A century of labor leisure tradeoff

Licensure

Medical licensing only became important 100 years ago with the publishing of the Flexner Report.  Other occupations have been catching up since then.  Due to licensing requirements in Illinois, it took longer to "become a master plumber than for a newly graduated physician to become a Fellow of the American College of Surgeons." Alan Kreuger says licensing is growing in many sectors of the economy:

Morris M. Kleiner, ...questions whether occupational licensing has gone too far. He provides much evidence that the balance of occupational licensing has shifted away from protecting consumers and toward limiting the supply of workers in various professions. A result is that services provided by licensed workers are more expensive than necessary and that quality is not noticeably affected.... Professor Kleiner conservatively estimates that 20 percent of workers in 2000 were in an occupation that was covered by a state licensing requirement, up from 5 percent in the 1950's.
He said that licensing has mushroomed because the service sector, where licensing is more prevalent, has grown rapidly and because more occupations have started requiring licenses.
...A state-by-state list of the occupations covered by licensing requirements is available from www.acinet.org/acinet/licensedoccupations.... Perhaps as many as 3 of every 10 workers nationwide are required to obtain a license to do their job.... Kleiner and a colleague, Robert T. Kudrle, found that stricter state licensing requirements for dentists did not noticeably affect the dental health of 464 Air Force recruits. Other studies have found at best weak evidence that students in classes taught by licensed teachers performed better than those taught by unlicensed teachers.
Summarizing the literature, Professor Kleiner concludes, "there is little to show that occupational regulation has a major effect on the quality of service received by consumers."
At the same time, the hurdles imposed by occupational licensing reduce the supply of workers in many regulated professions, which drives up wages in those jobs and the price of services. Dentists, for example, were found to earn and charge 11 percent more in states with the most restrictive licensing requirements. While tough licensing standards may help higher-income consumers avoid low-quality providers, it also appears to prevent lower-income consumers from gaining access to some services.
Professor Kleiner said that a frequent pattern was for workers who have common interests and provide a homogeneous service to form an association. That association then seeks regulation to restrict the number of people who can work in the occupation. The state legislature and governor have little incentive to resist this pressure because the state gains revenue from license fees.
The most notable opposition to licensing comes from large buyers like hospitals, which object to the monopolization of their suppliers. In most cases, however, consumers are diffuse and have little individual incentive to oppose licensing.
Another factor driving the growth of occupational licensing is the decline of labor unions. Apparently, the labor market abhors a vacuum; it needs some institutions and rules to function. Occupational licensing has replaced unions as the main labor market institution. There are now more than twice as many workers covered by occupational licensing provisions as are covered by a labor union contract.
"There is a lot more flexibility with unions than occupational licensing," Professor Kleiner said. Unions, he pointed out, negotiate at the company level and can be decertified, whereas occupational license requirements are typically statewide and rarely repealed.

Women Earned The Majority of Doctorates In 2009

Chronicle

Impact of Recessions on Earnings

People who get laid off during a recession lose their skills because they cannot get another job quickly and skills depreciate.  Plus, employers discriminate against people who have been unemployed (or underemployed) for an extended time.  These factors and others like the depression that often haunts the unemployed have long-lasting effects.  Kevin Drum:

Here's a gloomy chart from a new Brookings paper. It shows the average wages of men under 50 who lose their jobs in a "mass layoff" event.

• The red line is for men who are laid off during good economic times. On average, these men have steeply rising earnings in the five years before the layoff and then experience a big earnings plunge. They eventually get back to their old earnings level, but that's it. Their earnings never again get above that.
• The blue line is for men who are laid off during recessions. They also have steeply rising earnings in the five years before the layoff and then experience a big earnings plunge. However, they never even come close to their old earnings level. They max out at about $36,000 compared to peak earnings before the layoff of $45,000.

The steeply rising earnings before the layoff are a little perplexing to me, and I wonder if this is related in any way to the probability of being laid off in the first place. The main takeaway, though, is that if you lose your job during a recession, you are probably screwed for the rest of your life. Even ten years later you'll earn about 20% less than you did before. This price has been paid needlessly by hundreds of thousands of workers because our political leaders have never had the courage to take action strong enough to get our economy moving again.

