Bryan Caplan has a new post where he claims that people can avoid poverty with three simple steps:
If you live in the First World, there is a simple and highly effective formula for avoiding poverty:
1. Finish high school.
2. Get a full-time job once you finish school.
3. Get married before you have children.
This made me wonder if Bryan was confusing correlation with causation. He denies this:
A more agnostic criticism doubts causation. Sure, poverty correlates with failure to follow the success sequence. How, though, do we know that the so-called success sequence actually causes success? It’s not like we run experiments where we randomly assign lifestyles to people. The best answer to this challenge, frankly, is that causation is obvious. “Dropping out of school, idleness, and single parenthood make you poor” is on par with “burning money makes you poor.” The demand for further proof of the obvious is a thinly-veiled veto of unpalatable truths.
I am not at all convinced by this argument. Indeed I don’t see any real argument being made here. It seems equally plausible to me that the sort of person who doesn’t finish high school is different, on average, from those who do. The dropout may (on average) be less smart, less interested in classes, less motivated, and/or perhaps a bit anti-social. None of those traits are normally associated with financial success. If you put a gun to their heads and forced this cohort to finish high school, would that by itself change those personal characteristics? Maybe slightly, but how much? Would this group then become identical to other high school grads? I doubt it.
As for marriage, the Nordic countries tend to have a much higher share of births out of wedlock, and yet typically have relatively low rates of poverty:
You might argue that their culture is different, and that in Scandinavia even unmarried men often take an interest in raising their children. I accept that, but again it just makes me wonder if it’s marriage that is the key, or if the deciding factor is the personal characteristics of those who fall into poverty.
I certainly agree that working hard and being responsible are useful traits, and that some people are poor due to unfortunate life choices. I would push back, however, against any suggestion that there are simple public policy fixes, such as policies that discourage people from dropping out of high school or encouraging marriage. Those policies might work, but simple correlations don’t prove that. (BTW, I lean toward policies that make work more attractive, such as low wage subsidies and housing deregulation, as opposed to basic income programs that might discourage work.)
Also keep in mind that definitions of poverty are based on “households”, where the poverty line increases only modestly each time a person is added to a household. Thus if two single people making $10,000 each decide to double up and live in the same apartment, that pushes them above the poverty line. It’s not obvious their situation improved (otherwise no one would ever chose to live alone), but the US government treats the decision to share an apartment as an improvement of living standards. This biases the statistics toward the conclusion that marriage improves one’s economic well being.
Thus you might just as well argue that poverty could be almost eliminated if everyone lived like Chinese college students in the 1980s, with eight people per apartment.
Even with minimum wage jobs, a household of eight will earn far more than $47,650. But would those “households” be better off, or would people get on each other’s nerves? (My wife shared a room with 7 other college students in the 1980s, in Beijing.)
Finally, most women have a strong preference to have children. Finding a suitable husband is not always a “simple” process.
READER COMMENTS
Mark Z
Feb 22 2021 at 6:45pm
I’m sure Bryan’s not arguing that the ceremony itself is the important factor. Rather it’s probably having children when one has a stable co-parent and isn’t too young. And of course having children itself is not a part of the recipe for success, but not having them unless/until one is married (at least de facto). It may be much easier for the childless to avoid poverty, so difficulty finding a suitable spouse, however much a personal tragedy it may be, probably doesn’t increase likelihood of poverty. Not having children at all is generally pretty simple.
Scott Sumner
Feb 22 2021 at 7:02pm
But the data he relies on is based on the “ceremony”, and the cultural conservatives arguing for marriage believe that that distinction is important. So there are some real public policy questions that revolve around that issue.
You said:
“Not having children at all is generally pretty simple.”
I guess it depends how one defines “simple”. Is it simple for 8 adults to share an apartment?
Burl Horniachek
Feb 22 2021 at 10:39pm
The ceremony is a pretty good (not perfect) proxy for having found a stable co-parent.
JFA
Feb 23 2021 at 7:01am
Not having kids seems pretty easy. Most women achieve it for most of their lives (I don’t know about you, but when I go to the store, it’s rare that I see more than one or two pregnant women). For those that find it desperately hard to not have children, one public policy is to offer IUDs with price based on income.
