Inequality: skill or luck?

Inequalities are due more to differences in individuals' skills than to luck in careers. That's the message of this new study (pdf) of US incomes:

Differences in initial conditions are more important than are shocks received over the remaining lifetime as a source of variation in realized lifetime utility, lifetime earnings and lifetime wealth. We find that between 62 to 73% of the variation in lifetime utility and between 60 to 71% of the variation in lifetime earnings is due to variation in initial conditions [at age 20].

Of these conditions, it's human capital rather than identifiable ability or parental wealth that matters:

We find that a one standard deviation increase in initial wealth increases expected lifetime wealth by 3 to 4%. In contrast, a one standard deviation increase in learning ability or initial human capital increases expected lifetime wealth by 9 to 10% and 30 to 34%, respectively.

There's something here for everyone.
Neoliberals can claim inequalities are just because they reflect differences in skills. Their opponents can say this is true in the same way that it's true that differences in escapology skills explain who's in prison and who isn't. New Labour types can say it justifies its emphasis upon education as a way of reducing inequality. Others will wonder what causes differences in human capital and learning ability in the first place.

Comments

[Matt Munro]

Others will wonder what causes differences in human capital and learning ability in the first place.

One word. Genes.

[Jim]

I scanned that this morning and couldn't seem to find how they defined 'initial human capital'. So what exactly does that mean, especially as distinct from 'learning ability'?

[dearieme]

And some will marvel at "initial conditions [at age 20]". At last, someone who recognises that children and teenagers aren't human.

[Maynard Handley]

"Others will wonder what causes differences in human capital and learning ability in the first place.

One word. Genes.
"

Ah. The keen scientific insight of the rightwing mind -- you merely have to state something to be true and it is.
Makes it pretty clear that all the insane science pathology in the US, from global warming denial to evolution denial is not an aberration.

[jameshigham]

Just as the scum will rise, the cream also will and it inevitably comes down to the value of a person. This is where the Marxists have it all wrong - trying to legislate for equality. That's sheer bollocks.

[Mark Wadsworth]

"Skill or luck" what a daft question, even if we put it down to genes (which is of course true) then inheriting those genes is still down to luck, and you have to be born in the right country at the right time and so on. e.g. are today's multi-million pound footballers that much better than the top players of thirty years ago?

[TheBoy]

Everyone has luck, the true lucky are just those who know how to take advantage of circumstance. That ability can be taught, but is indeed mostly down to raw capability (eg, genes).

[Matt Munro]

Ah. The keen scientific insight of the rightwing mind -- you merely have to state something to be true and it is.
Makes it pretty clear that all the insane science pathology in the US, from global warming denial to evolution denial is not an aberration.

Au contraire - Label it "right wing" and it must be wrong ? And why are genes necessarily a right wing concept ? Creationism is, agreed, a right wing, neo-con, anti science concept, but in that case how can genetic attribution also be right wing when it is based on the polar opposite of creationism - Darwinism ?
If you knew anything about science you would know it is very hard to find a credible developmental psychologist (as opposed to a liberal/feminist sociologist on a job creation scheme) who argues against some gentic basis for IQ.