## THE TALENT EQUATION

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### Definition and scope
- Talent is defined as "the capacity to solve novel problems efficiently in a person’s late teenage years."
- Shaped by innate abilities and accumulated learning; manifests in speed of grasping math or science, engagement with challenges, application of knowledge to unfamiliar situations, and perseverance.
- The "economics of talent" aims to identify, nurture, and measure the economic impact of exceptional problem-solvers at an early stage.

### Evidence on when and where talent appears
- Half of the winners of the Fields Medal had previously competed in the International Mathematical Olympiad (IMO).
- "About 90 percent of young people live in developing economies."
- Example country and regional performance:
  - India: "finished fourth among more than 100 countries at last year’s IMO, a remarkable leap from 52nd in 2017."
  - Africa has produced only "three IMO gold medalists," compared with "86 for Romania."
- Barriers:
  - Standardized tests and rigid curricula can overlook unconventional thinkers.
  - Financial and geographic barriers limit access to top universities, mentorship, and global networks.
  - Sociological factors and parental background materially affect long-term outcomes.

### Mechanisms by which talent affects growth and innovation
- Individual impact examples: Ramanujan’s partnership with G. H. Hardy and downstream advances in cryptography, computer science, and understanding of black holes.
- Migration and brain circulation: staying connected to origin countries spreads knowledge and investment.
- Empirical findings:
  - IMO medalists from low-income countries are less likely to produce influential research.
  - Among high-scoring children (90th percentile or higher), those from top-20-percent income families produced more than twice as many patent holders as those from lower-income families.

### Quantitative findings and macro projections
- Global and sectoral estimates cited:
  - Scientific output could increase "by as much as 42 percent" if talented youth everywhere had equal opportunities (Agarwal, Ganguli, Gaule, and Smith 2023).
  - Gender parity in access to innovation careers could boost productivity growth by "70 percent" in the model by Jaravel, Einio, and Feng (2023), translating for advanced economies into an annual productivity growth increase of "2.0 to 3.4 percent."
  - Equal opportunities for all individuals in the top 1 percent of the skill distribution, regardless of family background, could increase GDP growth rates by "55 percent."
- Program reach: Global Talent Fund supports organizations "across more than 30 countries."

### Policy interventions, programs, and institutions
- Recommended mix: invest in broad public goods (education, health) and targeted programs that identify and support exceptionally talented youth.
- Targeted initiatives and examples:
  - Global Talent Fund and Backing Invisible Geniuses (BIG) scholarships, mentorship, and research opportunities for Olympiad medalists.
  - Support helped nations like Pakistan achieve their best-ever results at the Math Olympiad.
- Institutional roles:
  - Governments: fund specialized secondary programs, outreach to marginalized areas, adjust admissions to identify unconventional talent.
  - Universities/research institutes: partnerships with local schools, remote mentoring, targeted scholarships.
  - Businesses: labs in emerging regions, sponsor advanced camps or competitions, fund online platforms connecting young innovators with experts.
- Programmatic design questions:
  - Specialized high schools versus distance learning for promising students in low-resource areas.
  - Effectiveness of short intensive programs (e.g., six-week summer intensives).
  - How admissions and outreach can avoid reinforcing existing inequalities.

### Research gaps and evaluation needs
- Need systematic tracking and solid data (for example, follow cohorts of 13-year-olds from Olympiad camps) to assess long-term impacts of scholarships and mentorship.
- Open questions:
  - How to reliably identify hidden potential, including creative reasoning not captured by standardized tests?
  - Can AI tools analyzing student work improve detection without introducing biases that favor well-connected applicants?
  - Which non-technology fields benefit most from cultivating exceptional ability?
  - What are long-term returns of targeted interventions for career outcomes and societal contributions?
- Context sensitivity: interventions successful in tech-savvy cities may not translate to communities with few teachers and sporadic electricity.

### Innovation, gender parity, and the direction of innovation
- Empirical context: chart notes show "3.4 percent." and "Baseline represents 12 percent female inventors."
- Diversifying inventors can accelerate productivity growth and change innovation direction toward problems drawn from diverse experiences (examples: female entrepreneurs and "femtech").
- Distributional implication: innovators from high-income families tend to develop products aimed at high-income consumers, avoiding industries catering to basic needs.

### Policy prescriptions to expand inclusive innovation
- Evidence-based interventions:
  - Childhood proximity to inventors raises probability of becoming an inventor (Bell et al. 2019).
  - Randomized controlled trials: mentoring and female role models significantly influence girls’ STEM choices, especially high-achieving 12th-grade girls (Breda et al. 2023).
- Recommended policies:
  - Mentoring, role models, scholarships and immigration channels for top foreign students from developing economies.
  - Programs and funding to bridge gender and socioeconomic gaps in innovation.

### AI, labor markets, and human talent
- "About 40 percent of global employment, across a wide range of occupations, could be affected by AI."
- AI effects:
  - AI narrows performance gaps by improving output of less experienced and lower-performing workers (Brynjolfsson, Li, and Raymond 2023).
  - Risk of devaluing uniquely human excellence as distinctions between top-tier and average performance recede.
  - Trade-offs: AI can free humans from routine duties but overreliance risks reduced creativity and job satisfaction (example: consultants produced less original work; Toner-Rodgers study reported AI boosted output by 44 percent while 82 percent of scientists reported less job satisfaction).
- Complementary benefits: AI-powered individualized education tools (examples for deaf and hard-of-hearing children, reading and math coaches) and accelerated scientific discovery (AlphaFold2 scaled predicted protein structures from 200,000 to 200 million within months).

