So I’m a bit late to the party in commenting on this post from Julian Sanchez. He talks about a group of people called “satisficers” who are only motivated to keep earning money up to a certain threshold, after which any marginal increase in income will not lead to increased motivation. Tax policy should take into account the psychologies of this group, he says:
For folks like this, the conventional prediction about the effects of taxation may be quite reversed: Since they are highly motivated to achieve some relatively fixed acceptable income level (assuming the cost of sustaining their lifestyle remains constant), but their interest in money past that point drops off sharply, raising taxes may actually cause them to increase effort or productivity in order to keep hitting the same target they achieved with less work at the lower rate. Something similar might happen in a double-income household (assuming two satisficers with comparable thresholds): If they can make it on one income, they prefer that one partner stays home with the kids, or takes time out of the workforce pursuing a dream of starting a business or launching a new career or, hey, going on American Idol… even if they’d be substantially wealthier with two incomes.
He makes a good point, and it made me think of an analogy to college admissions. In this case, the workers parallel with students and income scale parallels with college ranking. Now this may not be a perfect analogy, but it leads to some interesting observations. We could see affirmative action as a type of tax instituted by colleges on a high-achieving race or demographic. In classical terms, i.e. goal is to maximize college admission, this “tax” should decrease motivation for top students to work hard, and we should see an overall decrease in achievement at the top of our student ranks. Looking at the admitted students into top colleges though, we see that these classes are populated by a huge swath of 2400 SAT’s, leadership positions, and extracurricular awards. So it seems that the “tax” of affirmative action has little negative effect on student’s achievement.
However, if we see these top students as satisficers who have a very high minimum expectation, the current outcome makes a lot of sense. Through affirmative action, “taxes” increase on a certain group, which now will be even more motivated so that they can achieve the same level of “income,” which is in this case a college admission. So affirmative action is increasing the effort that students put into getting into college, which runs counter to what one would expect regarding motivations and incentives. I think because so much weight is given to college in today’s society, that students will go to great lengths to make themselves desirable to the colleges they like. The same idea of satisficers instead of maximizers applies to average students as well. The average high school student might see getting into the state university as enough of an expectation and have no motivation to study any harder. If that is so, and average high school students see state university as their minimum expectation, then could we motivate students to work harder by making laws that raise university standards? Such a law would have to assume that most students think as satisficers. It would make sense with the culture of “getting by with the minimum” throughout one’s teen years.
Note that I only considered the effects of affirmative action on student achievements, but that may not exactly parallel with other aspects of teen life, such as emotional and physical health. It’s very possible that teens are more stressed from having to work harder to reach their minimum expectation. They can definitely suffer from things such as getting less sleep or spending less time with friends. Obviously, it is not a perfect parallel with what Julian describes, but I think the analogy is an interesting view of student motivations.