do, and trying to outlaw it completely is about as smart as trying to outlaw sex.

And yet ... yes, if we want equality of opportunity, we should want a situation where being born to incompetent parents doesn't put a low ceiling on one's own life. There's no such thing as an undeserving five-year-old, even though there's also a very strong desire by many people to specifically care for their own five-year-olds.

I don't have any particularly brilliant answer to this. I do note, however, that it is not a problem that is automatically solved simply by being Sweden. The Swedes limit immigration, in order to keep the benefits of their own society to some restricted number of people, so one could argue that they curb individual preferences in caring for children while maintaining a societal preference in which children they allow to exist within their social welfare system.

I also note that, despite the advantages that can be given to people by rich parents, having rich parents does not by itself guarantee a child anything in particular besides having lots of money. Harvard and Caltech no doubt have rich children attending their undergraduate and graduate schools, but most of the people I met in either place were in the much-maligned American middle class. Being rich does not automatically make one a genius, or every rich man's children would in fact be geniuses. This brings us back to that "unfair" distribution of unequal talent I was harping on.

Posted by: Erich Schwarz on November 17, 2002 12:30 PM

Yes it is me. I have no illusions that I can't be tracked down, as you so nicely just did. I just don't want any notoriety I might end up getting from my zizka site to jump right up in the face of someone judging my merits in the other area. The people I am dealing with are not going to do a Spanish Inquisition on me.

To the extent that I insinuated aspersions on your personal character I apologize. ALL of my several arguments on this topic have ended up with this same personal thing though: "If I could make it, why couldn't they?" Well, there are only two answers: either the conditions weren't really the same, or else you were a little sharper, tougher, and more determined than they were. The point I'm trying to make is the contrast between all the various people who have to struggle through school, and the ones who just plain don't. And as a matter of social policy, I think that that contrast should be reduced (though it can never be eliminated), but I think that as a society we're moving in the opposite direction.

More generally, right-left arguments often end up with the attempt by the right to move from the general to the personal: "If you had a homocidal maniac beating down your door, wouldn't you want to have a gun?" "If your brother was murdered, wouldn't you favor the death penalty?" (In the second case, my brother was murdered and my answer is no.)

I worked until recently at a medical school/ research institute. (More evidence there. A look at the Portland phone book will clinch it. You will also have to try to figure out what my hoped-for career field is, and then you'll be home). The majority of the medical students come from favored backgrounds. Almost all seem to have been very well taken care of all their lives. They spend summer break in Cancun, not working for money (though many of them do practicums of various sorts).

Posted by: zizka on November 17, 2002 12:57 PM

right-left arguments often end up with the attempt by the right to move from the general to the personal...The majority of the medical students come from favored backgrounds. Almost all seem to have been very well taken care of all their lives. They spend summer break in Cancun, not working for money..."

Are you sure you didn't mean "attempt by the left"?

Posted by: George Zachar on November 17, 2002 01:06 PM

No, I obviously meant the right, as I explained in my text. "If I could do it, why couldn't he". "What would you do if...?" etc., displacing the discussion of general principle.

Whether it's my fault or yours, this has indeed become too personal.

I do not find this communication of yours to be within the limits of civil discourse:

"As for husbanding your self-characterized "very fragile career hopes" via anonymity, I do hope that's not you listed as the site owner, via betterwhois.com."


Whether I also stepped outside those limits is for others to say.

Posted by: zizka on November 17, 2002 01:30 PM

No, I obviously meant the right, as I explained in my text. "If I could do it, why couldn't he". "What would you do if...?" etc., displacing the discussion of general principle.

Isn't citing the alleged leisure of some med students in Cancun similarly "displacing the discussion of general principle" with the personal?

And please forgive me for being unable to resist the irony of someone citing the "long honorable tradition of anonymous/ pseudonymous pamphlateering in the liberal West," and then registering his material transparently in his own name.

Posted by: George Zachar on November 17, 2002 01:45 PM

'Instapundit's Sweden story has been pretty well debunked.

Link, please.'

The mentioned study was produced by a conservative think tank for the last Swedish election. It's an extremely dishonest piece of work; my look at it isn't the best, but it'll suffice.

A quick summary: "family income" is a horrible measure for comparision of the US and Sweden, because family size, workers per family, and hours worked are all much smaller in Sweden than in the US. Back-of-the-envelope adjustments for all three categories makes Swedish income look about the same as that of the US.

