Johan Fourie's blog

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Posts Tagged ‘genetics

How our emotional intelligence makes us productive

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Emotional-Intelligence-1

Economists spend a lot of time investigating the factors that make people more productive. This is because more productive people – producing more, with less – is the reason we can today afford a much higher standard of living than our ancestors – in Africa, India or Europe – two centuries ago.

Many things improve our productivity. Technological improvements like a computer can allow us to use the power of machines to substitute manual labour. Education allow us to build faster and stronger computers. Both technology and education are key if we are to continue building and sharing a prosperous future.

But it is not only technology and education that improve our living standards. There are formal and informal institutions – things like the criminal-justice system, property right regimes and the political system – that create the incentives for us to invest in technology and education. And there are the even less tangible things, like the way we make decisions (often referred to as ‘culture’), or our personalities. Economists are only now beginning to explore the roots of these ‘soft’ determinants.

Psychologists have known for long that our personality affect the way we make decisions. One example: Whether we apply for that senior position may depend on whether we exhibit the leadership qualities that is required to lead a large team. But what determines whether we have those leadership abilities? Is it nature or nurture?

One option is to look at siblings. If genetic traits (nature) were the only source of leadership qualities, then almost all the variation we find in society would be between families. In other words, there should be little variation between brothers, for example, as they have a lot of genetic overlap.

This is not the case, however, at least according to a recent NBER Working Paper written by three economists, Sandra Black, Björn Öckert and Erik Gröngqvist. Almost a third of total variation in personality traits, they note, are within the family. So, if it is not only nature that determine much of your personality, where do these within-family differences come from?

One possibility, they argue, is birth-order. Using a very rich Swedish dataset, the authors find that first-born children are ‘advantaged’ when measured on their ‘emotional stability, persistence, social outgoingness, willingness to assume responsibility and ability to take initiative’. Note: these are non-cognitive abilities, i.e. there is little difference in terms of a first-born and a third-born’s innate ability to do math, for example. It is on the softer abilities, instead, that first-borns clearly outperform their lower-ranked siblings: third-born children, for example, have non-cognitive abilities that are 0.2 standard deviations below first-born children.

These non-cognitive abilities matter. Controlling for many things, they show that first-born children are almost 30% more likely to be Top Managers compared to third-borns. This is because managerial positions, they argue, tend to require all Big Five domains of personality: openness to experience, conscientiousness, extraversion, agreeableness, and emotional stability.

But why does birth-order matter? The authors argue for largely three possible reasons. First, biology. Successive children may have less of the stereotypical male behavioural traits due to the mother’s immunization to the H-Y antigen. But this seems unlikely to explain most of the variation, as the authors also find that birth order patterns vary depending on the sex composition of the older children: third-born sons perform worse on non-cognitive tests when their older siblings are male compared to when they are female.

This suggests that it has something to do with how parents allocate their time and resources, especially in the early years. ‘First-born children have the full attention of parents, but as families grow the family environment is diluted and parental resources become scarcer’, the authors argue. Parents may also have incentives for more strict parenting practices towards the first born to ensure a reputation for “toughness” necessary to induce effort among later born children.

Thirdly, children may also act strategically in competing for parental resources. Siblings compete for possession of property and access to the mother. Older siblings, research shows, tend to take a more dominant role in conflict and have more elaborate conflict strategies. To minimise conflict, parents tend to invest more in the dominant, older sibling.

Using a novel approach, the authors can identify which of these effects is largest. They find that biological factors only explain a small part, and may actually benefit later-born children. It is however in the behaviour of parents that there are distinct differences between first- and later-born children: they find that later-born children spend substantially less time on homework and more time watching TV. Parents are also less likely to discuss school work with later-born children, suggesting that it is the parents that lower their investment which explains the large gap in non-cognitive skills.

What the authors do not do is to link their results with the general improvement in living standards over the last two centuries. We are becoming ‘better angels of our nature’ because we grow up in smaller families with more parental attention and resources, improving our non-cognitive abilities.

It is not only the vast improvement in technology and education that has made us more productive, but also because we have become more conscientious, agreeable, responsible and willing to take the initiative. We are rich, in part, because we are more emotionally intelligent.

*An edited version of this first appeared in Finweek magazine of 1 June 2017.

