The Importance of Human Capital in Policy Discourse

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Economists have improved our understanding of something that wouldn't have otherwise been obvious to the general public or to policy makers. I'm worried that we're making a mistake when we conclude that minimum wage increases don't affect employment very much in the current range. If you ask me for the largest macroeconomic victory for economic policy relevant to empirical work, I would say it's free-minute squirts and inflation.

Joshua Angrist of the Massachusetts Institute of Technology talks to EconTalk host Russ Roberts about the craft of econometrics--how to use economic thinking and statistical methods to make sense of data and uncover causation. Angrist argues that improvements in research design along with various econometric techniques have improved the credibility of measurement in a complex world. Roberts pushes back and the conversation concludes with a discussion of how to assess the reliability of findings in controversial public policy areas.