A special supplement to the most recent issue of the Journal of Political Economy (JPE) (October 2018) commemorates the life and work of the late Nobel laureate Gary S. Becker. The issue contains contributions from economists such as fellow Nobel laureate and JPE editor James J. Heckman, as well as Richard Blundell, Edward P. Lazear, Pierre-Andre Chiappori, Monica Costa Dias, James Liang, John Eric Humphries, and Gregory Veramendi. The articles in this issue extend, explore, and honor Becker's influential research and scholarship.
Heckman, the Henry Schultz Distinguished Service Professor and director of the Center for the Economics of Human Development at the University of Chicago, edits and introduces the issue with Edward P. Lazear and Kevin M. Murphy. In their opening remarks, the scholars laud Becker's considerable and lasting contributions to behavioral economics, discussing Becker's view of social institutions such as marriage, child rearing, discrimination, and crime, and addressing Becker's theory of human capital, which provides the backbone for labor economics and bolsters economic theory, policy, and discourse in education and health. They write, "Gary Becker was an intellectual giant. No one had a greater impact on broadening economics and making its impact felt throughout the social sciences than Becker. Indeed, Milton Friedman once described Gary Becker as the most important social scientist of the second half of the twentieth century."
The issue begins with a posthumous contribution from Becker himself. In "A Theory of Intergenerational Mobility," Gary Becker, Scott Duke Kominers, Kevin M. Murphy, and Jörg L. Spenkuch extend classic theories of intergenerational mobility by studying its link with the market and inequality. Wealthy parents invest, on average, more in their children than poorer ones, which results in the persistence of economic status across generations, regardless of a child's innate ability. The authors conclude that "even modern societies may develop social classes with considerable mobility within but not across class boundaries."
In "The Marriage Market, Labor Supply, and Education Choice," Pierre-Andre Chiappori, Monica Costa Dias, and Costas Meghir assess "the intersection of two fundamental Beckerian concepts: human capital and matching." Drawing on Becker's groundbreaking JPE scholarship from 1973, the authors' model contends that marital sorting patterns rely on human capital considerations for complementarity and substitutability and that intra-household resource allocation is related to the conditions of the marriage market, a demand for public goods, and the motivation to share economic and social risks. The authors explain that these issues help describe marriage markets and intra-household inequality and could inform future education policy.
In "Children, Time Allocation, and Consumption Insurance," Richard Blundell, Luigi Pistaferri, and Itay Saporta-Eksten explore resource allocation by considering how households decide to divide spouses' time and consumption between work, leisure, and childcare. Using Becker's pioneering studies from the 1960s and 70s as a base, the authors find that mothers work less outside the home when their spouse's wages are temporarily raised. This is due to the spouse's increased work time - occurring in conjunction with the wage increase - which results in fewer available hours to devote to childcare. To compensate for the lost childcare hours, mothers spend more time with their children and less time at their own jobs.
"Social Norms in Social Insurance" by Assar C. E. Lindbeck and Mats Persson investigates the interplay between economic incentives and the social customs of receiving welfare payments. The authors focus on income received from insurance associated with sick leave and temporary disability, but the analysis is also relevant for other forms of income insurance impacted by policy, such as early retirement for health reasons and unemployment insurance. The authors suggest that insurers can mitigate moral hazards if social norms discourage overuse or cheating of insurance benefits, though they acknowledge that societies have varying tolerances for payment system abuse.
In "Demographics and Entrepreneurship," James Liang, Hui Wang, and Edward P. Lazear explore the hinderance of age and seniority on growth in business formation and innovation: "The focus here is on another mechanism by which not only the supply of the workforce, but also the age structure of the workforce, can have a significant impact on economic performance through the channel of entrepreneurship." Looking to Becker's findings on human capital and fertility from nearly fifty years ago, the authors offer a renewed appraisal, and a more internationally focused data set--Japan's dramatic decline in birth rates over each generation since the end of World War II illustrates the starkest example of an entrepreneurial vacuum. The "advantages of youth" include the energy and creativity required to start a business, but not the experience an older worker has gained from a longer career.
While household resource availability influences how much a parent can invest in a child, innate ability is an important consideration when deciding how much a person should invest in personal development like education. James J. Heckman, John Eric Humphries, and Gregory Veramendi develop and estimate a robust dynamic model of schooling choice and its consequences in "Returns to Education: The Causal Effects of Education on Earnings, Health, and Smoking." The authors conclude that schooling, especially at higher tiers, "has strong causal effects on earnings, health, and healthy behaviors." The article features web appendices with additional analyses that supplement and support the authors' set of six broad conclusions, some with policy implications, including: "There are substantial benefits from graduating high school that are especially strong for the less able, many of whom currently do not graduate," and "There are no causal effects of college graduation for low-ability persons. College graduation is not for all."
This issue stands as a testament to Becker's far-reaching contributions to and influence on the field of economics, its scholars, and the world beyond academia.
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One of the oldest and most prestigious journals in economics, the Journal of Political Economy (JPE) has since 1892 presented significant research and scholarship in economic theory and practice. The journal aims to publish highly selective, widely cited articles of current relevance that will have a long-term impact on economics research. JPE's analytical, interpretive, and empirical studies in a number of areas--including monetary theory, fiscal policy, labor economics, development, micro- and macroeconomic theory, international trade and finance, industrial organization, and social economics--are essential reading for all economists wishing to keep up with substantive new research in the discipline.
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