### Global talent, migration, and geography of innovation
- Mobility and patent geography:
  - "Some 5.4 percent of workers with a college education live outside their home countries, compared with 1.8 percent of high school graduates."
  - Inventors and Nobel Prize winners migrate at "twice and six times the college-educated-worker rate, respectively."
  - Six US tech centers tripled their share of patents from "11.3 percent during 1975–79 to 34.2 percent for 2015–19 (out of more than 300 metropolitan areas)."
- Policy guidance:
  - Align immigration pipeline (school visas, work visas, permanent residencies) to retain talent.
  - Invest locally in public goods since global talent complements local investment.
  - Reduce policy uncertainty and design flexible immigration systems (for example, automatic adjustments to visa caps indexed to data).
  - Allocate scarce migration slots to truly rare skills and consider distributing talent more broadly (for example, "heartland visas").

### Education, poverty reduction, and returns to schooling
- Global poverty and education contributions:
  - Share living below "$2.15 a day" fell from "44 percent in 1981 to 9 percent in 2022."
  - "Education accounts for fully half of total economic growth and two-thirds of real income gains among the world’s poorest 20 percent since 1980" (Gethin summary).
  - Specific metrics: education responsible for "60–70 percent" (and in another spot "up to 70 percent") of real income growth among the world’s poorest 20 percent since 1980.
- Schooling expansion:
  - Share with no schooling declined from "35 percent to 15 percent" (1980–2019).
  - Share with at least some secondary education grew from "25 percent to 60 percent."
- Returns to schooling (India example):
  - A year of primary education increases earnings by "2–3 percent."
  - A year of secondary education increases earnings by "6–8 percent" over primary.
  - A year of postsecondary education increases earnings by "more than 13 percent" over secondary.
- Policy implication: continue expanding access to secondary and postsecondary education; coordinate education policy with technological and innovation policy to capture complementarities.

### Vocational training and sectoral employment programs
- Role and evidence:
  - Vocational training can provide credible skill signals and be a viable alternative to university.
  - Ugandan trial: free six-month vocational training produced larger and more sustained income gains than a wage subsidy of "$50 a month for six-month on-the-job apprenticeships."
  - Pandemic follow-up: vocational trainees were more likely to lose jobs early in the pandemic but recovered and ultimately earned more than peers not offered training.
- Project QUEST (health care sector program):
  - Average annual earnings of program participants was "26 percent higher six years later" and "15 percent higher eleven years later" compared with non-participants.
- Program design guidance:
  - Target programs toward in-demand sectors and include credible, certifiable skills; integrate soft skills and employer connections.

### Costs, private financing, and private-sector expansion
- Cost per participant varies from a few hundred dollars to more than $10,000 per person trained.
- Low- and middle-income countries spend less than "0.2 percent of GDP" on vocational training—less than half what high-income countries spend.
- Recommendation: these programs will need to tap private financing.
- Private-sector expansion example: Pitman Training (now owned by LaunchLife International) operates in Nigeria, Zimbabwe, Kenya, and Ghana, offering office/secretarial skills to software and web development to meet growing demand.

### Australian student debt relief and loan indexation
- Australian Prime Minister Anthony Albanese announced a $A 16 billion (about US$10 billion) debt cut for 3 million Australian students.
- Indexation on education loans was capped after high inflation led to a "7.1 percent" payment increase.
- Total borrowers referenced: "4.9 million borrowers."

### Talent development case: Tabata Amaral
- Early trajectory:
  - At 11 she won her first medal in the Brazilian public school mathematical olympiad, leading to a weekend course and a small pocket money stipend.
  - She won more than 40 medals in math, chemistry, robotics, astronomy, and astrophysics olympiads, always as the only girl on the national team.
  - Received full scholarships to elite high school and to California Institute of Technology and to Columbia, Harvard, Princeton, Pennsylvania, and Yale universities.
- Policy focus: create mechanisms enabling other gifted students to rely on policy rather than fate to realize their talents.
- Political and program actions:
  - Secured funding for math olympiads (created in 2004), described as “a cheap and effective policy” that lowers truancy and increases college attendance when students win medals.
- Program example in practice:
  - Two-pronged funding for low-income secondary students: monthly pocket money stipend and a savings fund accessible only after high school graduation.
  - National program effective since March 2024 is already benefiting "over 3 million students."
- Research estimate: the overall cost of truancy to society is "3 percent of GDP."

### Tobacco use, public finance, and Bangladesh
- Tobacco prevalence and fiscal dependence:
  - "35.3 percent of people 15 years of age or older use tobacco products."
  - Between "9 and 11 percent" of all tax revenue comes from the tobacco industry (National Board of Revenue).
  - Tobacco kills "more than 160,000 Bangladeshis every year."
  - Study of "1,300 school-age children" found "95 percent" had nicotine in their saliva.
- Analysis and recommendation:
  - Taxes collected from tobacco products do not cover the costs of treating tobacco-related illness.
  - The government’s dependence on tobacco tax revenue creates a trade-off between public health and revenue needs.
  - Recommendation: rethink Bangladesh’s tobacco tax structure because "taxation is the most cost-effective way to discourage the use of tobacco products."