Gender, Height, Intelligence, and Status

 Unlike the psychologist below, I do not endorse the idea that men are more intelligent than women on average because it is really hard to define intelligence.  Men are more intelligent than women on some kinds of tasks and clearly less intelligent than women on other kinds of tasks.  Given that men largely created the IQ tests, it should not be too surprising if they selected tasks that felt they were good at to put on the IQ tests.  It is impossible for me to say which kinds of intellectual tasks are the most important parts of intelligence, so I do not claim that one gender is more intelligent than the other.  However, I have never seen a behavioral quality where men have less variance than women.  No doubt some exist, but all the (somewhat limited) studies I have seen have demonstrated that men are more variable.  That is important for explaining differences in extremes between men and women. For example, most mentally retarded people are men and most geniuses are too.   Psychology Today:

The orthodoxy in intelligence research for the second half of the 20th century had been that men and women had the same average intelligence, but men had greater variance in their distribution than women.  Most geniuses were men, and most imbeciles were men, they said, while most women were in the normal range.  This conclusion, however, was manufactured out of political expediency.  Not wanting to discover, or a priori denying, any sex differences in intelligence, psychometricians simply deleted from the standardized IQ tests any item on which the performance of men and women differed.
More recently, however, especially since the turn of the millennium, there have been an increasing number of studies that cast doubt on this politically correct conclusion.  Studies with large representative national samples from Spain, Denmark, and the United States, as well as meta-analyses of a large number of published studies throughout the world, all conclude that men on average are slightly but significantly more intelligent than women, by about 3-5 IQ points.  So this has now become the new (albeit tentative) consensus in intelligence research.
...Psychometricians have known since the end of the 19th century that height is positively correlated with intelligence:  Taller people on average are more intelligent than shorter people.  And men in every human population are taller than women.  So one possibility is that men are more intelligent than women, not because they are men, but because they are taller.
... In fact, once we control for height, women are slightly but significantly more intelligent than men.  Further controlling for health, physical attractiveness, age, race, education, and earnings does not alter this conclusion.  Height has exactly the same effect on intelligence for men and women:  Each inch in height increases the IQ by about .4 point.  The partial effect of height on intelligence is more than three times as strong as the partial effect of sex.
So it is not that men are more intelligent than women, but that taller people are more intelligent than shorter people, but net of height women are more intelligent than men.  Women who are 5’10” are on average more intelligent than men who are 5’10”, and women who are 5’5” are on average more intelligent than men who are 5’5”.  But, more importantly, people who are 5’10” are significantly more intelligent than people who are 5’5”, and most people who are 5’10” are men and most people who are 5’5” are women.

Kanazawa continues:

why are taller people more intelligent than shorter people? ...we don’t know for sure, but there are two possible explanations.  First, both height and intelligence may be indicators of underlying health.  According to this view, people who are genetically and developmentally healthier simultaneously grow taller and become more intelligent than those who are less healthy, producing the positive correlation between height and intelligence.

Kanazawa has evidence that health and intelligence are uncorrelated and he believes that intelligence and height are correlated because both are sexy!  His only evidence is the correlation between the three:  

...Taller people are on average physically more attractive than shorter people; physically more attractive people are on average more intelligent than physically less attractive people; taller people are on average more intelligent than shorter people... But the issue is far from resolved.  While there is no doubt that taller people are indeed more intelligent than shorter people, the question of why this is so is one of the remaining puzzles in evolutionary psychology.

 So, maybe the reason that tall people and beautiful people earn more than the rest of us is that they are smarter on average.  If so, then work hard on your schoolwork because smarts can be developed by exercising your brain.  An alternative hypothesis is that height, and beauty, are correlated with self-confidence and status and that leads to higher achievement on intelligence tests and higher earnings.  Again, confidence and status can be developed by working hard to achieve mastery.  Social support helps increase learning, confidence, and status.  Encourage your friends to work (and think) hard. 
Society awards status to tall, beautiful people and that increases confidence.  One study found that it is one's relative height in adolescence that increases later smarts and earnings rather than one's height at other ages.  It is hard to think of a biological reason why height in adolescence would increase later earnings and smarts, but it is easy to see why it would increase status and confidence during an extremely socially awkward time in most people's lives.  Similarly, several studies have found that it is relative height that gives a lifelong advantage to soccer players (in Europe) and hockey players (in Canada).  The kids who have birthdays near the youth league cutoff dates typically end up as the professional athletes.  That is because the older kids are relatively tall compared with other kids in their leagues growing up and that creates status and confidence and helps them get a lot of practice and love of the game.   

Cynical Thoughts On The Minimum Wage | ThinkProgress

Cynical Thoughts On The Minimum Wage | ThinkProgress:

Arindrajit Dube surveys the post-Card/Krueger minimum wage literature and concludes that their study basically holds up. My general view, with apologies to empirical econometricians doing policy-relevant work everywhere, is that one can generally Google up a study supporting whichever conclusion one prefers.

Consequently, I’ve always thought the most persuasive evidence on this was simply the big picture:

It’s clearly not the case that the high real minimum wage of the 1960s led to unusually elevated unemployment during that decade. And the fact is even more striking when you consider that the real wages of folks in the top quintile were way lower back then.