Naked Economics - Blog Entry #5

The only real way I see to save the hope scholarship is to require all students to use this program. However, this could never work because if it was done by colleges the universities that enforced this program they would loose business. If this were to be done nationwide enforced by the government there would be many appeals by very wealthy people to change the ruling. Obviously on an economic level this makes complete sense, on a moral level, this is again clearly not moral, women that will work hard and be a much better candidate than a man who could receive the job based on information a company has on women in general. I don’t think car soup hurts the effort to improve the used-car market information, but I don’t think it’s all that helpful. The used-car dealers are in a position to pay what they choose within reason obviously for the car. It seems to me that the people selling are trying to get rid of their cars instead of selling them to make a large profit. The information that the car could possibly have more wrong with it than the seller states or knows, and the car dealer can use this information to lower the price. Also, I have trouble believing that the people selling the cars, for the most part, have a large knowledge of cars and could be told by the dealer that there is a lot wrong with the car and whether or not it’s true the seller can do very little.

I believe that these professional women that are quitting after a maternity leave or during a maternity leave are imposing a cost on other women. Not an actual money cost, but a figurative cost because these firms are seeing that a lot of women might all of sudden decide they love their new born child more then their job. (Now in my opinion after spending three straight years with a child and after the terrible twos and terrible threes, as I call them, I would say these women are crazy because I would want to get out and have a job and feel like I can do more with my life especially if I had worked so hard on my education.) Nonetheless, they are imposing a cost because they are showing these firms that women do choose to leave once having a baby. The cost of this might be put on the next women even though this new women might be totally against having a child and doesn’t want a personal life and only wants a professional life and wants her career first in life and nothing else. The cost to that women is that the firm might believe that she is just like the rest and they don’t want to take the risk on her and then she wont be hired because they think they will loose to much by hiring her. I think that because women do this I can’t blame these firms for thinking about that when hiring a women. Yes it isn’t fair but it happens and if I were a man hiring a women that would be part of my thought process; “are we going to loose this women is 6 months once she decides to get pregnant?” That risk and cost to firms is very hard and difficult especially the higher up or more specialized that women position is because they are paying her while she is gone and not doing work. Also another risk and cost is that fact that they have to find a replacement, which is not that easy especially if the position is a special or high up one. I think Wheelan is completely correct in stating this.

Yes I can propose a way to save the "Hope Scholarship", simply do the same as insurance companies do: i.e. make it a blanket scholarship that one does not have the choice of whether to accept it or not, whether this is rational, or ethical can be debated, as it is forcing those with higher future incomes to pay more.

Secondly, the women who take the maternity leave money and run are putting a cost on other women in more than one way. First, the straight equality cost, a company getting burned by female employees leaving after they go on maternity leave has a reason to discriminate against women pretty much always. Second, it reflects badly on the morals of women in the eyes of the company if one or more does not come back after paid maternity leave, and finally, economically a company that has lost too much money too many times to women not coming back after maternity leave will more than likely slash its maternity benefits.

(Question 5) (Note that when I refer to Ivy-league schools, I am referring to them as symbol of all prestigious, high-caliber universities/ colleges.) Krueger states on page 95, “Don’t believe that the only school worth attending is one that would not admit you… Recognize that your own motivation, ambition and talents will determine your success more than the college name on your diploma.” This statement is spot on. I completely agree with the fact that a college education is only as good as you make it. It is entirely up to the student to get all that college has to offer, but I do highly value an Ivy-League education for several reasons. First off, I feel that the Ivy-League does serve as a “Roger Ebert’s ‘thumbs up.’ ” I truly believe that by going to a Harvard caliber school, you are given many more job, research and further schooling opportunities upon finishing your undergraduate education. Second, I believe that an Ivy-League education gives students the opportunity to work with many of the world’s top researchers and professors. It gives students the opportunity to learn from some of the brightest minds in the world. Now, this doesn’t mean that all Ivy-League professors are good or that professors at other universities are bad. I just believe that most Ivy-League schools, especially those that emphasize undergraduate education, generally have amazing professors and many amazing research opportunities. I also believe that Ivy-League schools generally give students some amazing intern opportunities abroad. Third, and in my opinion is the most important reason for going to an Ivy-League school, the students. Going to a school of this caliber allows students to be surrounded by many bright peers interested in many of same things that you are. I really think that is extremely valuable because it allows you to bounce ideas and learn new schools of thought from the peers all around you. It prepares you for the real world. Now, this experience occurs at all schools, but I feel at Ivy-League schools, you know that you are surrounded mainly by extremely bright and highly motivated students. For these reasons, I highly value a “Harvard-like” education.
Now, to address the “chicken/egg” question, does the education at these prestigious schools make the student or was the student already extremely intelligent and motivated upon beginning their undergraduate education? I believe that the latter is true. These students that go to these highly selective schools are already extremely motivated and intelligent. They have worked hard their entire lives to be able to be accepted into one of these schools. My belief, however, is that these highly selective schools are capable of nurturing these students more than other more moderately selective colleges. One reason that this may be the case is that these highly selective schools have more resources than most other colleges. These Ivy-League schools generally have very large endowments and access to multitudes of information and teaching talent. In conclusion, I would like to reflect back on the Krueger quote at the beginning of this entry. College is what you make it.

