December 31, 2012 to January 1, 2013
Meritocracy, Social Mobility, Intergenerational Mobility
Meritocracy, Social Mobility, Intergenerational Mobility—Posner
The three terms in my title are closely related. The first refers to a society in which people's success is a function of their individual abilities rather than the wealth or position of their parents or other family members. The second, which is closely related, refers to the various social classes' being permeable to entry by talented individuals from other classes. The third, a more technical social scientific term, refers to lack of correlation between parents' and their children's income or social status; the less positively correlated the parents' income or social status is correlated with the income or social status of their children, the greater the intergenerational mobility in the society.
If IQ were purely genetic and therefore only inherited, and if income were a linear function of IQ, children's incomes would be very similar to their parents' incomes and intergenerational mobility would be slight, with the important qualification, however, that social standing is not a function purely of income. There are scientists, highly regarded classical composers, distinguished poets, political leaders and other fficials, military heroes, priests, and others who have high social tatus but mediocre incomes. And notice that the correlation between parental nd child social standing or income would hold for any purely genetic trait hat was valued, such as athletic or musical potential, and not just for IQ.
These examples underscore ecker's point that a low level of intergenerational mobility is consistent ith meritocracy, even when as in the examples merit is a function of luck: hether your parents happen to have had a high IQ, and whether IQ is highly valued n the society you happen to have been born into.
IQ is not entirely genetic (it's enerally believed to be half genetic and half the result of other innate onditions, for example conditions during pregnancy and birth; early nvironmental conditions; and physical and mental health), but has a ubstantial genetic component, as just noted. And with the increased role of echnology in the economy and the expansion of the professions relative to other occupations, the financial and social status returns to IQ have risen. Increased assortative mating (likes with likes), attributable in part to a decline in discrimination and in part to the greater search for marital partners that is enabled by the Internet, will probably increase variance in IQ and thus increase the returns to the highest IQ strata, in the near future.
That said, however, the United States is, at best, a highly imperfect meritocracy. The reason is the pattern of investment, both private and public, in children's career and life prospects. Wealthy parents invest heavily in their children's education by hiring tutors, paying the very high tuition charged by elite private schools and by colleges (public as well as private), making generous donations to such institutions, and financing extracurricular activities that impress college admissions officers. Colleges compete for wealthy kids, seeing them as future generous alumni. Parents use personal contacts to land good jobs for their kids; sometimes hire them for the family business; and, of course, give, lend, and bequeath them money. Because public schools are financed mainly by local property taxes, the best public schools tend to be in high-income areas, and so wealthy kids that go to public schools rather than to private schools tend to go to the best public schools. Indeed, if there are no good public schools in a wealthy family's neighborhood, the family will send its children to a private school.
As a result of these factors, among the wealthy countries the level of intergenerational mobility is lower in the United States than in the four Scandinavian countries (which have the highest level of intergenerational mobility) and in Canada, Australia, New Zealand, Germany, Japan, France, and Spain, and slightly higher in the United States than in Italy and the United Kingdom. These rankings are highly correlated, as one would expect, with income inequality (the United States is second-highest in inequality of income, after the United Kingdom, in the countries I just listed). Wealthy families that generously underwrite their children create more wealthy families in the next generation.
Ideally, in order to maximize productivity, one would like the government to identify the high-IQ children in poor or lower middle class families and provide them with education and education-related services equivalent to those that wealthy families bestow on their usually high-IQ children. The need is acute in the United States because of our relatively quite low level of intergenerational mobility. Not much effort is being made to meet this need. The reasons probably are that children don't vote (it is arguable that a parent should be given a bonus vote for every one of his or her children living with the parent), and that poor and lower middle-class parents have little political clout relative to old people, wealthy people, civil service pensioners, and other politically influential groups.**
Meritocracies and Intergeneration Mobility-Becker
Countries differ greatly in the influence of family background on the achievements of children. Family influence is measured through the degree of intergenerational mobility, or the relation between the achievements of parents and children. Intergenerational mobility is said to be stronger when the achievements of children are more weakly related to the achievements of their parents.
Intergenerational mobility in a country is often used as a measure of the importance of merit rather than prejudice, political influence, and other similar considerations in determining success and failure in that country. Although intergenerational mobility is related to the importance of merit in determining success, the connection is more complex than one might think.
Economists usually measure intergeneration mobility by the relation between the earnings (or education) of parents and children. If children's (lifetime) earnings tend on average to increase by 4% when parents (lifetime) earnings increase by 10%, the degree of intergenerational mobility would be 60% (=(100-40)/100), while if children's earnings tend to increase on average by only 1% when parental earnings increase by 10%, intergenerational mobility would be 90%. This measure of mobility ranges among countries from about 90% to less than 20%. The degree of mobility for the United States equals about 50%, while it seems to be over 80% for several Scandinavian countries, and only about 30% for Brazil.
Success in a meritocracy depends mainly on a person's abilities and skills. The relation between intergenerational mobility and such a meritocracy is complex. Consider, for example, cognitive abilities, as measured say by IQ score. Genes are a major determinant of IQ, although early environmental experiences and the covariance between genes and environment are also important. The significant role of genes in IQ means that children of parents with high IQs also tend to have higher than average IQs in part because children inherit their genes from parents. If earnings depended to a large extent on IQs because the economy heavily rewarded this measure of "merit", parents with high IQs would tend to have high earnings, and their children would also have relatively high earnings because the children would also have high IQs.
Therefore, to the extent that earnings depend on cognitive abilities, such a "meritocracy" would have a strong correlation between the earnings of parents and children. In other words, intergenerational mobility would be relatively low in such a merit-based economy. To be sure, intergeneration mobility would also be low if family position were automatically passed on from parents to children, independently of the abilities of children (or parents). Therefore, intergeneration mobility would be low at these two extreme models of the role of merit in determining earnings. By contrast, if earnings were basically randomly determined in each generation without regard to merit or any other considerations, there would be complete intergeneration mobility even though merit had no role in determining earnings.
The relation between intergeneration mobility and meritocracy becomes still more complex after we recognize that earnings in a meritocracy would depend not only on cognitive abilities, such as IQ. For it depends also on investments in education and other human capital, on getting to work on time, on being able to take criticism, and on many other psychological characteristics. Families that are more educated and have high earnings tend to invest a lot in their children's human capital, and in various non-cognitive traits. In a merit-based economy where earnings depend on the totality of abilities and skills, children of high earning parents would also tend to be high earners because their parents would pass on both cognitive skills and investments in various forms of human capital.
Even after including parental investments in education, non-cognitive traits, and other human capital of children, an economy where success and failure are determined by merit would still have low intergeneration mobility. To be sure, investments in education and many other types of human capital are not only determined by parents, but also by government policies and by philanthropists. To the extent that governments and philanthropists invest more in the human capital of children with less successful parents (as appears to be the case for governments in Scandinavian countries), a merit-based economy could have relatively high intergenerational mobility since children from poorer and less educated families might have high levels of human capital investments.
Nevertheless, a big jump is still required to make inferences from the intergeneration mobility in a country to the role of merit in determining success and failure in that country. In particular, although the United States has considerably lower intergeneration mobility than many Western European countries, this does not imply that merit is a less important determinant of success in the American economy than in these other economies.
Merit-based economies use the human capital of individuals more efficiently than other economies, but a country might be willing to trade off less efficiency for greater intergeneration mobility. Good policies would recognize that there is such a tradeoff, and that policies that lead to much greater mobility across generations may make the allocation of human resources considerably less efficient.