Lawrence Today

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Lawrence Today Links

The new Lawrence Today showed up in my mailbox today, and as promised I have provided another few hundred words on the dynamics of the college wage premium.  You can click here to read my post on what exactly “composition-adjusted log real wages” means, along with a discussion about the trajectory of U.S. wages over the past 50 years.

For those of you interested in learning more about Michael Lewis’s Moneyball, my short review is here via the Economics Department Newsletter (if you are interested in getting on the distribution list for the newsletter, let one of us know). Here on Briggs 2nd and across campus we’ve talked quite a bit about Moneyball. For a taste, here are some discussions about how Moneyball might apply to higher ed, whether Major League Baseball is competitive, and why we should perhaps require kindergarten transcripts.

If you are looking for something that might pique your interest in economics, here are some suggestions:  First, one of our all-time most popular topics for classroom discussion is the problem of moral hazard.  I would also recommend the posts on the dynamics and continuing evolution of the publishing industry (who knew that an Oprah recommendation actually decreases overall book sales?).  Finally, if you are looking for something meatier, check out our (well, my) book recommendations.

Thanks for stopping by.

The College Wage Premium — the VORP addendum

Welcome to those of you who found the site via the Lawrence Today piece on the value (over replacement) of the liberal education.  As promised, this post explains what is going on Figure 3.5 from Erik Brynjolfsson and Andrew McAfee’s Atlantic Monthly piece, “Why Workers are Losing the War Against Machines.”  This is a really nice discussion that touches on the future of labor markets for skilled and unskilled workers, and I will use Brynjolfsson and McAfee’s e-book in my intro class during winter term.

The original source is Figure 4a of Daron Acemoglu and David Autor’s “Skills, Tasks and Technologies: Implications for Employment and Earnings,” a working paper from the National Bureau of Economic Research (NBER) that will find a home in the Handbook of Labor Economics  (the authors’ PowerPoint presentation can be found here).

At one level, the story is transparent. You can see over time that the wage premium for people with college degrees and graduate degrees have grown substantially, while high school graduates and dropouts actually seem to be losing ground since the early 1970s.  That is the basic message.

The purpose of this post is simply to unpack the elements of this particular characterization of “changes in wages” to give an idea of how some truly great economists have addressed the problem.  I hope that you will see why this characterization is likely to be more compelling than the plotting of raw data that we often spattered about these days.

Continue reading The College Wage Premium — the VORP addendum