Sunday, May 01, 2005

Smarter People Think More Like Economists (from Econolog)

Bryan Caplan at Econolog believes that better educated people are more likely to think like economists. With the exception of some of my more left-wing academic friends, I'd have to agree with him.

Economics is based on the idea that there are always tradeoffs, and that every action has a cost. I think that better educated people grasp those concepts more easily.

Caplan writes:

More educated people think more like economists. It's one of the big findings in my piece in the 2001 Journal of Law and Economics. And that's controlling for income, income growth, job security, gender, ideology, and party. It's a big effect, too: Every step up a 7-point educational scale matters about 9.3% as much as an economics Ph.D.

He then goes on to discuss a Hearst Report on "The American Public's Knowledge of Business and the Economy,"from back in the 1980s:

...My interpretation: More educated people are a lot more likely to favor exceptions because they grasp, in a rudimentary way, the fact that pushing up the wages of low-skilled workers causes unemployment. Of course, this insight is so unpalatable that most well-educated people support the existence of the minimum wage anyway. But their support is plainly less dogmatic than that of their fellow citizens.
Click here for the whole article. It's not new ground, but as usual, it well stated. The debate going on in the comments is also instructive, and far more interesting because of the back-and-forth.

UPDATE: I inadvertantly attributed this to Arnold Kling, when it was actually written by Bryan Caplan. It's been corrected (sorry, Bryan...)