Posted by: Jason McCullough on November 17, 2002 02:00 PM

George:
Let us hope and pray that you do no suffer any financial reverses and find yourself a middle-class working guy with no savings account by the time your kids get to school!
I have worked in Universities all my professional life. I have had student assistants drop out because their parents made too much money to qualify them for loans but their grades were not A-level enough for scholarships. At least one would have made a fantastic elementary school teacher...which was her whole ambition in life.
(BTW, on the first sentence: that's another kid's story. His father's company crashed and took all the family's retirement; the father was "overqualified" after 25+ years on the job, so they ran through all the family savings before he found another job paying less but unfortunately putting him over the cut off point).
Me, I would like your kids to get an education anyway, but hell, I'm a bleeding heart liberal...

Posted by: Emma on November 17, 2002 02:48 PM

"Instapundit.com often has a running commentary about Sweden, and recently pointed out that Sweden's per cap GDP is under that of the average US African-American, and IIRC, under that of Mississippi."

- That research paper has been quite heavily discussed in Sweden among certain groups. The big problem is that it is "research" done by a couple of hacks from certain pro-business lobby groups with very low credibility.

How did they get their result? They choose to compare "household incomes" without adjusting for different sizes in households. Particularly if you compare with a society like the Swedish one this makes the result more or less wortheless. Sweden has the highest share of single households in the whole world, well at least among the countries where we have reliable statistics. The US still has a very traditional society in this concern with people living together and getting married in a much larger extent than Sweden.

It's enough to change to median or average income to get a completely different result. So the conclusions you're refering to is not scientific research, it's political propaganda. This of course would have been very clear if the so called researchers spent at least ten minutes to do proper sensitivity analyses, but this was not interesting for them, since they got the result they wanted.
And then we should remember that more or less the biggest reason to why per capita GDP is higher in the US than most European countries is because Americans work a lot more. The LIS database has updated GDP per hour figures for all of you that are interested.

Posted by: Mikael S on November 17, 2002 03:38 PM

Emma: Thank you for the kind thoughts. But I cannot fathom, based upon what I posted above, why you would feel compelled to express them.

Posted by: George Zachar on November 17, 2002 03:40 PM

Mikael S and Jason: Thanks for the Sweden de-bunking.

Posted by: George Zachar on November 17, 2002 03:43 PM

"Harvard and Caltech no doubt have rich children attending their undergraduate and graduate schools, but most of the people I met in either place were in the much-maligned American middle class."

Erich S.--How do you define middle class? As an undergraduate at Harvard, I seemed to be no richer than most people around me, yet my family's income at the time was well above the U.S. median. I count as middle class, but perhaps in the sense in which 90% of Americans count as middle class (or below).

Really, if we're to have meaningful discussion of this, we need a look at hard statistics, not "The people I see are middle class" (which is a criticism of what I just said, just as much as you).

In any case, entry into Harvard and Caltech isn't the end point here. Those Harvard undergraduates whose families control large firms will on average wind up with higher incomes than the others, regardless of talent. When I was there, Eliot House, which was considered the preppy dorm, made up shirts that said, "Lowest GPA---Highest starting salary."

Posted by: Matt Weiner on November 17, 2002 05:16 PM

Incidentally, I'm not sure that anyone on this thread has advocated confiscatory taxation, or turning the U.S. into Sweden. I would be happy if our dear readers came away with these:
(1) The U.S. does not have as much income mobility as was once thought.
(2) A large degree of this is due to inequality of opportunity, in a way that is Not Fair.

What is to be done is left to the reader. Suggestion: Even if there is no way to create equality of opportunity, it might be possible to make life easier for those who are at the bottom of the income distribution.

Seeing that the income distribution is due in part to an opportunity distribution might make that seem more imperative.

Posted by: Matt Weiner on November 17, 2002 05:24 PM

As for why some of us on the left like to bring up Sweden--Nathan Newman puts it well:

"Sweden remains that uncomfortable reality for conservatives across the world-- a high tax welfare state that delivers the social goods and good employment for its population. So much for the idea that only neoliberal wannabe governments can keep electoral power today."
(link; scroll down to "Sweden stays left." The post above that has some good stuff and links concerning Sweden vs. Mississippi.)

I think that Sweden really hurts the European TINA-ites more than American conservatives; it demonstrates the falsity of "There Is No Alternative." Not to mention that American liberals come nowhere near to advocating Swedenization.