### Narratives, firm behavior, and macroeconomic consequences
- Measurement approach: natural-language-processing tools applied to US firms' conference calls and Form 10-K filings to quantify narratives (optimism/pessimism, excitement about AI, digital marketing adoption).
- Firm behavior:
  - Companies using optimistic language increase hiring pace by "2.6 percentage points more in a year" than comparable companies using pessimistic language.
  - Firms with optimistic narratives do not see higher future stock returns or profitability and tend to make overoptimistic forecasts.
- Macroeconomic estimates:
  - Narratives explain about "20 percent" of fluctuations in the US business cycle since 1995.
  - Narratives explain about "32 percent" of the early 2000s recession.
  - Narratives explain about "18 percent" of the Great Recession of 2008–09.
- Policy implications:
  1. Improve use of machine learning and data processing on public filings and earnings calls; value surveys that capture the "why" behind attitudes and decisions.
  2. Combine descriptive measurement of narratives with empirical analysis of their decision effects and spread.
  3. Study what makes policy-introduced narratives especially compelling.

### Morality, markets, and political economy
- Concept: morality functions as an enforcement mechanism that supports cooperation, production, exchange, and social cohesion.
- Findings:
  - Kinship structures and historical market exposure shape moral values (particularist versus universalist).
  - Ecology and need for neighbor cooperation influence moral orientation.
  - Universalist districts tend to vote more for Democratic candidates and elect representatives using universalist moral language.
- Recommendation: economists and moral psychologists should collaborate to inform policy design and anticipate political polarization; policymakers should frame redistributive policies to highlight local benefits for particularist audiences.

### Historical migration research: immigrant mobility and integration
- Key findings from Boustan and Abramitzky:
  - First-generation immigrants generally do no better economically than native-born peers; upward mobility is incremental and realized mainly by the second generation.
  - Immigrants today integrate as quickly as in the past (English acquisition, leaving enclaves, intermarriage).
  - Immigrants often occupy jobs not requiring English proficiency while native-born fill customer-facing roles; low-skilled immigrants can be complements to high-skilled workers.
- Policy implication: take a long view on immigration policy; there is less need to preselect immigrants by skills if immigrant success unfolds over time.
- Counterargument: selective immigration advocates (example cited: Reihan Salam) argue for more selective policies to enhance productivity and limit short-term fiscal/social frictions.

*Source: THE TALENT EQUATION, March 2025, Finance & Development.*

### 2023. Grocery stores emptied of essen-

### THE TALENT EQUATION

### Definition and scope
- Talent is defined as "the capacity to solve novel problems efficiently in a person’s late teenage years."
- Talent is shaped by both innate abilities and accumulated learning and manifests in how quickly people grasp math or science, engage with challenges, apply knowledge to unfamiliar situations, and persevere until solutions are reached.
- The emerging field called "the economics of talent" seeks to identify, nurture, and measure the economic impact of exceptional problem-solvers at an early stage.

### Evidence on when and where talent appears
- Talent frequently manifests in the teenage years or sooner: "Half of the winners of the Fields Medal had previously competed in the International Mathematical Olympiad (IMO)."
- About 90 percent of young people live in developing economies, yet people born in the United States, Europe, and Japan win the majority of Nobel science prizes (birthplace of Nobel laureates, 1901–2024).
- Example performance shifts:
  - India finished fourth among more than 100 countries at last year’s IMO, up from 52nd in 2017.
  - Africa has produced only three IMO gold medalists, compared with 86 for Romania.
- Barriers identified:
  - Standardized tests and rigid curricula can overlook unconventional thinkers.
  - Financial and geographic barriers limit access to top universities, mentorship, and global networks.
  - Sociological factors and parental background materially affect long-term outcomes (role models, aspirations, knowledge transmission).

### Mechanisms by which talent affects growth and innovation
- Historical examples illustrate individual impact: Ramanujan’s partnership with G. H. Hardy transformed mathematics and enabled later advances in cryptography, computer science, and understanding of black holes.
- Migration and "brain circulation" can benefit both sending and receiving countries; staying connected to origin countries spreads knowledge and investment.
- Research findings highlighted:
  - IMO medalists from low-income countries are less likely to produce influential research, suggesting limited institutional support and access to global networks.
  - Parental background matters for innovation: among high-scoring children (90th percentile or higher), those from top-20-percent income families produced more than twice as many patent holders as those from lower-income families.

