Which professions are paid too much given their value to society?

Many jobs have spillover effects on the rest of society. For instance, the value of new treatments discovered by biomedical researchers is far greater than what they or their employers get paid, so they have positive spillovers. Other jobs have negative spillovers, such as those that generate pollution.

A forthcoming paper, by economists at UPenn and Yale, reports a survey of the economic literature on these spillover benefits for the 11 highest-earning professions.

There’s very little literature, so all these estimates are very, very uncertain, and should be not be taken literally. But it’s interesting reading – it represents a survey of what economists think they know about this topic, and it’s surprisingly little.

Here are the bottom lines – see more detail on the estimates below. (Note that we already discussed an older version of this paper, but the estimates have been updated since then.)

We calculated mean income for 2005 in an earlier article. We increased income by 30% to account for nominal wage growth since then.

The paper uses the expressions spillover and ‘externality’. An ‘externality’ is a technical term for a ‘cost or benefit that affects a party who did not choose to incur that cost or benefit.’ The authors of the paper call it an ‘externality’ when someone who buys a service does (or does not) benefit after taking account of the cost of purchasing it. This is a nonstandard usage,

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Maria Gutierrez on doing good through art, Costa Rica and why 80,000 Hours changed her career

This week I interviewed Maria Gutierrez to learn more about how 80,000 Hours had changed her career plans. For the last year Maria has been our freelance graphic designer, producing most of the artwork on our site today.

I sped up the recording so it is quick to listen to:

Summary of the interview

  • In 2014 Maria had a general desire to improve the world, but no idea how to put that into practice. She didn’t see any way to do useful work while using her creative skills and was frustrated by this.
  • She stumbled onto 80,000 Hours and effective altruism while browsing the internet, and its ‘honesty’ immediately resonated with her. It provided a much more concrete way to assess what would actually be useful to do than she previously had. It was the first time she had considered ‘earning to give’ as a way to do good.
  • She realised that she could do a lot of good by using her artistic skills to contribute to any organisation that does exceptional work. She decided to make her first contribution by working for us.
  • Maria decided to move back to Costa Rica to dramatically lower her cost of living, and thereby be able to donate more. This is possible because all the work she does is online for groups in the US and UK. She recommends other people think about doing the same thing, and we suggest some careers that are particularly promising for remote work.
  • We discuss how the 80,000 Hours framework can be applied to others in the creative arts, and challenge the view that such skills are not valuable.
  • Long term, Maria is weighing up earning to give as a fine artist, against doing ‘direct work’ as a designer for non-profits or for-profits that she thinks are having a large social impact.
  • This raises tricky issues about personal fit, and which sacrifice she is willing to make and which she isn’t. Maria doesn’t think she could be happy without being challenged artistically. She also thinks she would burn out doing pure marketing.
  • Finally, we discuss RISE (Red de Impacto Sustenible y Effectivo), en effective altruism inspired organistion for Costa Rica, which she intends to launch with a friend. Maria explains why she doesn’t want to take donations away from charities that work in countries poorer than Costa Rica.

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Will effective altruism destroy the arts? No.

158300A recent article on the Washington Post expressed concern that the growth of effective altruism could seriously reduce funding for the arts. It even mentions that the Bonfils-Stanton Foundation recently decided to focus 100% on funding the arts and culture, in part because “philanthropy, directly or indirectly influenced by the effective altruist approach, is increasingly focused on problems perceived as more pressing”.

This was astonishing to me.

Here’s why effective altruism is not going to destroy the arts.

1) Only a couple of percent of American philanthropy is influenced by effective altruism, and it’s not taking funding from the arts.

Explicitly “effective altruist” giving is well under $100m per year, only 0.03% of the total Americans give to charity each year.

If we look more broadly to giving that has an effective altruist style, even if it doesn’t explicitly use the label, the Gates Foundation is the largest proponent. But the Gates Foundation spends about $4bn per year, only 1% of the total Americans give to charity each year.

It seems hard to claim that more than a couple of percent of American philanthropy is even remotely influenced by effective altruism. One study found that only 3% of American donors give based on the relative performance of the nonprofits they donate to. Only 4% of total American giving even goes to international causes,

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