From the new paper by Chetty and Hendren:
The last family-level explanation we consider is the controversial hypothesis that differences in cognitive ability explain racial gaps. Although we do not have measures of ability in our data, three pieces of evidence suggest that differences in ability do not explain the persistence of black-white gaps for men. First, the prior literature (e.g., Rushton and Jensen 2005) suggests no biological reason that racial differences in cognitive ability would vary by gender. Therefore, the ability hypothesis does not explain the differences in black-white income gaps by gender.
Second, black- white gaps in test scores – which have been the basis for most prior arguments for ability differences – are substantial for both men and women. The fact that black women have incomes and wage rates comparable to white women conditional on parental income despite having much lower test scores suggests that tests do not accurately measure differences in ability (as relevant for earnings) by race, perhaps because of stereotype threat or racial biases in tests (Steele and Aronson 1995; Jencks and Phillips 1998).
There’s a lot of sleight of hand going on here that has successfully confused many people, such as the four reporters who wrote this up in the New York Times. In the NYT, you can read in big type:
Large income [race] gaps persist between men—but not women.
Actually, sizable income gaps do persist between youngish white women and youngish black women. Chetty makes this real world race gap disappear statistically by adjusting for their parent’ income back in the 1990s. (Parental income no doubt is positively correlated with average parental IQ). He’s comparing relatively more elite black women to relatively less elite white women and declaring … no income gap.
Of course, a far higher percentage of white women than black women grew up in families with higher incomes in the 1990s, as the average IQ difference between the races would predict. So in 2014-2015 there is a difference in average individual income between white women and black women, as their difference in average cognitive test scores would predict.
Keep in mind that Chetty is looking at the children’s individual income but the parents’ family (or household?) income.
Chetty’s point is that black men do worse than black women when you adjust for low parental incomes. And then he demands to know how IQ theories can explain this gender gap?
Okay, but this gender gap is a secondary question, but Chetty is encouraging his interpreters to treat as if it were The Big Question.
Third, we show below that environmental conditions during childhood have causal effects on racial disparities by studying the outcomes of boys who move between neighborhoods, rejecting the hypothesis that the gap is driven by differences in innate ability.
Uh … you can’t justify “rejecting” that X influence Z by pointing out that Y also influences Z. It as if I were to say that one reason blacks are more likely than whites to be NFL cornerbacks is because they have higher average running speed, and Chetty replies, “Another reason is because they have higher average jumping ability, so therefore I am rejecting your hypothesis that the cornerback gap is driven by differences in running speed.”
What Chetty has found is, surprise, surprise, is that black male youths raised in gang-infested black slums are more likely, all else being equal, to have low taxable incomes at age 27 to 32. This is probably due in part, among many other ills, to a lot of black males raised in gang-infested slums choosing to pursue a Life of Crime.
The Wire lifestyle, at best, generates a lot of cash income that you don’t report on your 1040 for Chetty to tabulate and more likely puts you in prison, a wheelchair, or the grave. For example, his new paper lists the following examples of the Worst Places for black males to grow up if their parental income is at the 25th percentile among all Americans (across all races):
Chicago, IL: Robert Taylor Homes/Fuller Park,
Chicago: Cook County Bronzeville,
Chicago: Cook County Garfield Park,
Chicago: Cook County Englewood
Detroit: Chandler Park, Wayne County
Cincinnati: South Fairmont, Hamilton County
Los Angeles:South Los Angeles/Watts, Los Angeles County
You’ve likely heard of some of these places, such as Watts / South Los Angeles. (“South Los Angeles” is the rebranding of “South-Central Los Angeles” due to too many gang murders and riots.)
Not surprisingly, it’s better for the future incomes of black males for them to, say, have been raised in Air Force enlisted personnel housing in North Dakota than in the Robert Taylor Homes in Chicago. Should that finding lead to “rejecting the hypothesis that the gap is driven by differences in innate ability”?
Of course not.
F. Scott Fitzgerald famously said, “The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” These aren’t even opposed ideas, they are complementary, often correlated (e.g., it’s hard to be allowed to enlist in the Air Force if your AFQT score is low), ideas, but too many people can’t deal with thinking about both.