Off the top of my head, there's a couple of notable differences between Germany and the Nordic countries:
(a) The Germanic lands are notable male-loaded in tertiary enrollment rates, and STEM degrees account for a relatively higher proportion of all degrees. In fact, I believe Germany and Switzerland (but not Austria) are like the only two European countries where there are more male university grads than female.
(b) The rate of German university attendance is notably lower than one would expect from its level of development (whereas it is extremely high in the Nordics). Presumably, a legacy of its apprenticeship culture, though I imagine that's largely gone by the wayside these days.
Anyhow, if university admissions are more selective and elite loaded, and that's one of the main factors used in measuring "human capital", then one can expect the returns to brains to be higher in Germany than the European norm. I would further guess that these returns are higher in the west and south, and lower in the east.
Otherwise, America ofc keeps taking W after W.
Random fun fact: Maoist China seems to have been historically unique or close to that in that returns to education there were ZERO. This was never true even in the USSR.
A nitpick on the last paragraph though. Israel has a lot of garbage on the streets and a very high cost of living. Estonia is squeaky clean but middle-of-the-pack in cost of living. The correlation doesn't seem to be very good (especially once you limit yourself to countries where chances of getting robbed on the street are low).
"We get the unsurprising result that USA gives the most bang for the IQ buck, and Sweden the lowest: a high of 28% in USA, and 12% in Sweden. In fact, all the Nordic countries are in the bottom, though strangely Germany is near the top. Are they really so different in returns to skill?"
they really are so different in returns to society - we get the unsurprising result that on the GINI scale of wealth inequality, the US is in the upper third at 39.7 (only two places below Bulgaria at 40.5); and the Nordic countries are among the lowest in inequality: Sweden, 28.9/Norway, 27.7/Denmark, 27.5
Two especially fascinating observations. "Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares." "... around a fifth of the gender wage gap in the pooled sample is attributable to gender skill differences ... on the numeracy test, men scored 0.20 SD, or about 3 IQ higher. ... it explains statistically about 20% of the gap in hourly wages."
How so? The first seems obvious and is addressed later in the article in his discussion about the Nordics.
The second suggests that male skills are more valuable economically. Given the steady multi-decadel decline in Total Fertility Rate, seen as women have moved into the paid economy, to well below population replacement rates and the long term threat to economic growth this poses, perhaps a societal re-evaluation will occur.
I agree about the first, that it should seem obvious, although apparently not to all people. Its significance is that it addresses one of the important differences between the two dominant parties in my country, the USA. Democrats are very pro-union, pro-employment-protection and favor public-sector shares. Republicans are generally less favorable to these, if not outright opposed
For political parties, overall country economic strength is a secondary benefit, and only insofar as it leads to election of the party to which it is attributed, with or without just cause. Being pro-union can lead to election, for instance, yet not be in the best interest of citizens overall. There are perverse incentives.
I agree with your inferences in your second paragraph, too. Very good points. I look forward to more open discussion of some consequences of feminism, which had negative as well as positive effects.
Just on the marginal tax rate graph, I'm guessing those are the highest marginal tax rates "on paper"? For instance, in the UK once you hit an annual salary of £100k two things happen:
1. The gradual loss of your personal allowance (£12,570 of tax free earnings)
2. The loss of tax free childcare
The personal allowance loss puts most people at a marginal rate of around 60%, but the free childcare loss is equivalent to a marginal tax rate of more than 100% (yes, you read that right).
Also, a lot of the population have student loans now, which increase the rate further (by 9% if you have an undergraduate loan, and an additional 6% if you have a postgraduate loan as well).
One more thing to note is that working remotely overseas can be a headache for employers, especially for more senior employees. Before you know it, your employer could need to start paying employer social security overseas. Or another popular one: the employer suddenly becomes chargeable to corporate tax in a country they have no presence in due to a Permanent Establishment created by an employee.
The standard objection to this (and similar) results is that the measures of intelligence used all endogenous and produced by education, so the interpretation of the results and the causal direction are in doubt. One can use PGS/PGI and then the interpretation is much clearer. We did it in the JPE paper Educational Attainment and Intergenerational Mobility: A Polygenic Score Analysis.
A bit silly. Gains from education are tiny and mainly related to knowledge tests, not g. But it doesn't matter from the perspective of this article, since it is just showing the gains in money per IQ, no matter how IQ is caused.
Off the top of my head, there's a couple of notable differences between Germany and the Nordic countries:
(a) The Germanic lands are notable male-loaded in tertiary enrollment rates, and STEM degrees account for a relatively higher proportion of all degrees. In fact, I believe Germany and Switzerland (but not Austria) are like the only two European countries where there are more male university grads than female.