Posted by: Matt Weiner on November 17, 2002 05:34 PM

If Sweden is doing a splended job from a social opportunity/justice perspective, does it thus see a large flow of immigrants eager to partake? And if yes, how good a job is that nation doing of folding them into its fabric? If no, why?

Posted by: George Zachar on November 17, 2002 05:51 PM

The CIA sez GDP per capita (NOT per houshold) is almost 50% higher in the U.S. than in Sweden. ($36,300 vs. $24,700).

Last I heard, African Americans in the U.S. make about 60% as much as the American average (though it might be that they make 60% as much as white Americans). So, (mean) African Americans, I think, would be a bit poorer than (mean) Swedes, though the difference between Swedes and African Americans is smaller than the difference between Swedes and average Americans.

Net Migration in the U.S. is 0.35%, and net migration in Sweden is 0.095%.

But, of course, comparing GDP and income and such is a rather silly approach to comparing countries. I could say "Sweden is richer than El Salvador. El Salvador's politics are right of Sweden's. Leftist politics cause immensely better economic performance." The fallacy of ignoring historical circumstances is obvious there, but one must also remember that, in the context of Swedish and U.S. economic performance, I doubt Sweden has EVER been as rich a country as the U.S. The question is, has the gap been narrowing or widening? (I think it's been widening over the medium term: since the 1970s or so, but someone should probably check me on that.)

Julian Elson

Posted by: Julian Elson on November 17, 2002 08:57 PM

'If Sweden is doing a splended job from a social opportunity/justice perspective, does it thus see a large flow of immigrants eager to partake? And if yes, how good a job is that nation doing of folding them into its fabric? If no, why?'

Admittedly, this is the big problem with using Sweden as a model; they basically don't let anyone in. I don't think it's fatal, but still.....

Posted by: on November 17, 2002 11:28 PM

"Admittedly, this is the big problem with using Sweden as a model; they basically don't let anyone in. "

Not really.
Please check hard stats for immigrant population.
(If you did, you would know that Switzerland is more of an immigrant country than the US) - I do not know about Sweden hard numbers although.

Posted by: Swedish debunker on November 18, 2002 02:44 AM

I think Russell Carter's pots from 11/16 needs to be addressed: The argument that consumption statistics points to less inequality and more movement between income deciles has to do with the life-time model of expected earnings. If people accurately gauge their lifetime earnings potential, then the consumption statistics indicate that there is a lot more movement between deciles and higher fluctuations in incomes than is commonly assumed. I just don't see how smaller household sizes play in this, at least without further detail. Are households smaller in lower income deciles? If they're in fact larger, isn't that an argument that income inequality is even less than assumed?

I suspect we are going to need much more sophisticated analysis than we have to advance with this problem.

Was anyone else bothered by the use of the phrase "end up as" Krueger? He needs to be more specific and precise than that term. Does "end up as" mean in retirement, at 50, across their lives?

Posted by: JT on November 18, 2002 12:03 PM


'Not really.
Please check hard stats for immigrant population.'

Could you provide a pointer? Google's not giving me anything.....

Posted by: Jason McCullough on November 18, 2002 02:17 PM

"How do you define middle class? As an undergraduate at Harvard, I seemed to be no richer than most people around me, yet my family's income at the time was well above the U.S. median. I count as middle class, but perhaps in the sense in which 90% of Americans count as middle class (or below)."

Good question.

I am not an economist (wow, was that hard to guess!) but if asked for my own rule of thumb, I'd define middle class as the three central fifths of income-per-household distribution. That's broad but not unreasonably broad for the U.S. It certainly fits Aristotle's definition of "those who have the goods of life, but in moderation."

My family was in the middle class in terms of net income throughout my being in college. On paper we were rich because my father ran his own advertising agency, but not much of that money was his to keep -- those who have had to run their own private businesses will understand that immediately, others will just have to take my word for it (or not).

I'm still paying off my college loans, but hope to get them finished before 2003 (which is a bit hard to believe at this point). I'm not a particularly hard-luck case by any means, I hasten to add; I knew people who had far less support than I got and who left Harvard with truly scary amounts of debt.

The "lowest GPA -- highest starting salary" thing sounds painfully familiar. Guess things haven't changed much since the mid-80s. On the other hand, of the people I knew in college who've since gone on to do work I've admired (and envied), none of them were coasting on future good-old-boy connections of any sort.

Posted by: Erich Schwarz on November 18, 2002 02:53 PM

"The "lowest GPA -- highest starting salary" thing sounds painfully familiar. Guess things haven't changed much since the mid-80s. On the other hand, of the people I knew in college who've since gone on to do work I've admired (and envied), none of them were coasting on future good-old-boy connections of any sort."

