Esteemed labor economist Henry Farber discusses his traditional approach to labor economics, focusing on labor unions and NYC taxi driver behavior. He shares insights on the decline of unions, explores his academic journey from engineering to economics, and reflects on the impact of a dedicated student's research on welfare benefits.
Dr. Farber's research on union behavior and labor supply offers unique insights into worker behavior and economic models.
His childhood exposure to unions shaped his career interest, transitioning from science to economics with a focus on understanding union policy.
The decline of unions in the US economy highlights the role of unions in addressing inequality and creating community among workers.
Deep dives
Exploring Labor Economics with Dr. Henry Farber
Dr. Henry Farber, a distinguished labor economist with research spanning various subjects like union behavior, arbitration systems, and labor supply, is highlighted in this podcast. Notably, his impactful work in labor economics has extended beyond economics into psychology, sociology, and political science. Farber's research delves into areas such as union behavior and the labor supply of professions like taxi drivers, shedding light on worker behavior and economic models.
Dr. Farber's Journey from Childhood Influences to Academic Career
Growing up in an industrial town heavily influenced by unions and worker dynamics, Dr. Farber developed a deep interest in labor unions early on. His exposure to unionized workers through his father's business and personal experiences during strikes shaped his career path. Farber's childhood interests in science and engineering led to an eventual transition to economics, with a focus on understanding union policy and behavior.
Research Evolution and Dissertation Focus on Union Behavior
Farber's dissertation at Princeton University explored the wage and employment policies of the United Mine Workers, modeling unions as utility maximizers. By analyzing union contracts and membership demographics, Farber's research revealed how worker preferences for wages and benefits influenced union policies. His dissertation, focusing on older worker preferences for fringe benefits, delved into union behavior modeling, a departure from more traditional economic studies of that period.
Dr. Farber's Transition to MIT and Labor Economics
Dr. Farber discusses his transition to MIT, highlighting the opportunity to build the neoclassical field of labor economics. He shares his positive experience of defining the field, attracting students interested in the subject, and forming lifelong friendships with colleagues. This period marked a significant professional growth and collaboration with esteemed individuals like Mike Peoria, contributing to the field's development.
Impact of Unions on Inequality and Labor Dynamics
Dr. Farber delves into the decline of unions in the US economy and its impact on inequality. He emphasizes the relationship between declining union presence and rising inequality, showcasing findings from his research. Additionally, he explores the role of unions in creating community and identity among workers, shedding light on their importance beyond economic aspects. The discussion points towards policy reforms to support union growth and address labor dynamics in the changing economic landscape.
Dr. Farber’s accolades are numerous: a Fellow of the Econometric Society, the Society of Labor Economists, and the Labor and Employment Relations Association, past President of the Society of Labor Economists, and recipient of the 2018 Jacob Mincer Award for Lifetime Contributions to the Field of Labor Economics. You can find more information about his background here in this short biography.
But ironically, it was for a different reason that I wanted to reach out to him. I was interested in reaching out to Dr. Farber because of his traditional approach to labor economics, such as his seminal work on labor unions and the behavior of New York City taxi drivers (to name just two). His research provides a distinct perspective on labor economics, one that doesn't fall squarely into the natural experiment momentum of his contemporaries at Princeton, despite being part of the Industrial Relations Section there. I hope you enjoy this interview as much as I did! Thank you again for all your support!
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