what does the oecd alphabet soup say? wout ultee university of haifa november 18, 2012
DESCRIPTION
WHAT DOES THE OECD ALPHABET SOUP SAY? WOUT ULTEE UNIVERSITY OF HAIFA NOVEMBER 18, 2012 . THE ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT WAS FOUNDED IN 1961 IT WAS THE FOLLOW-UP TO THE AGENCY RESPONSIBLE FOR THE DISTRIBUTION AND SURVEILLANCE OF THE MARSHALL AID. - PowerPoint PPT PresentationTRANSCRIPT
WHAT DOES THE OECD ALPHABET SOUP SAY?
WOUT ULTEEUNIVERSITY OF HAIFANOVEMBER 18, 2012
THE ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT
WAS FOUNDED IN 1961
IT WAS THE FOLLOW-UP TO THE AGENCY RESPONSIBLE FOR THE DISTRIBUTION
AND SURVEILLANCE OF THE MARSHALL AID
THE MEMBER STATES AT FIRST WERE THE RICH WESTERN COUNTRIES OF THE WORLD
NOT LONG AGO ISRAEL BECAME A MEMBER
THE OECD DID NOT HAVE ANY FORMAL
RESPONSIBILITIESIT BECAME SOMETHING LIKE A
THINK TANK
AND IT AT FIRST TESTED THEORIES OF RIGHT-WING US ECONOMISTS
SOMETIMES IT STILL DOES SO
UNEMPLOYMENT RATES AND LONG TERM UNEMPLOYMENT RATES ARE HIGHER IN THE
EUROPEAN COUNTRIES THAN IN THE USABECAUSE UNEMPLOYMENT BENEFITS LAST LONGER
IN THE EUROPEAN COUNTRIES
BUT DID THE UNEMPLOYMENT RATE IN SOME EUROPEAN COUNTRY MAINLY RISE BECAUSE
UNEMPLOYMENT BENEFITS BECAME EXTENDED?
MONEY FOR RETRAINING OF UNEMPLOYED PERSONS LOWERS UNEMPLOYMENT RATES
MONEY FOR RETRAINING PERSONS ABOVE THE AGE OF 50 YEARS DOES SO?
WHY IS NOT THE WHOLE WORLD LIKE THE USA? QUESTIONS
VERSUS
WHY ARE THERE DIFFERENCES BETWEEN EUROPEAN COUNTRIES?
QUESTIONS
THE OECD WAS PROBABLY THE FIRST INTERNATIONAL ORGANIZATION TO
PUBLISH FOR ITS MEMBER COUNTRIES TIME SERIES FOR
GROSS DOMESTIC PRODUCT PER CAPITA IN CONSTANT DOLLARS
THE OECD WAS CRITICIZED FOR THIS BECAUSE MONEY DOES NOT BUY HAPPINESS
AND BECAUSE VARIOUS STATE MEASURES LIKE SCHOOLS AND HOSPITALS CONTRIBUTE TO THE
LEVEL OF LIVING
IN THE 1980S THE UN (UNITED NATIONS) STARTED
PUBLISHING THE HUMAN DEVELOPMENT INDEX
THIS INDEX WEIGHS FOR COUNTRIES MEASURES FOR PER CAPITA GDP WITH
MEASURES FOR EDUCATION, SCHOOLING, HOSPITALS, PIPED WATER
ETC
THE RANKING OF THE COUNTRIES DOES NOT DIFFER MUCH
BUT CUBA IS MUCH HIGHER
THE OECD AND THE ILO (INTERNATIONAL LABOR ORGANIZATION) PUBLISHED TIME SERIES ON THE PERCENT
OF NATIONAL INCOME GOING TO SOCIAL SECURITY EXPENDITURES
THIS MEASURE WAS HEAVILY CRITICIZED BY THE SWEDISH SCHOOL ON WELFARE STATE RESEARCH RUN BY AT FIRST
WALTER KORPI AND LATER JOACHIM PALME
EXPENDITURES ON UNEMPLOYMENT BENEFITS IN A COUNTRY MAY RISE, NOT BECAUSE UNEMPLOYMENT
BENEIFTS BECOME MORE GENEROUSBUT BECAUSE THE UNEMPLOYMENT RATE ROSE WHILE