### Policy interventions, programs, and institutions
- Targeted programs complement broad public goods (education, health); targeted support can be relatively low-cost while unlocking high returns from underused exceptional talent.
- Active initiatives and examples:
  - The Global Talent Fund was created to drive initiatives such as the Backing Invisible Geniuses (BIG) program, which provides scholarships, mentorship, and research opportunities to Olympiad medalists worldwide.
  - The Global Talent Fund supports organizations across more than 30 countries, helping nations like Pakistan achieve their best-ever results at the Math Olympiad.
- Recommended roles for institutions:
  - Governments: fund specialized secondary school programs, engage in outreach to marginalized areas, adjust admissions to spot unconventional brilliance.
  - Universities and research institutes: form partnerships with local schools, offer remote mentoring, and refine scholarships to target high-ability students with limited means.
  - Businesses: set up labs in emerging regions, sponsor advanced camps or competitions, or fund online platforms connecting young innovators with experts.
- Programmatic questions to guide policy design:
  - Are specialized high schools the best vehicle, or can distance learning serve promising students with limited local resources?
  - How helpful are short intensive programs (e.g., six-week summer intensives) for shaping career trajectories?
  - How can admissions and outreach be structured to avoid reinforcing existing inequalities?

### Research gaps and evaluation needs
- Need for systematic tracking and solid data: follow cohorts (e.g., 13-year-olds from Olympiad camps) to assess long-term impacts of scholarships and mentorship.
- Open research questions:
  - How to reliably identify hidden potential, including creative reasoning not captured by standardized tests?
  - Can emerging technologies (such as AI tools analyzing student work) improve detection without introducing biases that favor well-connected applicants?
  - Which fields beyond technology, science, and art benefit most from identifying and cultivating exceptional ability?
  - What are the long-term returns of targeted interventions in terms of career outcomes and societal contributions?
- Context sensitivity: interventions successful in tech-savvy cities may not translate to communities with few teachers and sporadic electricity.

### Quantitative findings and projections cited
- "About 90 percent of young people live in developing economies."
- "Half of the winners of the Fields Medal had previously competed in the International Mathematical Olympiad (IMO)."
- India’s IMO performance: "finished fourth among more than 100 countries at last year’s IMO, a remarkable leap from 52nd in 2017."
- Africa vs. Romania at IMO: "Africa has produced only three IMO gold medalists, compared with 86 for Romania."
- Global Talent Fund reach: supports organizations "across more than 30 countries."
- Potential macro gains cited (from related research reported in the section):
  - Scientific output could increase "by as much as 42 percent" if talented youth everywhere had equal opportunities (Agarwal, Ganguli, Gaule, and Smith 2023).
  - Gender parity in access to innovation careers could boost productivity growth by "70 percent" in the model by Jaravel, Einio, and Feng (2023), translating for advanced economies into an annual productivity growth increase of "2.0 to 3.4 percent."
  - Equal opportunities for all individuals in the top 1 percent of the skill distribution, regardless of family background, could increase GDP growth rates by "55 percent."

### Key policy recommendations
- Invest in both broad public goods (universal education and health care) and targeted programs that identify and support exceptionally talented youth.
- Create systematic tracking and evaluation frameworks to measure long-term impacts of scholarships, mentorship, summer programs, and specialized schools.
- Expand outreach to marginalized and remote areas to reduce geographic and socioeconomic barriers to talent discovery.
- Facilitate brain circulation through flexible migration and collaboration policies that allow talent to train abroad while maintaining connections to home countries.
- Encourage public–private partnerships and philanthropic support to scale promising interventions (e.g., regional olympiads, local training partnerships, online mentoring platforms).

*Source: THE TALENT EQUATION, March 2025, Finance & Development.*

### 3.4 percent.

### the-talent-equation-fd-mar25 - 3.4 percent.

### Innovation, gender parity, and productivity
- Empirical context: chart notes show "3.4 percent." and "Baseline represents 12 percent female inventors."
- Key analytical point: diversifying the pool of inventors can accelerate productivity growth by both increasing the pace of innovation and changing its direction—innovators often solve problems drawn from their own experiences.
- Examples cited:
  - Female entrepreneurs driving "femtech" innovations.
  - Historical and recent inventor anecdotes (Josephine Cochrane; Christopher Gray and the scholarship app Scholly).
- Distributional implication: innovators from high-income families tend to develop products aimed at high-income consumers and avoid industries catering to basic needs, contributing to purchasing power disparities across consumer groups.

### Direction of innovation and democratizing access
- Argument: widening access to innovation careers (gender, socioeconomic, geographic) can shift the focus of innovation toward underserved needs and reduce inequalities.
- Mechanisms:
  - Role-model effects and exposure to inventors in childhood increase the likelihood of becoming an inventor.
  - Expanding education and local access facilitates diffusion of existing technologies; a better-educated workforce is more capable of adopting new technologies.
  - Policy levers include mentoring programs, scholarships for top foreign students from developing economies, and lowering immigration barriers for talented individuals.

### Policy prescriptions to expand inclusive innovation
- Evidence-based interventions:
  - Bell et al. (2019): childhood proximity to inventors raises probability of becoming an inventor.
  - Randomized controlled trials: mentoring and female role models significantly influence girls’ STEM choices, especially high-achieving 12th-grade girls (Breda et al. 2023).
- Recommended policies:
  - Targeted initiatives to provide specific exposure to innovation careers (mentoring, role models).
  - Scholarships and immigration channels to democratize access for top foreign students from developing economies.
  - Programs and funding to bridge gender and socioeconomic gaps in innovation.

