>> "It should not be that hard to take income (or labor income) and regress against educational level and get a pretty good sense of how much inequality is related to educational achievement, and how returns to education have changed. My gut feeling is it explains some of it, but education has not that much to do with the vastly increasing income share of the top 1%. One man's 'stochastic' is another's 'uncorrelated'."
I think Mankiw is actually right about the 'stochastic' returns to education- but he isn't admitting the real reason. I believe it's because the returns to going to a select few schools studying a select few things do create outsized returns. I.e, graduating from a Harvard/Stanford MBA or Law program makes it much more likely to place you top 1%. The number is institutions that this is true for is very small. In a sense, I don't think the actual 'education' is causing this stochastic return, but the people you meet and opportunities people get at the oligarchical institutions.
I think Mankiw is actually right about the 'stochastic' returns to education- but he isn't admitting the real reason. I believe it's because the returns to going to a select few schools studying a select few things do create outsized returns. I.e, graduating from a Harvard/Stanford MBA or Law program makes it much more likely to place you top 1%. The number is institutions that this is true for is very small. In a sense, I don't think the actual 'education' is causing this stochastic return, but the people you meet and opportunities people get at the oligarchical institutions.