And I guess it has made me grumpy and the result is taking potshots at the best economics blogs. Greg Mankiw brings out my inner populist (that somehow stays inner until I read the occassional Mankiw post, weird):
Apart from their bank accounts, Gallup finds education to be the greatest difference between the wealthiest 1% of Americans and everyone else. The Gallup analysis reveals that 72% of the wealthiest Americans have a college degree, compared with 31% of those in the lower 99 percentiles. Furthermore, nearly half of those in the wealthiest group have postgraduate education, versus 16% of all others.
I hope no one really thinks that the less than 1% chance that you'll wind up earning $500k+ annually as a result of going to graduate school is the case for going to graduate school (or that the investment in human capital explains the high income). Ignoring all of the silly, nonpecuniary reasons for going to graduate school (in my case, I decided I liked economics and didn't want to search for a job), at best, I'd say this is one of those statistically significant empirical results with little economic significance. Or, at worst, a cause of correlation being confused with causality. I'm not saying Mankiw is making these mistakes, but many of his readers might given the lack of any explanation associated with the post.
Has there been any research conducted looking at the factors explaining the upper 1% in incomes? Will someone search Google Scholar for me?
Also I wonder how many of those graduate degrees are Executive MBAs (the degree that you get after you are already making more money than everyone else)?
Who do I get my grump on next? Krugman?