### AI, labor markets, and the role of human talent
- Magnitude: "About 40 percent of global employment, across a wide range of occupations, could be affected by AI."
- Task composition: estimate based on share of tasks AI can already perform (translation, summarizing information, coding).
- Labor-market effects:
  - AI handles complex cognitive tasks, narrowing performance gaps by improving output of less experienced and lower-performing workers (Brynjolfsson, Li, and Raymond 2023).
  - Potential devaluation of uniquely human excellence as distinctions between top-tier and average performance recede.
  - Trade-offs: AI can free humans from routine duties and enable focus on complex, creative tasks, but overreliance risks reduced creativity and job satisfaction (study where AI-using consultants produced less original work; Toner-Rodgers study where AI boosted output by 44 percent but 82 percent of scientists reported less job satisfaction).
- Complementary benefits:
  - AI-powered individualized education tools can expand access to high-quality learning (examples for deaf and hard-of-hearing children, reading and math coaches).
  - AI has accelerated scientific discovery (AlphaFold2 led predicted protein structures from 200,000 to 200 million within months; recognized by the 2024 Nobel Prize in Chemistry).

### Global talent, migration, and economic success
- Mobility facts:
  - "Some 5.4 percent of workers with a college education live outside their home countries, compared with 1.8 percent of high school graduates."
  - Inventors and Nobel Prize winners migrate at "twice and six times the college-educated-worker rate, respectively."
- Geography of innovation:
  - Six US tech centers tripled their share of patents from "11.3 percent during 1975–79 to 34.2 percent for 2015–19 (out of more than 300 metropolitan areas)."
- Policy guidance:
  - Align immigration pipeline (school visas, work visas, permanent residencies) to retain talent.
  - Invest locally in public goods (schools, infrastructure) since global talent complements local investment.
  - Reduce policy uncertainty and design flexible immigration systems (e.g., automatic adjustments to visa caps indexed to data).
  - Allocate scarce migration slots effectively, prioritizing truly rare skills rather than lotteries or first-come-first-served procedures.
  - Distribute talent more broadly (e.g., "heartland visas") to build political support while managing local bottlenecks (housing, schools).

### Education, poverty reduction, and skill complementarities
- Macro outcomes:
  - Global poverty: share living below "$2.15 a day" fell from "44 percent in 1981 to 9 percent in 2022."
  - Education’s contribution: "Education accounts for fully half of total economic growth and two-thirds of real income gains among the world’s poorest 20 percent since 1980" (Gethin summary).
  - Specific metrics: education responsible for "60–70 percent" (and in another spot "up to 70 percent") of real income growth among the world’s poorest 20 percent since 1980.
- Distributional and return-to-education findings:
  - Global schooling expansion: share with no schooling declined from "35 percent to 15 percent" (1980–2019); share with at least some secondary education grew from "25 percent to 60 percent."
  - Returns to schooling (India example):
    - A year of primary education increases earnings by "2–3 percent."
    - A year of secondary education increases earnings by "6–8 percent" over primary.
    - A year of postsecondary education increases earnings by "more than 13 percent" over secondary.
- Policy implications:
  - Continue expanding access to secondary and postsecondary education, not only basic education, because higher education yields large returns and positive spillovers for less-educated workers.
  - Education policy should be coordinated with technological and innovation policy to capture complementary gains.
  - Quantity of education (expanded access) has been central to global poverty reduction; focusing solely on quality risks missing large aggregate benefits.

### Vocational training and alternative skill pathways
- Economic role: vocational and skills training can provide credible skills signals to employers and serve as a viable alternative to university for many workers.
- Evidence and outcomes:
  - Case study: a Ugandan trial found free six-month vocational training produced larger and more sustained income gains than a wage subsidy of "$50 a month for six-month on-the-job apprenticeships."
  - Pandemic follow-up: vocational trainees were more likely to lose jobs early in the pandemic but recovered and ultimately earned more than peers not offered training—attributed to certifiable skills and sector-specific experience.
- Labor-market context:
  - Technical and vocational education and training in low- and middle-income countries often do not match labor-market needs; projected student increases: in Burundi, Mali, and Uganda secondary technical and vocational students expected to more than quadruple over the next two decades; in Niger the number is expected to rise tenfold.
- Program design guidance:
  - Carefully target vocational programs toward in-demand sectors and include features that produce credible, certifiable skills.
  - Recognize vocational training’s potential multiple benefits (employment, mobility across employers, resilience during shocks).

*Italicized source attribution: Content derived from the IMF Finance & Development, March 2025 issue, "The Economics of Talent."*

### 4.9 million borrowers.

### the-talent-equation-fd-mar25 - 4.9 million borrowers.

### Australian student debt relief and loan indexation
- Australian Prime Minister Anthony Albanese announced a $A 16 billion (about US$10 billion) debt cut for 3 million Australian students.
- Indexation on education loans was capped after high inflation saddled university graduates with a 7.1 percent payment increase.
- Total borrowers referenced: 4.9 million borrowers.

### Vocational training: accessibility, design, and promise
- Vocational training often has lower costs to participants and shorter time commitments compared with university studies, making these programs promising alternatives.
- Vocational training programs should be thoughtfully designed to maximize their potential and avoid negative impacts on workers as the landscape of jobs changes.
- Corsetto-Poon emphasizes the challenge for both universities and vocational training to keep up with changing labor-market dynamics and stay relevant.