Mid-80s? Ouch! Ouch! Ooh, that hurts!

I graduated in '92, actually. This was the beginning of the end of Eliot as preppy house, theoretically, because they were starting to randomize house choices. (Non-Harvard types, please ignore.)

Substantively, I wouldn't expect people coasting on old-boy network connections to do work I admire; they might, however, do more remunerative work than people of equal talent without connections.

(I also read something interesting by Calvin Trillin a while ago about how he discovered that going to Yale had been helpful in helping him break into the writing biz. Of course, Trillin isn't an example of someone who inherited his acceptance to Yale.)

Posted by: Matt Weiner on November 18, 2002 04:37 PM

After a long staring match with Google, I have a few articles and charts addressing the question of Sweden as am immigrant destination point. I expect my own deplorable right-wing tendencies will shine through, but I will try to do a bit of balanced excerpting. (AS IF!) As a second disclaimer, these all strike me as reasonable articles, but there seem to be xenophobic sites out there (Volksfront?), and I do not rule out the possibility that I have stumbled across Sweden's answer to Pat Buchanan, or worse. Honest error.

An historical overview:

In the aftermath of World War II, an even larger industrial labor shortage spurred the "importation" of foreign labor from other European countries, marking the beginning of modern Swedish immigrant history. It was during this post-war period that immigration to Sweden began to comprise national groups from outside of Europe, as well.

From the 1950s to the early 1970s immigrants had relatively higher labor participation than the rest of the population.

...Until the mid-1970s Sweden had an exceptional economic growth rate with one of the highest labor market participation rates in the world. Combating unemployment was given high priority and it was for many years kept low by international standards; usually the employment rates between foreigners and the indigenous population were comparable.

...However, immigrant labor rates started decreasing in the mid-70s, and the gap between the indigenous population and immigrants continued to increase considerably in the past decade, partly due to the recession that began in 1990. During the first half of 1998, the unemployment rate for non-Nordic citizens was 28.3% and a relatively mild 5.7% for the "Nordic" population (the Nordic countries are Sweden, Denmark, Finland, and Norway). Overall, a harsh labor situation has prevailed for much of the 1990s --with half a million jobs having disappeared, very large labor market policy programs, high registered unemployment, and insufficient demand for labor -- is expected to continue over the next few years.

A bit on lifestyles of the poor and foreign:

Many of the foreigners in Sweden live in apartment blocks built in the 1970s in the suburbs of major cities; these suburbs were designed to be bedroom communities; most offer few jobs. The consequence is unemployment. For example, 50 percent of the residents of Rinkeby near Stockholm receive welfare benefits, unemployment and criminality are far higher than average, and many employers refuse to hire Rinkeby residents.

This sounds very much like the Muslim communities on the outskirts of many French cities, based on an article I read elsewhere.

Chart of Immigrant Population:

Sweden, 1997: Swedish Citizens 8,325,576

Aliens (Overall) 522,049

Migrants come from:
Nordic countries 162,221

Other Europe 180,001

Africa 27,873

North America 14,605

South America 18,385

Asia 103,264


TOTAL 8,847,625

Note: Note: From the mid-60s to the present, about 600,000 foreign citizens became naturalized Swedish citizens.)

I have no idea how that will format in this post. Anyway, adding back the 600,000 naturalized gets one to about a 1.1 MM "Foreign" vs. 7.1 MM "Domestic". However, one article delivers the unsurprising news that Finns and Norwegians, especially, do not have a hard time integrating into Swedish society. Poles, Czechs, and some other Euro area refugees are similarly assimiliated.

Now, to amuse my dark heart, a little tidbit I ran across on a site that talks about how to get work permits in different countries:

"Sweden is a global leader in the mobile telecoms sector. It has a need for skilled telecoms engineers, but many are deterred by Sweden’s very high tax rates. However, it is possible to avoid these taxes by limiting your / your employee’s stay in Sweden to no more than 180 days in a year. "

Who would have suspected?

And why do we care about Sweden? Somone mentioned Nathan Newman's point that, as a successful socialist state, Sweden is a problem for conservatives. Actually, I see the situation differently - Sweden is a one way argument.

Sweden was a prosperous country unscathed by two world wars. Despite these immigration statistics, it seems to have maintained a high degree of cultural homogeneity. If Socialism can succeed there, it scarcely follows that Socialism would succeed across a much larger and more diverse area. This is the "Glass Theorem" (clear, or easily broken?) that Europe as a whole has a wide range of people and problems, and extrapolating from a Swedish success would be misleading at best.