For the marriage question, I think this is more of a cultural difference. The thing that marriage signals is commitment. If you can get the commitment without the marriage then more power to you. In the US, especially with its heavy religious undercurrent (even for those who don’t attend church), marriage is usually how one signals that commitment, but if norms shift, then it will no longer be a good indicator to use in the success sequence.
I think you and Bryan agree that the success sequence is an indicator of making good choices. The fundamental difference between you two seems to be how easy/feasible you think making those good choices is. Bryan thinks it’s relatively easy, so his prescription to people is to just follow the success sequence. You think it’s much harder to make good decisions, so for you the success sequence is not so much a plan as it is an outcome and can’t serve as a policy guide.
Scott Sumner
Feb 23 2021 at 12:06pm
You said:
“I think you and Bryan agree that the success sequence is an indicator of making good choices. The fundamental difference between you two seems to be how easy/feasible you think making those good choices is. Bryan thinks it’s relatively easy, so his prescription to people is to just follow the success sequence. You think it’s much harder to make good decisions, so for you the success sequence is not so much a plan as it is an outcome and can’t serve as a policy guide.”
The “Lucas Critique” is a good way of thinking about this. A and B are currently correlated, but what if we artificially manipulate A?
And I don’t find terms like “easy” to be at all useful. Compared to what? If you asked 100 young women is it easier to refrain from having children or walk on hot coals, I bet at least 50 would choose to walk on hot coals rather than refrain from having children. After all, childbirth itself is hardly “easy”!
Mark Z
Feb 23 2021 at 12:39pm
It seems you’re conflating whether women would like to have children with how easy or hard it is to have children. For starters whether they would rather have children or not is itself immaterial. Many women desperately want to have children and never do (I’d guess more than have children who’d rather not). And many women wanting to do it eventually doesn’t mean it’s unavoidably likely to just happen by accident at a random point in one’s life.
JFA
Feb 23 2021 at 1:04pm
I would suggest that the ubiquity of an action suggests its relative ease, ergo not having babies is easy. Women are not getting pregnant left and right, and presumably the declining fertility rates across the world suggest we know how not to have children.
If you think that the success sequence is a mere consequence, then I can imagine that you would think targeting policies towards high school graduation, getting a job, and waiting until you are in a committed relationship to have a child would be ineffective at reducing poverty, but that’s only the case if you think people can’t be taught to make good choices (or at least better choices).
If you think that of the success sequence as an actionable path, then encouraging people to do those things would actually have a measurable impact on poverty.
I really don’t see it as more than encouraging good decision making, much like telling people to get a roommate or 7 until while you build up a nest egg after college.
Scott Sumner
Feb 24 2021 at 2:09pm
Mark, You said:
“It seems you’re conflating whether women would like to have children with how easy or hard it is to have children.”
I’m not conflating anything. “Easy” is a loaded term with an ambiguous meaning. Physically easy? Psychologically easy? There are many meanings.
BJH
Feb 22 2021 at 7:06pm
Your take seems obviously correct and frankly (while I have learned a lot from Caplan) I was fairly shocked he would make such a mistake — particularly given that he’s writing a book on the subject.
Cody Boyer
Feb 22 2021 at 7:19pm
Bryan’s article immediately reminded me of Scott Alexander’s recent review of the Cult of Smart, part of which discusses how some charter schools appear to be gaming the system to get better-than-average students and then claiming they have achieved amazing results. In both cases, I think controlling for the selection effects that seem to be occurring would be a great line of research.
Kyle Walter
Feb 22 2021 at 9:21pm
“It seems equally plausible to me that the sort of person who doesn’t finish high school is different, on average, from those who do. The dropout may (on average) be less smart, less interested in classes, less motivated, and/or perhaps a bit anti-social. None of those traits are normally associated with financial success. If you put a gun to their heads and forced this cohort to finish high school, would that by itself change those personal characteristics? Maybe slightly, but how much? Would this group then become identical to other high school grads? I doubt it.”