Written by Johan Fourie

June 23, 2017 at 07:49

The vanquished people

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WE ARE THE EVIDENCE: Names of groups that have disappeared in the US (National Museum of the American Indian; photo by Johan Fourie)

WE ARE THE EVIDENCE: Names of groups that have disappeared in the US (National Museum of the American Indian; photo by Johan Fourie)

It is often said that history is written by the victors. (The quote is attributed to Churchill but its origin is unknown.) But perhaps it is better to think of it another way: History is written by the survivors. Or, more accurately, the descendants of survivors.

This is because even our recent past includes frightening numbers of vanished peoples; groups of indigenous people that have disappeared and are now retired to the footnotes of history. In September last year, Helanya, Dieter, Wimpie and I visited the National Museum of the American Indian in Washington DC, a museum dedicated to the indigenous peoples that lived across the North American continent when Europeans arrived in the fifteenth century. Over the following four centuries, European guns and especially European diseases killed millions of these peoples; I found the image of the names of the vanished tribes, shown above, bone-chilling.

Of course, the American experience is not dissimilar to our own. The Khoesan, consisting of the nomadic, pastoral Khoe and hunter-gatherer San, inhabited most of the Western Cape, Northern Cape and parts of the Eastern Cape when Europeans arrived in the mid-seventeenth century. (Read this for more on the origin of the Khoesan.) Two centuries later, the descendants of the Khoesan and imported slaves were an underclass, living mostly on farms as labourers and subjected to harsh work and living conditions. Several smallpox episodes, notably in 1713 and 1755, had killed a large proportion of the population and those that would not work on settler farms were forced to move deeper into the drier interior, settling in areas with little economic potential. Their economic and social way of life soon disappeared; names such as the Attaqua, Chainouqua, Cochoqua, Damaqua, Gonaqua, Gorachouqua, Namaqua, Hessequa, Hoengeiqua, Outenique and Sonqua all but vanished.

What we know about these groups we must learn from the records of the victors; the journals of European travellers, letters by settler farmers, reports by Company officials. Even here, there are large gaps. We don’t know, for example, how many Khoesan worked on settler farms, and exactly what they did. Because the Khoesan could not be enslaved, mention of them is also missing from tax censuses or probate inventories, records that kept meticulous account of the number of slaves (imported from south-east Asia) working on farms. So when calculating things like Cape per capita production, or levels of inequality, or slave productivity, what historians (myself included) simply did was to ignore the Khoesan: somewhere in a footnote we would note the existence of a group of people we cannot count because we have no quantitative information about their size and whereabouts. All our earlier estimates of the Cape economy had the caveat of the missing people.

So Erik Green of Lund University and I decided to do something about this. We use the qualitative information available from traveller accounts, settler journals and letter, and Company reports to reconstruct the size of the Khoesan population. Making several assumptions based on anecdotal evidence (anecdata?) and using the eighteenth century tax censuses, we calculate an annual estimate of the Khoesan population. We then use these new estimates to adjust earlier estimates of slave productivity, societal inequality, and GDP growth. It turns out that earlier estimates for slave productivity was much too large, between-group inequality much too low, and GDP per capita too high. The paper is now available as an ERSA working paper.

South Africans have mostly surrendered the history of these peoples to the dominant narrative of colonisation and liberation history (first, white, now black). There are attempts under way to address this: the Department of Traditional Affairs has, for example, decided to include the descendants of Khoesan in the National Traditional Affairs Bill. Yet, given that the Coloured population in the Western Cape are now genetically between 32 and 43% Khoesan (see a recent study by De Wit et al. in Human Genetics), it is not obvious who would qualify as ‘descendants’, and what their interests are. With land claims before 1913 now a possibility, expect more enthusiasm for any evidence that ties current descendants to ancestral lands.

To be able to claim land, I suspect, the location of the ‘original’ Khoesan inhabitants must first be established and, secondly, the modern-day descendants (and claimants) must be linked to those original inhabitants. This is, in truth, an almost impossible exercise in the absence of detailed records for the early Cape Khoesan. And, to be sure, given the high levels of mortality, it is highly likely that most of the Khoesan in the south-west Cape would have left few, if any, descendants.

Again, it seems, history will be written, if not by the victors, then certainly by the survivors.

Written by Johan Fourie

March 19, 2014 at 09:34