INDIVIDUAL UMEPLOYMENT BENEFITS WENT DOWN
THE SWEDISH SCHOOL CAME UP WITH SUCH INDIVIDUAL MEASURES FOR THE OECD COUNTRIES
THE BEST CRITICISM OF MEASURES LIKE GROSS DOMESTIC PRODUCT PER CAPITA
IS THAT IT PERTAINS TO AN AVERAGE INHABITANT OF A COUNTRY
BUT THAT THE DISPERSION AROUND THE MEAN IS NEGLECTED
IT MAY WELL BE THE CASE THAT A COUNTRY WITH A HIGHER PER CAPITA GDP
HAS A HIGHER PERCENTAGE OF INHABITANTS BELOW SOME LOW INCOME
LEVEL
THE INTERNATIONAL ORGANIZATION DOING THE MOST AT FIRST FOR MAKING MEASURES ON INCOME
INEQUALITY AND POVERTY RATES AVAILABLE WAS THE WORLD BANK
LATER THE OECD CAUGHT ON
POVERTY RATES ARE RATHER ARBITRARY
YET THE RANKING OF COUNTRIES AFTER POVERTY RATES PROBABLY IS NOT AFFECTED BY DECISIONS ABOUT
WHERE EXACTLY TO PLACE THE POVERTY LINE
THE TWO PRIME MEASURES FOR INCOME INEQUALITY ARE THE GINI AND THE QUINTILE
RATIO
THE GINI RUNS FROM ZERO TO 1, WITH ZERO STANDING FOR FULL EQUALITY AND 1 FOR ONE
UNIT GETTING ALL THE INCOME
THE QUINTILE RATIO DIVIDES THE INCOME SHARE OF THE RICHEST 20% BY THE INCOME
SHARE OF THE POOREST 20% OF UNITS
INCOME INEQUALITY USUALLY IS NOT MEASURED AT THE INDIVIDUAL LEVEL (A LOT
OF INDIVIDUALS DO NOT HAVE INCOME) BUT AT THE LEVEL OF HOUSEHOLDS, TAKING
THE INCOME OF ALL HOUSEHOLD MEMBERS INTO ACCOUNT, EVEN IF THAT IS NILL
SO, IF BOTH THE HUSBAND AND THE WIFE WORK, THEIR INCOMES ARE ADDED UP
TO DETERMINE THE INCOME OF A HOUSEHOLD MEMBER, ALSO THE NUMBER OF
NON-WORKING CHILDREN IS TAKEN INTO ACCOUNT (A CHILD OFTEN IS TAKEN FOR 0,4
ADULTS)
INCOME INEQUALITY PER HOUSEHOLD MEMBER USUALLY IS NOT MEASURED AS
TAXABLE (PRE-TAX) INCOME
BUT AS POST-TAX (DISPOSABLE )INCOME PER HOUSEHOLD MEMBER
SINCE THE 1980S THE STATISTICAL OFFICES OF MOST OF THE RICH COUNTRIES IN THE WORLD
ON A YEARLY BASIS PRODUCE DIGITAL FILES FOR THE INCOME OF THE HOUSEHOLDS IN THEIR COUNTRY
THIS OFTEN IS DONE FROM TAX REGISTERS, BUT SOMETIMES SURVEY DATA ARE USED
LIS (THE LUXEMBURG INCOME STUDY) WAS THE FIRST UNIVERSITY INSTITUTE TO USE THESE FILES AND
PRODUCE COMPARABLE INCOME INEQUALITY DATA FOR RICH COUNTRIES
IN SOME COUNTRIES INTEREST ON MORTGAGES ARE DEDUCTED FROM TAXABLE INCOME, IN OTHERS NOT
LIS AND NOW THE OECD DEAL WITH SUCH MATTERS
IN ONE OF ITS RECENT STUDIES THE OECD SHOWED THAT, MEASURED BY GINIS AND
QUINTILE RATIOS, INCOME INEQUALITY ROSE IN MOST OF THE OECD COUNTRIES BETWEEN
1985 AND 2005
ACCORDING TO THE OECD, THE RISE WAS PARTICULARLY STRONG IN THE
UNITED STATES AND THE UNITED KINGDOM
ACCORDING TO THE OECD, INCOME INEQUALITY ROSE A BIT IN THE NETHERLANDS
AND MORE IN ISRAEL
WHY DID INCOME INEQUALITY RISE IN MOST OECD COUNTRIES?