(b) The rate of German university attendance is notably lower than one would expect from its level of development (whereas it is extremely high in the Nordics). Presumably, a legacy of its apprenticeship culture, though I imagine that's largely gone by the wayside these days.
Anyhow, if university admissions are more selective and elite loaded, and that's one of the main factors used in measuring "human capital", then one can expect the returns to brains to be higher in Germany than the European norm. I would further guess that these returns are higher in the west and south, and lower in the east.
Otherwise, America ofc keeps taking W after W.
Random fun fact: Maoist China seems to have been historically unique or close to that in that returns to education there were ZERO. This was never true even in the USSR.
There are still a lot of apprenticeships in Germany.
In 1950 there were 1 Million apprentices and barely any students
In 2020 there were 1,2 million apprentices and 3 million students.
(Source: https://www.destatis.de/DE/Presse/Pressemitteilungen/2023/06/PD23_N036_12.html)
Ah, interesting. So that lends weight to my explanation.
Map of European male/female university degree holder ratios: https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fjbugw001kjj51.png
Very cool article!
A nitpick on the last paragraph though. Israel has a lot of garbage on the streets and a very high cost of living. Estonia is squeaky clean but middle-of-the-pack in cost of living. The correlation doesn't seem to be very good (especially once you limit yourself to countries where chances of getting robbed on the street are low).
"We get the unsurprising result that USA gives the most bang for the IQ buck, and Sweden the lowest: a high of 28% in USA, and 12% in Sweden. In fact, all the Nordic countries are in the bottom, though strangely Germany is near the top. Are they really so different in returns to skill?"
they really are so different in returns to society - we get the unsurprising result that on the GINI scale of wealth inequality, the US is in the upper third at 39.7 (only two places below Bulgaria at 40.5); and the Nordic countries are among the lowest in inequality: Sweden, 28.9/Norway, 27.7/Denmark, 27.5
Two especially fascinating observations. "Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares." "... around a fifth of the gender wage gap in the pooled sample is attributable to gender skill differences ... on the numeracy test, men scored 0.20 SD, or about 3 IQ higher. ... it explains statistically about 20% of the gap in hourly wages."
How so? The first seems obvious and is addressed later in the article in his discussion about the Nordics.
The second suggests that male skills are more valuable economically. Given the steady multi-decadel decline in Total Fertility Rate, seen as women have moved into the paid economy, to well below population replacement rates and the long term threat to economic growth this poses, perhaps a societal re-evaluation will occur.
I agree about the first, that it should seem obvious, although apparently not to all people. Its significance is that it addresses one of the important differences between the two dominant parties in my country, the USA. Democrats are very pro-union, pro-employment-protection and favor public-sector shares. Republicans are generally less favorable to these, if not outright opposed
For political parties, overall country economic strength is a secondary benefit, and only insofar as it leads to election of the party to which it is attributed, with or without just cause. Being pro-union can lead to election, for instance, yet not be in the best interest of citizens overall. There are perverse incentives.
I agree with your inferences in your second paragraph, too. Very good points. I look forward to more open discussion of some consequences of feminism, which had negative as well as positive effects.
Just on the marginal tax rate graph, I'm guessing those are the highest marginal tax rates "on paper"? For instance, in the UK once you hit an annual salary of £100k two things happen:
1. The gradual loss of your personal allowance (£12,570 of tax free earnings)
2. The loss of tax free childcare
The personal allowance loss puts most people at a marginal rate of around 60%, but the free childcare loss is equivalent to a marginal tax rate of more than 100% (yes, you read that right).
Also, a lot of the population have student loans now, which increase the rate further (by 9% if you have an undergraduate loan, and an additional 6% if you have a postgraduate loan as well).
One more thing to note is that working remotely overseas can be a headache for employers, especially for more senior employees. Before you know it, your employer could need to start paying employer social security overseas. Or another popular one: the employer suddenly becomes chargeable to corporate tax in a country they have no presence in due to a Permanent Establishment created by an employee.
The standard objection to this (and similar) results is that the measures of intelligence used all endogenous and produced by education, so the interpretation of the results and the causal direction are in doubt. One can use PGS/PGI and then the interpretation is much clearer. We did it in the JPE paper Educational Attainment and Intergenerational Mobility: A Polygenic Score Analysis.
A bit silly. Gains from education are tiny and mainly related to knowledge tests, not g. But it doesn't matter from the perspective of this article, since it is just showing the gains in money per IQ, no matter how IQ is caused.
Polygenic score info on intelligence is, er, limited to put it politely.