I don’t think Caplan would disagree with that, but the signaling model of education predicts that a high school diploma would make a difference. Try to reverse the hypothetical and force a smart ambitious person to drop out of high school early. How would this affect their ability to find a job? Caplan I suspect would say a lot.
Re: Marriage. I recall an interview where Thomas Sowell briefly alludes to the idea that old fashioned common law marriage where two people stay together without a ceremony is just as good, but I can’t seem to find the clip.
Scott Sumner
Feb 23 2021 at 1:23am
But if you you think in terms of public policy, then the message is less clear. Suppose everyone takes Bryan’s advice and finishes high school. Then the signaling value is gone.
robc
Feb 23 2021 at 6:44am
Maybe the answer is to stop thinking in terms of public policy?
Maybe, just maybe, there shouldnt be public policy ( on this, or really, anything, including monetary).
If you think on terms of private policy , how does this effect me and my family, it works much better. I have a 5 year old daughter, what does this say about how I should parent? Encourage education. Develop a work ethic. Teach basic self control.
Scott Sumner
Feb 23 2021 at 12:07pm
I’m certainly skeptical of most public policies in this area.
Phil H
Feb 22 2021 at 10:06pm
Extreme caution in assigning causality is always a good thing. Nonetheless, it feels to me like there are a bunch of critical decisions and checkpoints in life that are really worth getting right. And they’re not obvious to the people going through them; so they require strong social norms to enforce them. Dropping out of high school or college are obvious ones. A teenager might do many dumb or dangerous things, but that particular one seems more likely to hamstring their efforts to earn money than any other.
The question is whether norms like this harm non-conformists more than they help the majority. And I don’t know the answer to that.
Lizard Man
Feb 22 2021 at 11:42pm
I think that Japan has a similar poverty rate to the US, but almost everyone there follows the “success sequence”. I believe that Noah Smith has written about this.
Scott Sumner
Feb 23 2021 at 1:24am
Good point.
LEB
Feb 23 2021 at 10:31am
This doesn’t seem to prove anything, particularly in the context of an article titled “correlation and causation”. We don’t know what the poverty rate in Japan would be in a world where fewer of their citizens followed the success sequence.
Scott Sumner
Feb 23 2021 at 12:09pm
It doesn’t definitively prove anything, but it strongly suggests that “doing the right thing” doesn’t necessarily prevent one from becoming poor.
LEB
Feb 23 2021 at 2:55pm
Of course it doesn’t, if you broaden out the context enough. I have no doubt that prehistoric man would still be below our poverty line, regardless of their approach to family planning. But I don’t think it is appropriate to extrapolate the authors’ conclusions to a context they didn’t consider and also implicitly assume that Japanese citizens are not less poor than they would be if they didn’t follow the success sequence.
Scott Sumner
Feb 24 2021 at 2:10pm
Japan is not a Stone Age society, so I find your analogy unconvincing.
LEB
Feb 24 2021 at 4:12pm
My point is that there are many factors that affect poverty. Rather than interpret the authors’ findings to mean that the success sequence will guarantee escaping poverty, even in contexts far removed from their sample, we should take the more narrow (yet valuable) view that the success sequence contributes to less poverty on the margin, all else equal.
It is also my understanding that Japan has no official poverty line, which makes it difficult to get measures that line up well with the way poverty is measured in the US. The poverty statistic cited above may be based on a relative poverty measure, which is tied to the median household income in Japan. Relative poverty is not the right measure to look at to assess the ability of individuals to apply the success sequence to improve their objective standard of living.
https://en.m.wikipedia.org/wiki/Poverty_in_Japan
Kailer
Feb 24 2021 at 12:39pm
You don’t think that having kids outside of a stable long-term relationship lowers your odds of financial success? You don’t think that dropping out of high school hurts your chance of success? I find this hard to believe.
Miguel Madeira
Feb 25 2021 at 2:43pm
Why a man having kids outside of a stable long-term relationship should lower his odds of financial success? In the case of men, I imagine that any relation “childred before marriage > high poverty risk” should be correlation, not causation
Dylan
Feb 23 2021 at 5:52am
Not related to the post, but I can’t let the headline go by without linking to one of my favorite XKCDs
https://xkcd.com/552/
robc
Feb 23 2021 at 6:47am
My favorite: https://xkcd.com/123/
I can do simple coordinate transformations in my head.