THE OECD TESTED IN ONE OF ITS REPORTS EXPLANATIONS INVOKING DEMOGRAPHIC CHANGE
IF RETIRED PEOPLE HAVE LOWER INCOME, AND IF THE RETIRED INCREASE AS A PERCENTAGE OF THE
POPPULATION, INCOME INEQUALITY WILL INCREASEWITHOUT ANY OF THE DEMOGRAHIC GROUPS OF A
COUNTRY’S POPULATION HAVING A CHANGE IN INCOME
THE MOST INTERESTING DEMOGRAPHIC EXPLANATION INVOKES INCREASED FEMALE
LABOR FORCE PARTICIPATION AND WAS PROPOSED BY THE SOCIOLOGIST GOSTA
ESPING-ANDERSEN
IF MARRIED WOMEN WITH A HIGHER LEVEL OF EDUCATION ARE LESS LIKELY TO QUIT THEIR JOB
WHEN GIVING BIRTH TO A CHILD THAN MARRIED WOMEN WITH A LOWER LEVEL OF EDUCATIONHOUSEHOLD INCOME INEQUALITY WILL RISE
AND IT WILL RISE EVEN MORE IF WOMEN WITH A HIGHER LEVEL OF EDUCATION ARE MARRIED TO
MEN WITH A HIGHER LEVEL OF EDUCATION (EDUCATIONAL HOMOGAMY)
HOWEVER, ALL THESE DEMOGRAPHIC EXPLANATIONS TAKEN TOGETHER DO NOT FULLY EXPLAIN THE RISE IN
INCOME INEQUALITY
WAGE DIFFERENTIALS HAVE BECAME LARGER
NOT ONLY WAGE DIFFERENTIAL BETWEEN PERSONS WITH A HIGHER AND A LOWER LEVEL OF EDUCATION
BUT ALSO WAGE DIFFERENTIALS BETWEEN ECONOMIC SECTORSSUCH AS FINANCE PLUS BANKING VERSUS ALL OTHER SECTORS
WHAT ARE THE WAGE DIFFERENTIALS IN ISRAEL BETWEEN THE HIGH TECH SECTOR AND THE OTHER SECTORS?
THE MOST COMMON THEORY IN SOCIOLOGY EXPLAINING INCOME INEQUALITIES
BETWEEN COUNTRIES IS GERHARD LENSKI’S SOCIAL-DEMOCRACY HYPOTHESIS:
IN COUNTRIES GOVERNED FOR A LONGER TIME BY SOCIAL DEMOCRATIC
GOVERNMENTS INCOME INEQUALITIES, EVEN AFTER TAKING
PROGRESSIVE TAXATION INTO ACCOUNT, ARE SMALLER THAN IN COUNTIRES GOVERNED
FOR A LONGER TIME BY CONSERVATIVE GOVERNMENTS
DOES THE OECD ADDRESS THIS EXPLANATION? NOT REALLY!
THERE IS ONE THEORY DOWNPLAYING THE FINDING THAT INCOME INEQUALITY,
OF ALL THE RICH COUNTRIES, IS LARGEST IN THE USA
THE USA MAY HAVE LARGE INCOME INEQUALITIES, BUT IT ALSO HAS A LOT OF
INCOME MOBILITY
INDEED, THE USA-INEQUALITIES PROVIDE THE INHABITANTS OF THE USA WITH THE
MOTIVATION TO CLIMB UP IN INCOME
DOES THE OECD ADDRESS THIS RIGHT-WING EXPLANATION? YES!
