Monday, 2 September 2013
Bill Mitchell has often drawn attention to IMF and OECD incompetence in relation to economic policy. To a significant extent, it’s the incompetence of those two organisations that explains the excess unemployment we’ve experienced in Europe and the US in recent years.
On a different topic, the OECD has recently tried to enlighten us on the subject of education: in particular the relationship between education and subsequent earnings. And they make the amazing discovery that those with the most education tend to earn more. Staggering bit of news that, isn't it?
Only trouble is that they actually FAIL to prove the point because they fail to control for family background of those concerned, far as I can see.
That is, people from stable and/or middle class backgrounds tend to earn more than others, plus those from that sort of background tend to be better educated (e.g. because their parents can pay for tuition fees). So the superior earnings of those with a decent education will be PARTIALLY EXPLAINED by family background, not by the education itself.
So assuming I’m right in saying that the OECD fails to control for family background, then I have a plea to make to the OECD: please take your bit of research and chuck it on the fire.
P.S. (22nd Feb 2014). Krugman draws attention to OECD incompetence.