Bob Willis Honored with the 2015 Jacob Mincer Award for Lifetime Contributions to the Field of Labor Economics

My University of Michigan colleague and coauthor was given the Society of Labor Economist’s lifetime achievement award at the joint meeting of the Society for Labor Economics and the European Association of Labour Economists in Montreal (Fourth SOLE|EALE World Meetings, June 26-28, 2015). Let me copy from the note I received about this: 

“SOLE’s Lifetime Achievement Award was first awarded in 2004 to Gary Becker and Jacob Mincer and was henceforth named the Jacob Mincer Award.  Subsequent winners are: Orley Ashenfelter, Richard Freeman, Dale Mortensen, Reuben Gronau, Claudia Goldin, Ronald Ehrenberg and Daniel Hammermesh.  I am honored to be included in such distinguished company that includes three Nobel Prize winners (Becker, Heckman and Mortensen), three Presidents of the American Economic Association (Becker, Ashenfelter and Goldin) and a Chair of the President’s Council of Economic Advisors (Lazear).

Here is the full citation:

Robert J. Willis is Professor of Economics at the University of Michigan and Research Professor at the Institute for Social Research and the Population Studies Center, University of Michigan.  He is a Fellow and past President of the Society of Labor Economics, and is this year’s recipient of the Jacob Mincer Prize, the Society’s Career Achievement Award for lifetime contributions to the field of labor economics.

In the 1970s, Willis was one of the young labor economists who ushered in the modern era of the field with work that combined rigorous modeling and econometric sophistication and that emphasized the tight links between theory and empirical analysis that characterize labor economics.  Following his path-breaking work on the economic modelling of fertility, Willis published a number of innovative papers, including collaborations with Jim Heckman, Lee Lillard, and Sherwin Rosen, on the econometrics of longitudinal labor supply models and the treatment of self-selection in estimating the returns to education.  His many contributions to family economics, several coauthored with Yoram Weiss, include work on surprises as determinants of divorce, the inefficiency of child support payments, and an economic model of non-marital childbearing.  Working with multidisciplinary teams of researchers, Willis has examined intergenerational ties in Asian countries, including the effect of credit constraints on child investments and exchange motives for intergenerational transfers.  His work is well-known among demographers, and in 2002 he received the prestigious Mindel C. Sheps Award for outstanding contributions to mathematical demography and demographic methodology from the Population Association of America.

Willis’ contributions to labor economics include his long service (1995-2007) as Director of the Health and Retirement Study (HRS), a pivotal piece of social science infrastructure that has provided data on aging Americans and their employment, assets, health and family ties for three decades.  Under his leadership, the HRS has introduced many new survey instruments, including measures of cognitive functioning and dementia.  His latest work studies the extent of cognitive declines with aging and their implications for issues such as retirement planning, earnings, and the caregiving needs of the elderly.  This research continues the commitment to innovation, rigorous measurement, and conceptual clarity that characterizes Robert Willis’ long career in labor economics.”

John Stuart Mill on Public and Private Actions

I am always intrigued when I see John Stuart Mill arguing for less freedom than I expect. While expansive in the degree of freedom he argues for behind closed doors, In paragraph 7 of On Liberty “Chapter V: Applications,” paragraph 7, he argues for much tighter limitations on what can be done in public:

Again, there are many acts which, being directly injurious only to the agents themselves, ought not to be legally interdicted, but which, if done publicly, are a violation of good manners, and coming thus within the category of offences against others, may rightfully be prohibited. Of this kind are offences against decency; on which it is unnecessary to dwell, the rather as they are only connected indirectly with our subject, the objection to publicity being equally strong in the case of many actions not in themselves condemnable, nor supposed to be so.

I find this troubling when one considers that many actions for which it is contested whether they are injurious or not. And doing something in public as performance art can be a form a free speech. 

On the other hand, I don’t see how to make society work without some significant limitations on what one can do in public that go beyond any limitations on what one can do in private. 

I am actually quite puzzled about how to draw the line in a principled way between things that should be allowed both in public and private and those that should be allowed only in private. And it occurs to me that any serious classroom discussion of On Liberty should wrestle with this question.

“The nature of injustice is that we may not always see it in our own times.”

Anthony Kennedy, joined by Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan, in Obergefell et al. v. Hodges, the June 26, 2015 Supreme Court decision making gay marriage legal throughout the United States (p. 11).

Related reading:

The Case for Gay Marriage is Made in the Freedom of Religion

“The Hunger Games” Is Hardly Our Future—It’s Already Here

Bruce Greenwald: The Death of Manufacturing & the Global Deflation

This is a fascinating discussion by Bruce Greenwald of

  1. the difficulties of shifting people from working in sectors like agriculture and manufacturing where employment is declining because productivity is going up faster than demand,

  2. the efforts of some countries to export this problem to other countries, and

  3. the effect of these forces on interest rates, and therefore, implicitly, their interaction with the zero lower bound.