SINCE A BOOK BY WERNER SOMBART FROM 1906
IT IS A COMMON THEORY THAT THE USA HAS MORE SOCIAL MOBILITY THAN
EUROPEAN COUNTRIESPARTICULARLY FATHER-SON OCCUPATIONAL MOBILITY
THE SOCIOLOGIST SAYMOUR MARTIN LIPSET REPEATED THIS THEORY IN A
BOOK IN 1959, AND EVER SINCE
HOWEVER, LIPSET FOUND IN 1959 THAT MOBILITY RATES ARE
PRETTY MUCH THE SAME IN INDUSTRIAL COUNTRIES
IN 1978 JOHN GOLDTHORPE FROM BRITAIN AND ROBERT HAUSER
FROM THE USA TOOK SOMBART’S THESIS NOT TO BE ABOUT ABSOLUTE MOBILITY RATES ,
BUT ABOUT RELATIVE MOBILITY CHANCES
RECENT DATA OF SOCIOLOGISTS SHOW THAT RELATIVE MOBILITY CHANCES ARE
HIGHEST IN THE SCANDINAVIAN COUNTRIES AND QUITE LOW IN THE USA
HOWEVER, SOCIOLOGISTS MEASURE MOBILITY WITHIN A SYSTEM OF
CLASSES OR ALONG AN OCCUPATIONAL PRESTIGE SCALE
ECONOMISTS LIKE TO STUDY INCOME MOBILITY
THE FIRST STUDIES ON FATHER-SON INCOME MOBILITY FOR
UNREPRESENTATIVE SAMPLES FOR THE USA FOUND CORRELATIONS OF AT
MOST 0.2 FOR FATHER’S YEARLY INCOME AND SON’S YEARLY INCOME
SOME DECADES LATER
THIS WAS MUCH LOWER THAN THE CORRELATION OF AT LEAST 0.4 THAT
SOCIOLOGISTS FOUND WITH RANDOM SAMPLES BETWEEN
THE OCCUPATIONAL PRESTIGE OF FATHERS AND SONS
LATER STUDIES BY ECONOMISTS ON INCOME MOBILITY COMPUTED THE CORRELATION BETWEEN FATHER’S
INCOME AVERAGED OVER THREE YEARS AND SON’S INCOME AVERAGED OVER
THREE YEARS
THEN THE CORRELATION ROSE TO ABOUT 0.4
THE SOCIOLOGISTS HAD COME UP WITH THE RIGHT VALUE
OCCUPATIONAL PRESTIGE STANDS FOR LONG-RUN INCOME
THIS IS THE OECD RESULT ON INCOME INEQUALITY AND
INCOME MOBILITY
FORGET THE RIGHT PART OF THE FIGURE
HIGHER INCOME INEQUALITY GOES TOGETHER WITH LESS
INCOME MOBILITY
OF LATE, THE OECD HAS BEEN MAKING THE HEADLINES WITH PISA
PISA = THE PROGRAM FOR INTERNATIONAL STUDENT ASSESSMENT
FOR PISA, LARGE NUMBERS OF STUDENTS AGED 15 YEARS FROM THE OECD MEMBER COUNTRIES MAKE STANDARDIZED TESTS ON LANGUAGE COMPREHENSION AND
MATHEMATICS
PISA ALSO COLLECTS DATA ON THE SCHOOLS OF THESE STUDENTS, ON THEIR
TEACHERS, AND ON THEIR PARENTS
THE RANKINGS OF COUNTRIES AFTER THE SCORES OF THEIR STUDENTS TEND
TO CAUSE POLITICAL UPROARS IN SEVERAL COUNTIRES
FOR INSTANCE, GERMANY WAS SHOCKED TWO YEARS AGO ABOUT ITS
LOW RANKINGS
THE HIGH RANKING OF FINLAND BELIED THE HYPOTHESIS THAT IF TEACHER’S PAY
IS HIGHER, STUDENT’S SCORES ARE HIGHER TOO
FINNISH TEACHERS ARE NOT PAID A LOT
PISA’S BOSS ANDREAS SCHLEICHER ANSWER TO A QUESTION OF A JOURNALIST IN THE INTERNATIONAL HERALD TRIBUNE OF
NOVEMBER 12, 2012
Q: I WANT TO ASK YOU ABOUT A RESULT OF YOURS ON CLASS SIZE
A: IT IS CLEAR THAT IF EVERYTHING ELSE IS EQUAL, A SMALLER CLASS IS BETTER THAN A LARGER CLASS. BUT THAT IS NOT THE RIGHT QUESTION. THE RIGHT QUESTION IS: IF YOU HAVE ONE
DOLLAR EXTRA TO SPEND, DO YOU PUT IT INTO A SMALLER CLASS, A BETTER TEACHER, MORE LEARNING TIME? WHAT OUR
RESEARCH VERY CLEARLY SHOWS IS THAT IF YOU HAVE TO MAKE A CHOICE BETWEEN A GREAT TEACHER AND A SMALL CLASS,
CHOOSE THE GREATER TEACHER .