2. Sure, women who take maternity leave or quit after having a chile impose a cost on other women, but it's a natural part of life and is necessary for the survival of human kind. It is not fair at all for a company to discriminate by saying a woman can not work their (if she's qualified) for the reason of maternity leave alone. Women deserve just as many rights as men, and shouldn't be turned down when they take leave to do the most important job, have a child. It may not even be economically smart to continually turn down women, for if they are turned down enough, who's to say there won't be another movement by women? They strike, and there won't be any in the workplaces... This would be much worse than women leaving for a couple of months to have and raise a child.

2. "More important, they [professional women taking maternity leave and/or quitting] impose a cost on other women." (page 83) I'm simply asking you to react to this analysis. You can do this at an economic level, an equality level, a moral level, or whatever combination of levels that work for you.

I think the cost imposed on women who go on maternity leave, is to a certain extent unavoidable. As long as women continue to have babies other women will be affected and that is just the way of life. In regards to women who quit after being on maternity leave I also think that is something that is sometimes unavoidable. Having a baby changes your life so much and I think women who are expecting to go back to work don't necessarily realize quite how big of a change it can be. The result being they quit after having their baby. I think employers more so than ever now need to look past the fact that if they hire a female, maternity leave is a possibility. Unless someone can figure out an alternative solution there is no way around it.

Question #6

Of course race and ethnicity conveys meaningful information. It is the what everyone has been brought up to believe. You see an African American, he/she is either a convict, or a professional athlete. You see someone in a fancy suit, he/she is rich. You see a spiked hair white boy wearing Hollister clothing, he is a loser. So, what do we do about this? Well, there is nothing really to be done. Send out a worldwide email stating that racial profiling is unlawful, I doubt that that can be implemented. We can talk about how wrong racial profiling is until are tongues fall out, but the fact is there is no way to prevent it.

The issue of racial profiling is one that can not determined to be positive nor negative. It can be beneficial for everyone to bring in different perspectives and experiences. If a school or a business is looking to diversify, it depends on the aims of the school. It can be helpful to lower prices, as long lowered prices is made public and everyone understands the aims of the school. However for the most part, racial profiling can be discriminatory. Wheelan's story of police using racial profiling to catch drug dealers is one example of many that uses discrimination. It is unfair to those targeted because of an uncontrollable piece of themselves. Because of this we create laws that prevent businesses from discriminating for or against individuals. If there is evidence of discrimination, a business should be allowed to be questioned.

Most of you are headed off to college next year. Take a crack at the "chicken/egg" question about the value of a "Harvard-like" education that is introduced on pp. 93-94. (You can also react to the results of the Krueger study.)

I would agree with Wheelan's idea that Harvard simply accepts more intelligent or qualified students to begin with, rather than students become that way because they go to Harvard. That's not to say the classes at Harvard aren't still difficult and challenging, but I don't think we can specifically thank ivy league for producing people who earn higher wages in the future. Like Krueger's study showed, what matter's most is if the person was, for example, more intelligent to begin with. It hardly made a difference what type of college they went to, if they started out smart in high school, it's most likely they will stay that way and it will help them in the future. If all this is true, though, then we could be proving that there is much greater value in a good High School education. Maybe parents should consider spending some extra cash providing their child with the best High School education they can, and then can save later on college. However, there would still be benefits to sending someone to Harvard or Yale, because generally speaking the courses would be more challenging and innovative when preparing for a future career.

(Question #3)

From what I have gathered, being I'm entirely new to the market of used-cars, car owners will often hide their vehicle's flaws, while consumers will predetermine that the owners are already lying, so they demand a discount. The problem in used-car shopping lies in the mistrust and dishonesty from both ends of the deal. Even if a car owner does not lie about the condition of his vehicle, if the consumer thinks he is indeed hiding some things, he will demand a different price, which the owner can either take, or decide to lose the offer completely. Used-car technology should incorporate an entirely unrelated source into the process, where car mechanics/experts would observe and value the car themselves. This way, the owner could not skip over important details, while also assuring the consumer that they are not getting cheated.

Well i have to say that it is true though the amount of women leaving the work force after having kids is decreasing. Also it is unequal for companies to hire based on sex even though the women might be taking up more money than men. Though if they do hire women then they would have more incentive to work harder to show/demonstrate their worth/skills at their job. Companies have made it so it is now better for women to stay in the work force after kids, which is a good thing. Mainly because it makes it so women work more and then can dispel the idea that they are bad employees/holes to throw money into.

On the chicken and the egg question on Ivy League or similar universities the answer seems more like both. People who score well on tests are attracted to those schools while admissions keeps all but he best of the best from entering. But that is not the end of it when all of the students are a the school it attracts good teachers and good debate so it is a very good place to learn. Asking whether going to an Ivy League school and paying for the brand name is worth it is a different question. Whereas going to an Ivy might get you a better first job because of the name you will also have to pay much higher student loans for tuition. So I would say it is not worth it to pay for an Ivy League for undergraduate.

I agree with what the book says about a Harvard education being mostly based on the name. The people who are admitted to institutions like Harvard are most likely going to succeed in whatever situation you put them in (except keeping us out of a recession apparently). This idea is similar to sports where no matter how long I practice my basketball skills I will never be able to make it into the NBA because I never will be able to jump 12 feet in the air. The students who get into Harvard have more talent than the ones attending a community college so it does not matter how great the teachers are at either school, the students admitted to Harvard will still be more successful. Harvard doesn't admit average people to demonstrate their mastery of education because they know that those people don't have as great of a chance to be successful.