Edward P. Lazear, a pioneering labor economist at Stanford University who suggested President George W. Bush through the monetary disaster, died on Monday. He was 72.
The trigger was pancreatic most cancers, the university said. It didn’t say the place he died.
Professor Lazear could also be greatest remembered because the founding father of a area that has come to be often called personnel economics, which seeks to know how companies rent, retain and pay workers. He additionally based the Journal of Labor Economics and the Society of Labor Economists.
But maybe his most important job was as chairman of President Bush’s Council of Economic Advisers when the American monetary system buckled after a housing and debt bubble had burst, forcing the federal authorities to spend a whole bunch of billions of {dollars} to bail out monetary establishments and rescue a sinking economic system.
“Eddie Lazear was a rare combination — an extraordinary academic economist and a dedicated public servant who brought that intellect and skill to the solution of big policy problems,” stated Condoleezza Rice, director of Stanford’s Hoover Institution, the place Professor Lazear held a senior fellowship.
In a statement, Mr. Bush referred to as him “a trusted confidant” and “a beloved colleague.”
Edward Paul Lazear was born in New York City on Aug. 17, 1948, and grew up in Los Altos, Calif. He graduated from the University of California, Los Angeles, in 1971 and acquired his Ph.D. in economics from Harvard University, the place he labored with the Nobel Prize winner Gary Becker and adopted his method of making use of financial instruments to new domains.
Professor Lazear started his skilled profession in 1974 as an assistant professor of economics at the University of Chicago. He taught there for nearly 20 years earlier than becoming a member of the Stanford school.
“He was the most natural economist I ever came into contact with,” stated Paul Oyer, an economist at Stanford’s Graduate School of Business. “He was a deep economic natural thinker; he was born to be an economist.”
Professor Lazear wrote a seminal paper in regards to the relationship between employee pay and an organization’s productiveness and income; it was based mostly on a case examine of the Safelight Glass Company. Productivity at the enterprise soared when it shifted from paying staff an hourly wage to paying them in accordance with the variety of windshields they repaired. Professor Lazear found out that this enchancment hadn’t come about simply because folks had labored tougher to earn more cash. Rather, he discovered, the shift in wage coverage had modified the composition of the installers: (*72*) staff had left the corporate and quicker staff had taken their jobs.
Professor Lazear wrote another famous paper explaining the rationale behind mandatory retirement, which was outlawed by Congress in 1986. He proposed that it’s worthwhile for corporations to pay staff lower than what they’re value to the enterprise when they’re younger, and then to boost their wages over time, to the purpose the place they’re paying them greater than they’re value. But that, he discovered, meant that workers would attempt to dangle on to their job for too lengthy. Mandatory retirement thus helped clear up the issue.
“He is the father of a field that has had a lot of influence in the way firms design compensation and make hiring and retention policies,” stated Erik Hurst, a labor economist at the University of Chicago. “This is of first-order importance for how people live their lives.”
Professor Lazear fell squarely on the fitting of the financial coverage spectrum. He was a fierce critic of the Obama administration’s fiscal stimulus insurance policies. He later championed the tax cuts signed by President Trump in 2017. He believed within the effectivity of markets and disliked the minimal wage and different authorities interventions.
But even his ideological opponents acknowledged his integrity and dedication to rigorous considering.
“I admired the purity of his commitment to economics,” stated Lawrence H. Summers, the previous Harvard president and Treasury secretary. “It is very rare among economists who work on things that have a bearing on politics.”
Lawrence Katz, a professor of economics at Harvard, stated Professor Lazear’s work had usually reached conclusions at odds with conservative views and insurance policies.
“He was not ideological on all things,” Professor Katz stated, stating Professor Lazear’s work with Richard B. Freeman on the value of works councils, that are utilized in many European international locations to present staff voice and energy to barter with employers.
Professor Lazear’s work additionally served to dispel the notion common amongst American conservatives that policies that guaranteed job security condemned Europe to high unemployment and low productivity.
During the monetary disaster of the late 2000s and its aftermath, Professor Lazear was a essential voice demanding consideration to the faltering job market as tens of millions of individuals misplaced jobs and many individuals struggled to seek out work for months and even years.
“You can see in his policy work these concerns for workers and their skills and how hard it is to transition between industries,” stated Austan Goolsbee, who chaired the Council of Economic Advisers through the Obama administration.
Professor Lazear is survived by his spouse, Victoria Lazear, and his daughter, Julie Lazear.