### Sectoral employment programs and evidence of impact
- J-PAL and related research highlight promising sectoral employment programs that train job seekers—typically people with low incomes and those from nontraditional backgrounds—for high-quality employment in industries with strong local labor demand and career-advancement opportunities.
- Project QUEST (health care sector program) evaluation findings:
  - Average annual earnings of program participants was 26 percent higher six years later compared with those who did not participate.
  - Average annual earnings of program participants was 15 percent higher eleven years later compared with those who did not participate.
- Common successful features of sectoral employment programs:
  - Providing an industry-recognized certification.
  - Integrating soft skills training.
  - Providing strong connections to employers.

### Costs, public spending, and financing of vocational programs
- Cost per participant for vocational training programs can vary widely, ranging from a few hundred dollars to more than $10,000 per person trained.
- Low- and middle-income countries spend less than 0.2 percent of GDP on vocational training—less than half what high-income countries spend.
- The World Bank, International Labour Organization, and UNESCO report suggests these programs will need to tap private financing.

### Private-sector expansion and demand in Africa and Asia
- Economic growth in Africa and Asia is making expansion more attractive to educational franchisors such as Pitman’s (now owned by LaunchLife International).
- Pitman Training aims to build on a legacy of helping women enter the workforce and is already partnered in Nigeria, Zimbabwe, Kenya, and Ghana.
- Offerings range from office and secretarial skills to software and web development.
- Market drivers cited include a rapidly growing African middle class and an economy expanding faster than other parts of the world.

### Talent development and equal opportunity: the case of Tabata Amaral
- Tabata Amaral’s life story illustrates the role of early public education opportunities in broadening horizons and enabling talent from humble backgrounds to succeed.
- Early achievements:
  - At 11 she won her first medal in the Brazilian public school mathematical olympiad, which led to a supplementary weekend course and a small pocket money stipend.
  - She went on to win more than 40 medals in math, chemistry, robotics, astronomy, and astrophysics olympiads, in Brazil and abroad (always as the only girl on the national team).
  - She received a full scholarship to an elite high school and later won full scholarships to the California Institute of Technology and to Columbia, Harvard, Princeton, Pennsylvania, and Yale universities.
- Amaral’s policy focus: creating mechanisms that allow other gifted students to rely on policies rather than fate to realize their talents.

*Italic: Source PDF — the-talent-equation-fd-mar25 - 4.9 million borrowers.*

### part involves broadening their horizons and helping

### the-talent-equation-fd-mar25 - part involves broadening their horizons and helping

### Expanding educational opportunities and keeping youth in school
- Broadening horizons helps children "develop the capacity to dream" and exposes them to education, sports, and culture.
- Mayoral campaign education proposals included full-time schooling, public foreign language programs, and foreign exchange programs for young people.
- “It’s cheaper to send a kid abroad for six months than eventually having to maintain them in jail for the same amount of time later on,” presented as a factual comparison.
- Two-pronged funding for low-income secondary students established: a monthly pocket money stipend and a savings fund accessible only after high school graduation.
- Personal testimony: a small early salary at age 11 signaled to a family that studying could coexist with earning money, reducing dropout risk.

### Evidence base, costs, and program scale
- Research cited (Ricardo Paes de Barros) estimates the overall cost of truancy to society at 3 percent of GDP.
- National program effective since March 2024 is already benefiting over 3 million students.
- Next policy priority: expand the program to low-income college students to address compounded financial and social barriers (examples: lacking bus fare).

### Amaral’s personal trajectory and policy motivations
- Accepted to Harvard; initially chose astrophysics, then switched to political science after a comparative politics course in Latin America.
- Experienced a family tragedy (father committed suicide) shortly after acceptance; teachers encouraged continuation.
- Graduated magna cum laude with a thesis on the effectiveness of education reforms in Brazil, while working to support her family.
- Returned home in 2014 and founded an education advocacy organization.
- Political career milestones:
  - Ran for Congress in 2018 at age 25, received the sixth highest number of votes among the 70 lawmakers elected in São Paulo.
  - Reelected in 2022 with a third more votes than the first time.
  - Ran for mayor of São Paulo last year, finished fourth but almost doubled her votes from the previous election.
- Early policy actions in Congress: secured funding for math olympiads (created in 2004), which show evidence of lowering truancy and increasing college attendance when students win medals; described as “a cheap and effective policy.”

### Global relevance of empirical research from developing economies
- Empirical research in developing economies yields context-specific knowledge crucial for policy effectiveness (examples: informal saving groups, mobile money, provision of bicycles, menstrual hygiene facilities).
- Such research can test universality of economic principles and uncover new mechanisms less visible in developed economies.
- Contribution imbalance: authors based in developing economies account for only 7 percent of articles in the top 10 journals, despite collective weight in the world economy exceeding 60 percent (measured by global GDP share at purchasing power parity).
- Additional challenge: promoting research beyond academia requires sustained engagement with policymakers and the public, which competes with researchers’ limited time and resources.