Dylan
Feb 23 2021 at 8:16am
What I love about XKCD is that it is the exception to the rule that if you have to explain a joke, it’s not funny. I can’t count the number of times that I’ve read a comic, went off to Wikipedia for an hour or two to teach myself enough cartography or quantum mechanics or even centripetal force so that I can come back and feel smart enough to get the joke.
robc
Feb 23 2021 at 8:52am
The nice thing is I spent 20+ years banging my head against the wall telling people that centrifugal force is real, IN THE CORRECT REFERENCE FRAME, and now I can just send a link.
But, yes, what you said too.
Jon Murphy
Feb 23 2021 at 8:49am
That XKCD comic reminds me of the joke: statistics means never having to say you’re certain.
Dylan
Feb 23 2021 at 9:25am
I like that one. I feel that I’m kind of alone here, but when a thinker expresses confidence or certainty in something, I tend to discount it more heavily than if they couched it in more ambiguity.
Michael Rulle
Feb 23 2021 at 9:43am
Cause and effect are difficult to assess. So in that sense, I see Scott’s point. And it clearly is plausible that certain people will have trouble “succeeding” regardless of circumstance. But, it is not a deterministic world we live in. I know many intelligent people (well, some, not many) whose environment was very difficult to transcend and have failed miserably (by fail, I mean self-destructive behavior)—yet they have siblings who overcame it.
Marriage per se is not the issue of having children—-but in our culture marriage matters–more so than, for example, in Canada (which fits the Sowell reference). How you have been raised matters. So how do we create policies that make a difference? I don’t know—but the “sequence” critique seems like a red-herring. I am sure Scott believes there are policies that can improve outcomes.
Scott Sumner
Feb 23 2021 at 12:13pm
You said:
“I am sure Scott believes there are policies that can improve outcomes.”
A well justified assumption, given that I mentioned several such policies in the post itself.
You said:
“But, it is not a deterministic world we live in. I know many intelligent people (well, some, not many) whose environment was very difficult to transcend and have failed miserably (by fail, I mean self-destructive behavior)—yet they have siblings who overcame it.”
The world may or may not be deterministic, but siblings performing differently is not evidence for either view.
KevinDC
Feb 23 2021 at 10:07am
I believe this is consistent with what Bryan has also argued elsewhere:
That is to say, Caplan does seem to agree with the perspective that its personal characteristics which affect both adherence to the “success sequence” and long term outcomes generally. One difference is that Caplan does believe in libertarian free will, and is therefore more likely to view these factors (other than IQ) as issues for which someone is personally responsible and therefore blameworthy – a view I don’t believe Sumner shares.
I think Caplan does believe such policies would be helpful, for reasons he mentioned when synthesizing three different works from Charles Murray which looked at three different causes of poverty:
The overall case he lays out seems reasonable to me and definitely uses more than simple correlations – plausible causal mechanisms are described.
I think it’s very likely that their living situation has improved, just for reasons of revealed preference. I’d agree it’s not obvious their situation has improved along every margin, but if their situation didn’t improve overall I suspect they wouldn’t have decided to share an apartment in the first place. Cutting rent and utility expenses in half can make a major difference, after all. Personal anecdote – ten years ago or so, I was living in an apartment that went for $425 a month, and splitting it with a roommate. In a vacuum I’d have preferred to live alone, but at that stage of my life saving even a couple hundred bucks a month on rent and utilities was a big deal.
Well, I don’t know if he’d argue for 8 people sharing an apartment, but taking on roommates is something Caplan has argued for as a general poverty alleviation strategy. My personal experience with that strategy was effective, so maybe that makes me biased in its favor.
Scott Sumner
Feb 24 2021 at 2:18pm
You said:
“That is to say, Caplan does seem to agree with the perspective that its personal characteristics which affect both adherence to the “success sequence” and long term outcomes generally.”
Then his recent post makes no sense, as he dismisses claims that one can reasonably doubt the causal relationship.