However, if Socialism fails in Sweden, well, you are unlikely to find better conditions elsewhere. Japan, maybe. So, Sweden is a problem for the Socialists, not for the conservatives - if this precious flower can barely survive in such a beautiful greenhouse, how can we hope to release it into the world?

Greenhouse, Glass - it all comes together.

Posted by: Tom Maguire on November 19, 2002 06:14 AM

Perhaps it was already brought up, but the Jordan example probably isn't the best one when it comes to ability and opportunity. Instead, think of, oh, Wayne Gretzky. A lot of people I've talked to consider him a better athlete than Jordan ever was, and he certainly was spectacular at the game.

Now, people brought up Jordan, right? He was a basketball player. All he needed was "shoes, a court, and a ball", right. Inexpensive as hell. Gretzky, on the other hand, was a hockey player. He required a whole lot of expensive equipment (that had to be replaced as he grew older), he had to pay to join a league to play competitively (or at least would nowadays), if he wanted to practice he'd have to pay for ice time (if not then, then certainly if he were born now)... hockey's expensive, any Canadian parent can tell you that. And this would have to be from a young age, or he'd have never developed his native abilities to the extent he did.

Now Wayne was lucky enough to have parents that could afford it. It could be argued that it wasn't that expensive at the time, but again, we aren't living in that time, we're living in this one... and even if it wasn't that expensive then, it's certainly expensive now. If Wayne's parents couldn't afford it, then his abilities would never have been brought to the fore, and he'd probably be an investment banker or columnist or aerobics instructor or somewhere. We would have missed out on him, and never knew. *He* wouldn't have even known; if he were a minority, he wouldn't have even thought about it.

Replace "expensive equipment" with "post-secondary education" and "native ability to play hockey" with "ability to write" or "ability to do particle physics" or "nose for business" or "brilliant ability to play the piano" or whatever. Without some sort of financial resources to fall back on so that someone (or their parents) can ferret out exactly what they're good at and develop it, most people will never reach their potential. Jordan was lucky; what he was good at was cheap to learn and practice. Gretzky was lucky: he was born at the right time to the right parents to be able to exploit the talent that he had.

How many other people out there aren't so lucky?

Posted by: Demosthenes on November 19, 2002 08:42 AM

>>I find the conclusion of the Swedish and Finnish researchers that Sweden has more income mobility than the US to be laughably counter-intuitive.<<

Tom: That's also what some people thought when they were told about heliocentrism. As a matter fact the Greeks had discovered heliocentrism but it was rejected as non-sensical: it was obvious that the Earth had to be the center of the Universe... :)

Posted by: Jean-Philippe Stijns on November 19, 2002 08:42 AM

Oh, for heaven's sake, JP - I think it was clear from my context that I wondered whether anyone had found the damn paper and reflected on the research methodology. One joker announces that my request for more information was a statement that the researcher was a liar, and now you pretend that I am an ancient Greek. WRONG! Demosthenes is the Greek, for starters.

SO, some people, when told about heliocentrism, evaluated the evidence that was presented - have you looked at the paper I linked to with its conclusions about income mobility in Sweden? Is the one I found even the "right" one? Does it trouble you that, based on the abstract, he only used ten years of data from 1980 to 1990? I linked to another article that says Sweden entered a miserable recession in 1990 and is still suffering from it, to the extreme detriment of new immigrants, who have a 28% unemployment rate - any comments on that?


Does it bother you that, quoting the abstract, The pattern of mobility turns out to be remarkably similar...

i.e., greater inequality in the US, but similar mobility. Not at all what the Times said.

If you are going to tell me that, based on two sentences in a NY Times article, you now accept the question of income mobility in Sweden as definitively established, well, let me tell you about the sun, the earth and their surprising relationship.

My goodness.

Posted by: Tom Maguire on November 19, 2002 09:49 AM

Given how embedded hockey is in the cultural fabric of Canada, and the ubiquity of equipment swap exchanges in youth hockey circles, it is silly to paint Wayne Gretzky as someone whose talents were
discovered and rewarded in part because of an opportunity differential.

But back to rags-to-riches stories in basketball, this is a good place to lighten things up with a shot of a PR stunt involving Manute Bol, the former NBA star and one-time Sudanese livestock herder, getting measured for hockey equipment.