It is very interesting to think about how these issues could play out if there had been no zero lower bound and their had been aggressive negative interest rate policy. Regardless of the low interest rates, it still doesn’t work to have more manufacturing output that people want to buy any more than it makes sense to have more food grown than people can possibly eat. So at the end of the day, manufacturing capacity would get high enough to put a brake on further investment in manufacturing despite very low interest rates. Either people will start consuming a lot more because of the low interest rates, or more likely there would end up being extra investment in something else. A good possibility is education. Education is a form of investment that can easily absorb a huge amount of resources simply in student time, even if in the future it doesn’t need much in the way of buildings or professors because it has gone electronic. Standard human capital theory suggests that a low enough long-run real interest rate can have a big effect on the amount of education chosen.

Smoking Out the Essence of Minimum Wage Effects

I want to try to smoke out what is problematic about the minimum wage. A minimum wage is saying a firm that wants to make a job offer and a worker who wants to accept that offer are not allowed to make a deal.

1. To clarify things, an interesting variant of a minimum wage policy that would avoid this would be to say that the minimum wage applies only to existing jobs, not to new hires. This limits the minimum wage increase to the already existing employment relationships that I think are the foundation of people’s intuition that the minimum wage is a good thing.

2. Going a little further, to avoid distortion, it might be necessary to allow a firm and a worker to agree to a contract that opts out of any possible higher minimum wage in the future. 

To make this policy more realistic, almost all distortion can probably be avoided even if there is a time limit of a year or two from the moment of hiring on how long a contract can opt out of the minimum wage.

3. Going the other direction, it is interesting to consider a minimum wage that applied only to new hires and not to existing employment relationships. I think few people would be in favor of such a minimum wage. It is interesting to consider why. 

Summing Up: Maybe there is a better way to lay things out: the objective is to separate out analytically the effect of the minimum wage on new hires from the effect of the minimum wage on existing workers.

Note: One can argue that telling someone shehe may not take a job a firm wants to give herhim will benefit other workers who do get jobs, but if that is the argument for a minimum wage, I would like to see it stated that baldly: “You must sacrifice and not take that job so that other workers can be paid more.”

Clay Christensen: Religion as a Foundation of Democracy

This is a nice video of Clay talking about the benefits of religion. An atheist group complained about it. But they don’t understand:

“… an unintended effect is a real effect, which may be welcomed without prejudice to intended effects. … facing such an unintended effect and sensing the presence of an intrusive subjectivity, modernist historical criticism, like virtually all modernist criticism, catches itself in time, and muffles its inclination to join in the discussion as one might muffle one’s inclination to join in a laugh at a funeral. The critic may find the joke funny, but to laugh at it would interrupt the ceremony—or, in this instance, retard the collective enterprise. Postmodern criticism—going nowhere, we might say—feels no such inhibition. More important, it has time to linger over distractions and chance arrangements that, like a sunset, are intended by nobody, but may lift the spirits of anybody willing to be led outdoors for a look.”

– Jack Miles, in Christ: A Crisis in the Life of God, pp. 331-332.

Bring Turkey into the European Union

The day before the Turkish election on June 7, I posted a link to the Economist’s editorial “Why Turks Should Vote Kurd: It Is the Best Way of Stopping Their Country’s Drift Towards Autocracy,” with the note

True democracy can be lost. Turks need to protect theirs.

So it was good news indeed when Turks voted resoundingly to stop Recep Tayyip Erdogan’s hopes to create a powerful presidency for himself. 

I find myself again in full agreement with the Economist in its June 13th editorial “Sultan at Bay,” in which the editorial staff wrote:

The European Union, too, should do more. It was partly because Turkey’s membership talks, begun in 2005, seemed to go nowhere that Mr Erdogan drifted towards autocracy. Now that Turks have so thrillingly demonstrated their democratic credentials, the EU should revive the negotiations. There is also new hope that the age-old Cyprus problem might be solved (see article). Turkey matters hugely for the future of Europe. Resurrecting its aspirations for EU membership would be a fine reward for its admirable voters.

As I preached in my sermon the day of the Turkish election, “The Message of Jesus for Non-Supernaturalists,” including others in things that are working relatively well is one of the most powerful ways of making the world a better place. The European Union is far from perfect, but in a global context it counts as something that is working relatively well.   

Extending the blessings of the European Union into the Middle East seems especially valuable in trying to foster stability in this volatile area of the world. It is a bit optimistic, but it is not too much to hope that from now on, electoral competition in Turkey will make the Turkish government more pro-Kurd, which could be especially valuable in shifting the balance in the Middle East in a favorable direction.