You said:
“libertarian free will”
Free will may or may not exist, but it has nothing to do with libertarianism.
You said:
“I think it’s very likely that their living situation has improved, just for reasons of revealed preference.”
Sure, if it is voluntary. My point was that this is no reason to encourage people to live together as a way of reducing poverty. Similarly, is there any reason to doubt that a high school dropout did the right thing? Or does your revealed preference theory apply to housing but not education decisions?
KevinDC
Feb 24 2021 at 3:13pm
Hey Scott –
You said:
I think you’re caught up on a terminological misunderstanding here. In philosophy, “libertarian free will” is a concept which has nothing at all to do with political libertarianism. It means a belief in free will that is separate from and unaffected by determinism. You could be a hardcore left wing communist in politics but also be a libertarian on the topic of free will. The point I was getting at is that if you believe in libertarian free will, you’re more likely to believe people are truly blameworthy for their actions, because you would believe they were always effectively able to do other than what they did. Bryan believes in libertarian free will, and I don’t think you do, based on what you’ve said elsewhere. So that difference right there could lead to both of you talking past each other to a degree.
I don’t think anyone is advocating for forcing people to share rent involuntarily?
I think reasons do exist to at least encourage this idea – for one, it seems to be both highly effective and easily available, and it doesn’t shift the cost to third parties and therefore doesn’t create the kind of moral hazard style incentives that arise when poverty alleviation is paid for by third parties. Maybe these reasons aren’t always decisive, or there are other reasons to consider which go in the other direction, but to say there is no reason at all seems like an overstatement to me.
This framing contains a bit of an equivocation. The original claim you made was about if people sharing housing have therefore improved their situation by their own lights. But now you’re asking me if I think a high school dropout did the right thing, which is a very different question. Yes, sometimes people do things which they think will improve their situation but which I think isn’t the right thing to do, but I’m not sure what you think follows from that? I don’t think it means we need to be agnostic about the relative value of decisions like “dropping out of school” vs “sharing rental costs,” or whether one of those ideas should be encouraged and the other discouraged.
Floccina
Feb 23 2021 at 12:23pm
True but looking back at an earlier period (people seem to like 1950 to 1967) when people were poorer and it was tougher for a single parent to live, there were fewer people staring single parent households and maybe fewer males not working full time*. So Bryan’s point may be that those single parents have chosen that path because it looks better than the marriage alternative and therefore they are to blame and the policy might be to do less to help them or to put more constraints on them. An example of a constraint might be, a single mother with 1 child, should get on birth control or she’ll lose some benefits if you have another child.
Of course there are fewer people not graduating High School though.
Floccina
Feb 23 2021 at 1:57pm
BTW maybe Bryan is just suggesting that the blame should fall on the those who could in theory follow the success sequence but don’t.
Philo
Feb 23 2021 at 5:05pm
That looks right. Scott may “push back . . . against any suggestion that there are simple public policy fixes,” but Bryan made no such suggestion. He just claimed that poverty does not give one a moral claim on others’ property.
Kyle Walter
Feb 23 2021 at 11:01pm
@Lizard Man
Smith’s article appears to be paywalled. Here’s a response Kevin Williamson of National Review wrote:
https://www.nationalreview.com/2019/07/what-noah-smith-gets-wrong-about-poverty/
Scott Sumner
Feb 24 2021 at 2:22pm
His first point proves the opposite of what he thinks, as Japan is poorer than the US. So in absolute terms Smith’s argument is even stronger.
Kyle Walter
Feb 24 2021 at 6:29pm
If we go based on how well Japanese Americans are doing, Japan would probably be a much richer country with American policies, business culture, and geography but all the personal behavior remaining the same.
Much richer than America that is.
Michael Stack
Feb 24 2021 at 11:49am
Marriage has a huge selection effect – in order to get married, you have to be somebody who has marriage-worthy traits.
Generally speaking if you’re a male uninterested in education, or a job, or working very hard, most women won’t be interested in marrying you.
Scott Sumner
Feb 24 2021 at 2:22pm
Exactly.
Comments are closed.