### Women economists, representation, and initiatives
- Representation of women economists is lower than that of authors from developing economies; women face additional barriers (limited access to higher education and labor markets, balancing work and motherhood).
- Women economists often cover underexplored topics with direct effects on women’s lives and standards of living; many act as advocates and activists using economic reasoning.
- The International Economic Association’s Women in Leadership in Economics Initiative (IEA-WE), launched in 2023, aims to amplify women economists’ voices and help overcome barriers.
- The IEA-WE has supported research and facilitated publication on topics often overlooked (examples: societal impacts of sovereign debt on the elderly; effects of extreme heat on business delinquency).

### Profiles and policy-relevant findings from featured women economists
- Ipek Ilkkaracan — “Purple Gain”
  - Coined “purple economy” to emphasize gender equality and investment in social care infrastructure alongside environmental sustainability.
  - Research finding (Turkish context): public spending on early childhood care and preschool education can create three times more jobs than the same magnitude of public funds allocated to the construction sector.
  - Claim: shifting even half of the sixteen and a half billion hours of unpaid daily global care work into the paid sphere would generate hundreds of millions of new jobs.
- Rose Ngugi — “Getting an Edge from Data”
  - Built Kenya-centric sectoral indices used by 47 counties to gauge policy impact and focus attention on underperforming areas.
  - Emphasizes the informal sector’s centrality: the informal sector employs 80 percent of the population; micro and small enterprises are the bedrock for growth and job creation.
- Marcela Eslava — “Rethinking Social Protection”
  - Highlights Latin America’s problem of low income and high inequality; survival entrepreneurs account for half of Latin America’s workers.
  - Argues social protection must be risk-based rather than employment-based: “Health care should kick in when you get sick, not when you get sick and you’re formally employed.”
  - Calls for rethinking financing of social protection, including a “whole new vision on taxes and contributions.”
- Rumana Huque — (introductory excerpt)
  - Observes high tobacco use in Bangladesh and Southeast Asia; Global Adult Tobacco Surveys 2017 referenced.

*From Finance & Development (March 2025).*

### 35.3 percent of people 15 years of age or older use

### the-talent-equation-fd-mar25 - 35.3 percent of people 15 years of age or older use

### Tobacco use and public finance in Bangladesh
- "35.3 percent of people 15 years of age or older use tobacco products."
- The National Board of Revenue reports that between "9 and 11 percent" of all tax revenue comes from the tobacco industry.
- Tobacco kills "more than 160,000 Bangladeshis every year."
- A study of "1,300 school-age children" found that "95 percent" had nicotine in their saliva, indicating exposure to secondhand smoke.
- Analysis by Rumana Huque:
  - Taxes collected from tobacco products do not come close to covering the costs of treating tobacco-related illness.
  - The government's dependence on tobacco tax revenue creates a policy trade-off between public health objectives (Ministry of Health) and revenue needs (National Board of Revenue).
  - Recommendation: Rethink Bangladesh’s tobacco tax structure because "taxation is the most cost-effective way to discourage the use of tobacco products."
- Anecdotal evidence: Huque’s father quit smoking after health impacts became apparent, and no family members smoked thereafter.

### Narratives, firm behavior, and macroeconomic consequences
- Identification and measurement approach:
  - Use of large textual databases (US public firms' conference calls and Form 10-K filings) and natural-language-processing tools to translate managerial language into measurable narratives.
  - Narratives identified include general optimism/pessimism, excitement about artificial intelligence, and adoption of digital marketing techniques.
- Impact on firm behavior:
  - Companies with more optimistic narratives accelerate hiring and capital investment: "the pace of hiring at a company that uses optimistic language increases by 2.6 percentage points more in a year than a comparable company that uses pessimistic language."
  - Firms with optimistic narratives do not see higher future stock returns or profitability and tend to make overoptimistic forecasts to investors.
  - Narrative contagion: companies tend to adopt peers’ narratives; contagion often begins within industry peers and large companies exert especially large influence.
- Macroeconomic model and quantitative estimates:
  - Narratives are contagious and can amplify economic fluctuations; one-time shocks can have long-lasting effects through narrative spread.
  - Sufficiently contagious narratives that cross a virality threshold can induce "narrative hysteresis," producing stable self-fulfilling periods of optimism or pessimism.
  - Estimated contribution of narratives to US business-cycle fluctuations since 1995:
    - Narratives explain about "20 percent" of fluctuations in the US business cycle.
    - Narratives explain about "32 percent" of the early 2000s recession.
    - Narratives explain about "18 percent" of the Great Recession of 2008–09.
  - Granular narratives (for example, around new technologies) are more volatile and more likely to go viral than aggregate mood.
- Policy implications and research directions (three major conclusions):
  1. What people say is highly informative about individual attitudes and broader economic trends; improve use of machine learning and data processing on public filings and earnings calls, and value novel surveys that capture the "why" behind attitudes and decisions.
  2. Some narratives are more influential and contagious than others; combine descriptive measurement of narratives with empirical analysis of their decision effects and spread.
  3. Policy-introduced narratives can have significant impact; more research is needed on what makes a policy narrative especially compelling (example question: why Mario Draghi’s unscripted "whatever it takes" remarks resonated more than similar statements by other central banks).

