Goldin and Katz on Education, Technology, and Growth

For those of you who like a little more serious brand of economics, Harvard economists Claudia Goldin and Larry Katz have an excellent new book entitled The Race Between Education and Technology.

Here is what I said about it on the book jacket:

A masterful work by two leading economists on some of the biggest issues in economics: economic growth, human capital, and inequality. There are fundamental insights in the book, not just about our past, but also our future. Rigorous, but not overly technical, this beautifully written book will appeal to educated lay people and economists alike.

It tells the story of how the United States got a head start on education relative to other countries, how that head start helped us to achieve economic dominance, and how we’ve now lost that educational advantage. It also details the fascinating interplay between technology and education — how the forces of supply and demand have swung back and forth on those dimensions, and how much of the major changes we have seen in the economy can be explained by just a few key factors.

Gary Orfield

This analysis, like our studies in so many areas of educational opportunity, shows that the country has been on the wrong course since l980, raising costs too fast and radically under investing in higher education and redefining it as a private good to be allocated by income and wealth, while our competitors have swept past us. The problems will become all the more serious, as we go forward,

unless we seriously change policies because the most rapid growth in our population is among groups that have the least education and the worst preparation in inferior schools segregated by race and poverty.



Pre-modernity, countries were acquired at great cost for few resources.

America was acquired by gunpowder-age colonists from stone-age natives at relatively small cost.

Resources per population in the US is still much higher than Europe (excluding Russia) or China.

(Also, I'm pretty sure the steam engine was a Brit invention)


Let me save everyone the cost of a book. The nuanced explanation:

1) Reagan.

2) Thatcher.


i'm more than a bit skeptical of econ books that try to explain anything of significance. i know it's irrational to be so put off by a single 'Flat' book, but that's the truth.

i have read 'econ lite' books by Chomsky, Bovard, Palast, etc., but Harvard professors? Will they have any connection to reality? I mean, what good is an analysis if every action ascribed to the U.S. government and multinational corporations is benevolent by definition?

I never got the impression that education had much to do with relative U.S. economic advantage. I mean, there was some minimal amount of education we needed to allow so we could get the manager class sufficiently trained up and indoctrinated, but our economy seemed to still be rockin even after Reagan/Thatcher started getting rid of education and the middle class. I always figured our economic dominance was due to a lack of natural enemies nearby (separation by at least two large oceans; Jared Diamond), worldwide econ dominance after WWII through Bretton Woods and the Marshall Plan, and the fall of the only other counterbalance (USSR) to worldwide U.S. hegemony in the later stage of the century. I might add in the dozens of coups and assasinations and wars of aggression and terrorism committed by the U.S. government, just because, in total, they had to represent some significant amount of economic benefit for U.S.-based corporations (bananas, oil and gas, etc.).



Couldn't agree with SciEd more. Broad based curricula is the quickest way to diminish talent in a population. I am doing a Dip Ed here in Australia and much of the reflective work discusses how to be inclusive of marginalised kids. The entire text mentioned gifted children once and that was only an aside. But gifted children, especially those specifically gifted, also experience many problems because often they think differently about subjects and are told they are wrong because of itor because they are spending time on subjects in which they have no interest and losing it in the subjects they are passionate about.


Just wondering...have any of you read the book? Enjoyed everyone's comments (esp. SciEd), but didn't know if they pertained to the book. I haven't had a chance to read it, but I am interested to know where we are headed. I see the declining value of a college degree, while many vocational trades are paying in the six figures. Is this where we are headed? Just approved a 1.7 million dollar vocational training facility at a higher education facility...hoping that it will help lead our area in the right direction.


I am looking forward to reading the book. In the mean time, I would like to comment on my observation of a current problem in US education.

Education should be available to all, and should be of high quality. That said, curriculum should not be the same for all students. Those with greater academic interest and abilities should be able to advance academically beyond those who may be more interested in vocational training than academic training. (The issue of how to best allocate students to the two categories, without prejudice is a topic for another time.)

The current body politic insists on providing identical education to all, regardless of interest or talent. This leads to a degradation of the level of educational achivement at the higher end. After all, it is this higher end that has traditionally led to greater productivity and discovery by society. Currently, for the sake of equality, our eductional goals are trending towards the lowest common denominator.

An interesting study of recent educational achievement was discussed last week in the NY Sun. It makes for interesting reading.

Science Editor

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When, as today, there is a shortage of educated people, those getting an education will steer towards fields that are the most lucrative for the least effort. In the U.S., this has meant things that involve law, sales and financial manipulation. Much of the shortfall has been picked up by encouraging the immigration of doctors and nurses, scientists and engineers plus others disciplines requiring hard work and a good pre-college, educational background. When you are unable to attract such people, your economy will really go into a tail spin.


The average American student understands that eschewing a degree in science, mathematics, or computer technology does not prevent one from earning a decent standard of living. In fact, earning a two year degree can provide one with a decent wage. The caveat is the willingness of the individual to discipline himself - work diligently and patiently.

American education is not parting ways with modern technology and science, students are. Learning key concepts in science and math require more effort than most disciplines, especially when there is only one answer - two plus two will never be five, but one could argue all day long about the sociological effects of a dearth of computers in poorer homes.

A. Nonny Mouse

In a country where more people believe that the sun revolves around the Earth (20%), not to mention astrology (25%), UFOs(34%), ghosts(40%), witches (28%), reincarnation (21%), angels(68%), miracles (73%) and such than accept the scientific theory of Evolution (without some god's guidance) (14%), you might find some clue as to why American education is parting ways with the growth of knowledge of modern technology and science.

[All percentages from Harris Poll except for Evolution, from CBS News Poll.]


dan p

#6 - Sure, resources played a part, but we're certainly not running out of them (except maybe fresh water) anytime soon. And it's not as if every single other country out there didn't cheat and steal its resources either.

Our economic advantage was primarily based on our technological innovations such as the steam engine, assembly line, microchip, etc.

However, it is cheaper for a country to acquire technology (or steal it, as many do) then to develop said technology itself. So they'll lag behind in technology for a while before they catch up (think about the nuclear bomb, and how just about anyone who wants it can have it now).

Now that many of these countries have caught up with us in education as well (if not surpassed us), they can innovate too.


#7 (dan p)

I suppose that you can continue to "decimate" the English language by not correcting misuse.

Besides, it was a joke; everyone knows the non-clergy meaning to the word.

dan p

Mark (# 3) - Lay people refers to both those not in the clergy as well as to those who do not belong to a particular profession or who are not an expert in some field (which is clearly what Levitt meant).

# 5 (Mike) - It is a stretch to make the suggestion that sociology is something that can 'be argued about all day.' Good sociology work is based upon empirical evidence, such as statistics proving those with home computers do better than those without. The debate is deciding how to address the problems, not what the problems are.

Even philosophy, the most debatable of educational subjects, is grounded in logic, which is a key concept in math.

Perhaps students deserve some of the blame, but so does the system for making them complacent.

dan p

Am I just cynical or does 'educated lay people' seem like a contradiction?


My hunch would be that our economic advantage was due to getting land and resources for free (aka stealing it), and now that we've run out of land and resources to steal, our advantage is slipping away.


Finally a book addressing this phenomena. I will certainly have a read.


It is very possible for a person that is not in the clergy to be educated, where is the contradiction?

The bigger question is why Educated Clergy who are not also economists would not enjoy the book.