STUDIES LIKE PISA, STUDIES COLLECTING SCORES FOR STUDENTS, CHARACTERISTICS THEIR
PARENTS, THE SIZE OF THE CLASS THEY ATTEND, THE FINANCING OF THEIR SCHOOL ,
WERE UNDERTAKEN IN THE USA IN THE 1960S
ACCORDING TO HAUSER, THEIR MODEL IS NOT TO BE FOLLOWED, WHILE PISA DOES
HAUSER SAID SO AT SENATE HEARINGS
HE REPEATED THIS AT THE MEETING OF THE RESEARCH COMMITTEE ON SOCIAL
STRATIIFICATION AND MOBILITY IN YALE IN 2009
HAUSER’S ARGUMENT IS THAT PISA IS CROSS-SECTIONALWHILE DYNAMIC DATA ON THE SAME STUDENT ARE
NEEDED
A STUDENT THAT MOVED FROM A BAD SCHOOL TO A GOOD ONE IS TREATED IN THE CROSS SECTIONAL
ANALYSIS AS A STUDENT WHO HAS ATTENDED ALL HIS LIFE THIS SCHOOL
BUT EXPOSURE TO FIVE YEARS OF A BAD SCHOOL IS NOT WASHED OUT BY ONE YEAR AT A GOOD SCHOOL
SCHOOL EFFECTS SHOW UP GRADUALLY: THEY ARE WEAK IN THE FIRST YEAR, AND BECOME STRONGER LATER
PISA’S STUDENTS ARE ALL IN THE SAME CLASS AND OF THE SAME AGE
TO PARAPHRASE SCHLEICHER:
IF YOU AS A RESEARCH SOCIOLOGIST HAVE ONE DOLLAR EXTRA TO SPEND
WOULD YOU SPEND IT ON REPEATING CROSS SECTIONAL RESEARCH FOR OTHER STUDENTSOR WOULD YOU SPEND IT ON RESEARCH FON
THE SAME STUDENTS SOME YEARS LATER?
ACCORDING TO METHODOLOGY TEXTBOOKS THE ANSWER IS CLEAR: FOLLOW BEGINNING
STUDENTS THROUGH THEIR EDUCATIONAL CAREER
UNCLARITIES AND ERRORS OF PISA AND THE OECD
THIS IS THE MAIN DIAGONAL OF A MOBILITY TABLE
A CURIOUS READER WOULD ALSO LIKE TO SEE THE OFF-DIAGONAL CELLS
MEN FROM THE BOTTOM FIFTH HAVE FOUR STEPS TO
TAKE TO THE HIGHEST FIFTH, MEN FROM THE MIDDLE
FIFTH TWO STEPS
THERE IS LESS MOBILITY OF FOUR STEPS THAN OF TWO STEPS IN BOTH COUNTRIES
IS THIS ENLIGHTENING?
MOBILITY OF FOUR STEPS IS LESS COMMON IN THE USA
THAN IN DENMARK
HOW ABOUT MOBILITY OF ONE STEP UP AND ONE STEP DOWN?
IS IT POSSIBLE FOR A PERSON IN THE TOP QUINTILE TO GO ONE STEP UP?
IS IT POSSIBLE FOR A PERSON IN THE BOTTOM QUINTILE TO GO ONE STEP
DOWN?
OECD, EDUCATION AT A GLANCE 2012, PAGE 104CHART 6.1
PROPORTION OF 20-34 YEAR OLD STUDENTS IN HIGHER EDUCATION WHOSE PARENTS HAVE LOW
LEVELS OF EDUCATION
PROPORTION OF PARENTS WITH LOW LEVELS OF EDUCATION IN THE TOTAL POPULATION
THE ODDS OF BEING A STUDENT IN HIGHER EDUCATION IF PARENTS HAVE LOW LEVELS OF
EDUCATION
WHAT ARE ODDS?COMPUTE ODDS
RATIOS!