### Morality, markets, and political economy
- Conceptual framing:
  - Morality is presented as an economically functional mechanism that enforces cooperation, supporting large-scale production, exchange, and social cohesion.
  - Economic environments influence moral values; moral values in turn shape political and economic outcomes.
- Historical and empirical findings:
  - Kinship structures and market exposure shape moral systems:
    - Societies with strong extended family networks tend toward particularist moral values.
    - Societies with greater historical exposure to markets exhibit higher levels of universalism.
  - Ecology can influence moral orientation: regions requiring intensive neighbor cooperation foster particularist values; fragmented or variable ecological conditions can foster universalist values.
- Political implications:
  - The universalist–particularist moral divide helps explain differences in attitudes toward taxation, redistribution, immigration, climate change, globalization, and foreign aid.
  - Universalist districts (measured by larger shares of donations to distant beneficiaries) tend to vote more for Democratic candidates and elect representatives who use universalist moral language and show more left-leaning roll-call voting behavior.
- Interdisciplinary recommendation:
  - Economists and moral psychologists can mutually benefit from collaboration: economists’ strengths in large-scale data and psychologists’ strengths in moral reasoning can combine to better inform policy design and anticipate political polarization.
  - Policymakers should recognize moral diversity when designing and framing policies; framing redistributive policies to highlight local benefits may increase acceptability to particularist individuals.

*Source: Finance & Development (March 2025) — content from the supplied PDF excerpt.*

### 1.5 million Russian Jews in the decades

### 1.5 million Russian Jews in the decades

### Background and intellectual partnership
- Boustan published a paper in 2007 about “1.5 million Russian Jews in the decades before World War I.”
- Abramitzky, an Israeli citizen, came to the US to pursue a PhD in economics at Northwestern University; his early work included studies of the kibbutz and why some members left communal property to enter market economies.
- Both were assistant professors (Boustan at the University of California, Los Angeles; Abramitzky at Stanford) and had won dissertation prizes: Boustan the 2006 Economic History Association prize for best dissertation in American history; Abramitzky the prize for best dissertation in non-US history.
- They met at a California-based economic historians conference and formed a close intellectual partnership characterized by shared thinking and mutual trust: “We have huge respect and trust in each other,” Abramitzky says.

### Research methods and data sources
- The collaboration produced the 2012 article “Europe’s Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration.”
- A priceless source of data was Ancestry.com; they developed computer algorithms to link census data across generations to study descendants’ outcomes.
- They used thousands of interviews from the Ellis Island Oral History Project and conducted their own surveys to bring quantitative findings to life.
- Abramitzky recounts that an Ancestry.com lawyer jokingly assumed they had “a big family over there in Palo Alto” before learning the site was used for academic research; after that, Ancestry.com “became real partners.”

### Key findings on immigrant mobility, integration, and labor-market effects
- Intergenerational mobility:
  - The first generation of immigrants generally does no better economically than native-born peers; the rags-to-riches myth is countered by evidence that upward mobility is incremental and realized primarily by the second generation, who close the earnings gap with native-born Americans.
- Integration speed and cultural assimilation:
  - Immigrants today integrate as quickly as in the past: they learn English just as quickly, are just as likely to leave immigrant residential enclaves, and are even more likely to intermarry across national or ethnic groups.
- Labor-market interactions between immigrants and native-born workers:
  - Immigrants often concentrate in jobs that do not require English-language proficiency (examples given: landscaping, construction) while native-born workers fill customer-facing roles.
  - Low-skilled workers may be complements rather than substitutes to high-skilled workers: illustrative example — in a restaurant, low-skilled workers could be dishwashers while high-skilled workers are waiters.
  - Immigrants can start businesses (a restaurant or medical practice), creating jobs for others, and often provide services (cooking, cleaning, childcare) that free up time for native-born Americans and increase their productivity.
- Debunked myths:
  - The research challenges the notion that today’s immigrants integrate more slowly than past immigrants.
  - It also challenges the idea that immigrant success necessarily comes at the expense of native-born Americans; while some direct competition exists (often among recent immigrants), most immigrants do not compete for the same jobs as native-born workers.

### Policy implications and debates
- Boustan and Abramitzky recommend taking a long view on immigration policy: if society accepts that immigrant success unfolds over time, there is no need to preselect immigrants based on skills or education (contrasting with policies in Australia and Canada).
- Counterarguments:
  - Reihan Salam (president of the Manhattan Institute and author of Melting Pot or Civil War? A Son of Immigrants Makes the Case Against Open Borders, published in 2018) contends that there is not necessarily “massive demand for low-skilled migration” and favors more selective immigration to enhance productivity and avoid short-term social frictions and fiscal costs (examples of fiscal costs cited: subsidized housing or health care for low-skilled immigrants).

### Careers, personal details, and next projects
- Abramitzky’s current role: senior associate dean of the social sciences at Stanford.
- Abramitzky’s wife, Noya, ran the local Hebrew school and is an educator.
- Boustan’s current role: director of the Industrial Relations Section at Princeton.
- Boustan is married to Ra’anan Boustan, a research scholar in the Program in Judaic Studies at Princeton.
- Both couples have three children.
- As administrative and family duties grew, they brought in more graduate students to help with research.
- Next project: immigration to Europe, noted as a vast undertaking involving “37 coauthors.”

*Source: the-talent-equation-fd-mar25 - 1.5 million Russian Jews in the decades*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/03/the-talent-equation-fd-mar25.pdf_