This is the Cato Daily Podcast for Monday, November 19, 2012.

I'm Caleb Brown. Economic expansion in recent years has meant growing income inequality,

according to Brink Lindsay, author of the new e-book Human Capitalism.

But it isn't inevitable that the skills necessary to thrive in this new world will be shared

as unequally as they are. Brink-Lins Lindsay is a senior fellow at the Cato Institute.

We spoke about his book last week.

So the basic gist here is to explore the connection between economic development and cognitive

development and the dynamic works like this. The richer and more advanced

our economy becomes, the more complex our world becomes.

And therefore, the more participating in this complex world imposes heavy mental demands on us,

which we have responded to over the course of the last

hundred years or so by investing in human capital, by developing all kinds of

skills and specifically mental capabilities that people didn't need before and

consequently didn't develop before.

You make a note that despite this big increase in the college wage premium,

that is the value of a college degree relative to not having one, that the growth of young

people getting college degrees that has slowed considerably and so you ask the question why

aren't people responding to the economic incentives and your conclusion is

that the problem is cultural yeah it's so it's a puzzle. Back in 1980, the average college grad made about 30% more than the average high school

grad. Over the course of the 80s, that college premium went up to about 70% so more than doubled and has stayed

high ever since. Why is basic supply and demand the demand for highly skilled

workers keeps going up over time as our economy gets more

...