There is much talk of failure of the US economy and institutions — much of it with good reason. But tangible signs of that failure are few. Some would point out to the increase in inequality as clear evidence. But there is debate as to whether this increase has been caused by non-political factors such as skill-biased technological change and globalization, or political factors; we have argued in a previous blog post that the non-political factors are unlikely to account for the behavior of the share of the top 1% in national income, but this is not convincing to those who come with different priors.
Here are some less controversial signs of American failure.
The next figure shows high school graduation rates of males and females and for both genders combined by birth cohort (year of birth). For males, high school graduation rates were highest for the cohorts born in the early 1950s; they have peaked in the late 1960s at less than 85%, and have slightly declined since then. For women, they have increased slightly. Well into the 21st century, almost 15% of the US population is not graduating from high school, even though the economic consequences of this are dire. (Moreover, this is despite the fact that recent numbers include those obtaining Graduate Equivalency Degrees, GEDs, the “second chance” high school degree for those who drop out, and the economic returns from a GED are far less clear than a regular high school degree; see, e.g., this paper).
The next figure shows that the pattern is very similar for college graduation rates. The peak for males is again in the late 1960s (for cohorts born at the end of the 1940s). Then it’s downhill, only recovering in the late 1980s and very partially — the overall college graduation rate recovers and increases thanks to the higher rate for women. (See Claudia Goldin and Lawrence Katz’s excellent book, The Race between Education and Technology and its discussion by Daron Acemoglu and David Autor here for more details on these patterns).
The next figure shows the evolution of the incarceration rates of African-American, Hispanic and white males. The US is currently locking up almost 5 out of every 100 African-American men, and most of it for non-violence crimes. Few should be able to argue that this is not a uniquely American failure.