What Harford Didn’t Say About Statistical Discrimination

Saturday, February 16th, 2008

I was perusing Tim Harford’s new book, The Logic of Life, at the book store the other day — his old book is The Undercover Economist — and I stumbled across the chapter on “rational racism” — which he bends over backwards to deplore.

Bryan Caplan looks at What Harford Didn’t Say About Statistical Discrimination in his new book:

As Tim asks, “Why bother to get a degree or work experience if you are young, gifted, and black?”

But is it really true that the market fails to reward blacks for getting more education? Is it even true that the market rewards them less? I tested these claims using one of the world’s best labor data sets, the NLSY. The results directly contradict Tim’s self-fulfilling prophesy story. Blacks actually get a substantially larger return to education than non-blacks! The same goes for experience, though the result is not statistically significant. The real lesson of the data is that if you are young, gifted, and black, you should get a ton of education, because it has an exceptionally large pay-off.

Why would this be so? I’m not sure, but one simple story is that counter-stereotypical behavior stands out. When my sons were young, my wife was working a lot, so I often took my kids places on my own. Funny thing: Time and again, strangers came up and said, “Wow, you’re such a great dad!” But there were moms of young kids doing the same thing in plain sight, and the strangers rarely praised them. Why not? Because a dad taking care of two babies is counter-stereotypical, which grabs people’s attention.

Purely anecdotal, yes. But it is consistent with the small academic literature on counter-stereotypical behavior. If you clearly violate expectations, people not only notice; they often over-react.

The upshot is that stereotypes may actually be self-reversing rather than self-fulfilling. The marginal payoff of distinguishing yourself from the pack is high if people think poorly of the typical member of the pack.

Bryan says much more; read the whole thing.

What’s interesting is that Harford has responded to Caplan’s complaints.

The politically incorrect Steve Sailer adds his own comments:


As I’ve mentioned before, it’s in your overall best interests to stay away from writing about race.

A. There’s too much danger of getting your career Watsoned if you follow the facts out to their logical conclusions.

B. But when you try to come up with something politically correct enough to say publicly about such a potentially career-killing topic as race, you start to lose the respect of EconLog, Marginal Revolution, and the handful of other elite sites whose respect you are smart enough and honest enough to crave.

Writing about race is a no-win situation for you, so why don’t you just avoid the topic for a few years?

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