Posted by: George Zachar on November 19, 2002 11:10 AM

hmmmm ...

George Zachar wrote:

>>And, of course, a student must choose a field of study that makes financial sense, if money is an issue for that student.<<

I'd be interested in knowing how this fairly appalling inequality would show up in a study of consumption figures which pupports to measure "how lives are actually lived".

Posted by: DD on November 21, 2002 04:55 AM

"The people I was talking about were working at close to minimum wage after graduation, not just while going to school."

Well, then college was a losing investment for them. It would still be a losing investment if We The People had footed the bill for it instead of letting them borrow the money for it - the only difference would be that they would be making losing investments with our money, rather than their own.

That is the reason why I think there should not be any government aid for college other than loans - if they have to pay the money back, it will provide some incentive to make a wise education investment.

"Incidentally, I'm not sure that anyone on this thread has advocated confiscatory taxation, or turning the U.S. into Sweden. I would be happy if our dear readers came away with these:
(1) The U.S. does not have as much income mobility as was once thought."

But no one has answered the point that movement between quintiles in the United States takes a much greater increase in actual income than it does elsewhere, so people might be improving themselves just as much or more than people in other countries while the US still compares unfavorably in "income mobility".

"(2) A large degree of this is due to inequality of opportunity, in a way that is Not Fair."

I haven't seen any indication that a "large" degree of anything can be attributed to inequality of opportunity.

"Suggestion: Even if there is no way to create equality of opportunity, it might be possible to make life easier for those who are at the bottom of the income distribution."

It is indeed possible. One big improvement would be to give decent law enforcement to cheap neighborhoods - after all, practically everyone has enough to eat, but lots of people can't afford to live in safe areas, and lots more people spend staggering amounts of money for no other purpose than to separate themselves from criminals. Another would be to make development of new housing and new neighborhoods as easy and unrestricted as possible, in order to reduce housing costs. Those two changes would enable millions of people to stand tall as independent citizens living decent lives rather than being reduced to accepting handouts or cowering in fear of two-legged predators.

Posted by: Kenneth Uildriks on November 21, 2002 06:45 AM

fairly appalling inequality

Is it "appalling" for people to set their sights on education and training suitable to their circumstances?

Should someone with a large family to support seek a Phd. in French Lit, knowing of the near-zero probability of a subsequent career providing enough income to support the kids?


Certainly a society set up along the lines of "to each according to his needs" would have State payments based on family size, unrelated to household employment.

There is a tremendous amount of data, history and scholarship devoted to the varying degrees of this approach, and its results.

Posted by: on November 21, 2002 07:07 AM

Ok Tom Maguire, I'm not trying to be your cyber stalker, I promise! However, you're misreading the Swedish abstract which you posted. The sentence that talks about 'patterns of mobility' is referring to the income mobility of individuals (although since they only use 11 year time periods, 'income volatility' might be a better term). In contrast Krueger's article talks about income mobility across generations. To put it another way, one is talking about the question of how much your individual income is likely to vary from year to year, while the other is talking about at how likely you are to end up at the same the position in the income distribution as your parents. Apples and oranges. Krueger, by the way, is not an Nytimes reporter but an economist at Princeton. He definitely knows what he's talking about.

As to the interesting disparity between changes in income distribution and consumption distribution brought up by Jim Glass: if income inequality is increasing faster than consumption inequality, that has to be made up for by greater disparities in saving. Therefore inequality in wealth must be increasing even faster than income inequality is. So the richest will build up larger and larger nest eggs (which will enable them to invest in better education, housing, etc.), while the poorest build relatively even fewer assets, or go further into debt. Repeal of the inheritance tax will accellerate this trend. Intergenerational class mobility is likely to become even more restricted in the future.
We could get into a whole debate over what the cause of this widening inequality is (liberals will say it's because the rules of society are unfair and/or the government isn't doing enough; conervatives will say that it is either the fault of the poor themselves, or that it's the fault of misguided liberal policies, or that nothing can be done about it anyway). But either way it has to be considered a worrying trend for society.

Posted by: RC on November 22, 2002 02:22 PM

RC says if income inequality is increasing faster than consumption inequality, that has to be made up for by greater disparities in saving.

Not necessarily. In theory it could be that instantaneous income inequality is increasing because income volatility is increasing, without increasing lifetime income inequality. If so (and that's just a random hypothesis), then people getting better at borrowing from one phase of their life for another would smooth out the consumption inequality.

Posted by: Tom on November 22, 2002 04:46 PM
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