A recent AER paper used data on what 20,000 college freshman in 2012 thought they would earn upon graduation, on what they actually earned in 2017, on stats of the sort that finance firms could easily get on these students in 2012, and private estimates by these students, as freshmen, of what they’d earn in 2017.
Interesting ideas, but as a novel, it sucked. Hard.
The concept is everyone at birth is "incorporated". The government owns 5% of your shares, and never buys or sells them. That is the only taxation, that is their revenue. 20% goes to your parents for raising you. The rest is yours.
Most people own a minority position in themselves due to paying for education and etc. And if you are high earning, your shares are so high its hard to buy back a majority. But that is many people's goal, to own a majority of themselves.
One of the problems is it didn't really detail how most people got to such a low percentage. Or at least I don't remember those details, unlike above.
I would think that the obvious use case for this on a 5 year post grad timeframe that avoids adverse selection is as a way to expand Pell grants/scholarships. High achieving high schoolers who can’t afford college would be more likely to take this deal than college freshmen who have already made the gamble
I'm unsure about this proposal. I imagine some reasonable portion of student's private knowledge is their detailed career plans. Not sure markets would solve this, wouldn't every student who needs a loan just tell everyone they want to become a neurosurgeon, meaning that actual information about career plans is very hard to gather?
"Those markets would surely aggregate a lot of info about each student, yet offer only very weak incentives for sabotage. And they’d be a lot of fun."
Are we sure this isn't a massive bully vector and *not* a lot of fun? I get that the kid can go and prove his/her friends wrong and make money doing so, but I'd imagine more kids becoming completely discouraged. I guess the school could set up a fund to step in and make bets on students with good grades who are under priced? But that's even more embarrassing!
Well, to be clear, it could work (positively) for a lot of humanity, I agree.
And I’m willing to accept the intuition that for society as a whole it would be positive.
But it’s pretty undeniable that not only would it not help *everyone*, there indeed would be some (mentally fragile) people who would be made worse by this, no?
I'm a bit confused. Surely there is a distribution of beliefs and risk tolerance and some students would take the deal. Or does the data go further and basically show that if you go through the full curve there is no equilibrium?
But to show that it seems like what you need is information about what deals students who don't now go to college would take and that seems hard to get. Especially given that the more information that finance firms can collect the less of an issue presented by adverse selection.
This is the kind of thing that science fiction can be really good for, showing how this might actually work with (fictional) personal examples.
The Unincorporated Man.
Interesting ideas, but as a novel, it sucked. Hard.
The concept is everyone at birth is "incorporated". The government owns 5% of your shares, and never buys or sells them. That is the only taxation, that is their revenue. 20% goes to your parents for raising you. The rest is yours.
Most people own a minority position in themselves due to paying for education and etc. And if you are high earning, your shares are so high its hard to buy back a majority. But that is many people's goal, to own a majority of themselves.
One of the problems is it didn't really detail how most people got to such a low percentage. Or at least I don't remember those details, unlike above.
I would think that the obvious use case for this on a 5 year post grad timeframe that avoids adverse selection is as a way to expand Pell grants/scholarships. High achieving high schoolers who can’t afford college would be more likely to take this deal than college freshmen who have already made the gamble
It might be useful to cut out a few middle men in the learning to vocation pipeline first, before optimizing a system.
Speculation on this would be fun either way though!
I'm unsure about this proposal. I imagine some reasonable portion of student's private knowledge is their detailed career plans. Not sure markets would solve this, wouldn't every student who needs a loan just tell everyone they want to become a neurosurgeon, meaning that actual information about career plans is very hard to gather?
"Those markets would surely aggregate a lot of info about each student, yet offer only very weak incentives for sabotage. And they’d be a lot of fun."
Are we sure this isn't a massive bully vector and *not* a lot of fun? I get that the kid can go and prove his/her friends wrong and make money doing so, but I'd imagine more kids becoming completely discouraged. I guess the school could set up a fund to step in and make bets on students with good grades who are under priced? But that's even more embarrassing!
Don't grades already do that? Should we eliminate grades for this reason too?
"I always knew you were a loser Billy. Looks like everyone else does too."
Why are we interested in a tiny subset of humanity's income? What are we doing about the rest of humanity where real change is needed?
This can work for them as well.
How?
Well, to be clear, it could work (positively) for a lot of humanity, I agree.
And I’m willing to accept the intuition that for society as a whole it would be positive.
But it’s pretty undeniable that not only would it not help *everyone*, there indeed would be some (mentally fragile) people who would be made worse by this, no?
I'm a bit confused. Surely there is a distribution of beliefs and risk tolerance and some students would take the deal. Or does the data go further and basically show that if you go through the full curve there is no equilibrium?
But to show that it seems like what you need is information about what deals students who don't now go to college would take and that seems hard to get. Especially given that the more information that finance firms can collect the less of an issue presented by adverse selection.