Edward Lazear
Encyclopedia
Edward Paul "Ed" Lazear is an award-winning American
economist
, considered the founder of personnel economics
, and was the chief economic advisor to President
George W. Bush
.
with a bachelor's degree
and master's degree
in economics in 1971. He received his doctorate
in economics from Harvard University
in 1974.
From 1985 to 1992, he was a professor of Urban
and Labor Economics at the University of Chicago
. Since 1992, he has been an economics professor at Stanford Graduate School of Business
. Lazear has served as a research assistant at the National Bureau of Economic Research
, as well as a research fellow at the Centre for Economic Policy Research
and the Institute for the Study of Labor
. He is a Morris Arnold Cox Senior Fellow at Stanford University
's Hoover Institution
. In 1996, he founded the Society of Labor Economists. Prior to his nomination and confirmation as chief economic advisor to the President, Lazear was a member of Bush's tax reform advisory panel in 2005.
. He has published over 100 scholarly articles. http://faculty-gsb.stanford.edu/lazear/Personal/downloads.html
Most of his work has to do with motivating and compensating workers. One of his most famous papers, "Rank-Order Tournaments as Optimum Labor Contracts," argues that in certain circumstances, it is in a firm's best interest to rank its employees and pay particularly high wages to the top-ranked employees. This helps explain why the highest jobs, like chief executive officer
, often draw paychecks that are much higher than the next-highest jobs, even though the skill differences between those employees are not very high. It also helps explain the partnership structure of law firms, in which associate lawyers compete to become partners and earn a much higher salary. He has also analyzed how peer pressure
and mandatory retirement
can help reduce principal–agent problems in companies.
s. This has led to criticism of Lazear by organizations opposed to tax patents, such as Citizens for Tax Justice
. Lazear, however, no longer has any ownership rights in these pending applications and cannot receive any royalties
from them should they ever issue as valid patents. The full ownership rights to these applications are owned by Liquid Engines
.
Articles
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economist
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, considered the founder of personnel economics
Personnel economics
In the 1970s, there was a flurry of research that sought to answer the questions of how prices of goods and services traded within a firm are determined. Many questions about how wages are determined inside a firm, and how the wages of the workers relate to one another within a firm, was raised as...
, and was the chief economic advisor to President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
.
Career
Lazear graduated from the University of California, Los AngelesUniversity of California, Los Angeles
The University of California, Los Angeles is a public research university located in the Westwood neighborhood of Los Angeles, California, USA. It was founded in 1919 as the "Southern Branch" of the University of California and is the second oldest of the ten campuses...
with a bachelor's degree
Bachelor's degree
A bachelor's degree is usually an academic degree awarded for an undergraduate course or major that generally lasts for three or four years, but can range anywhere from two to six years depending on the region of the world...
and master's degree
Master's degree
A master's is an academic degree granted to individuals who have undergone study demonstrating a mastery or high-order overview of a specific field of study or area of professional practice...
in economics in 1971. He received his doctorate
Doctorate
A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder to teach in a specific field, A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder...
in economics from Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
in 1974.
From 1985 to 1992, he was a professor of Urban
Urban economics
Urban economics is broadly the economic study of urban areas; as such, it involves using the tools of economics to analyze urban issues such as crime, education, public transit, housing, and local government finance...
and Labor Economics at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
. Since 1992, he has been an economics professor at Stanford Graduate School of Business
Stanford Graduate School of Business
The Stanford Graduate School of Business is one of the professional schools of Stanford University, in Stanford, California and is broadly regarded as one of the best business schools in the world.The Stanford GSB offers a general management Master of Business Administration degree, the Sloan...
. Lazear has served as a research assistant at the National Bureau of Economic Research
National Bureau of Economic Research
The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...
, as well as a research fellow at the Centre for Economic Policy Research
Centre for Economic Policy Research
The Centre for Economic Policy Research , a registered charity founded in 1983 by Richard Portes , FBA, CBE, is a network of over 700 researchers based mainly in universities throughout Europe, who collaborate through the centre in research and its dissemination...
and the Institute for the Study of Labor
Institute for the Study of Labor
The Institute for the Study of Labor is a private, independent economic research institute. It was founded under the legal form of a limited liability company. Its German name is Forschungsinstitut zur Zukunft der Arbeit hence the abbreviation IZA...
. He is a Morris Arnold Cox Senior Fellow at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
's Hoover Institution
Hoover Institution
The Hoover Institution on War, Revolution and Peace is a public policy think tank and library founded in 1919 by then future U.S. president, Herbert Hoover, an early alumnus of Stanford....
. In 1996, he founded the Society of Labor Economists. Prior to his nomination and confirmation as chief economic advisor to the President, Lazear was a member of Bush's tax reform advisory panel in 2005.
Research
Lazear is the founding editor of the Journal of Labor EconomicsJournal of Labor Economics
The Journal of Labor Economics is an academic journal published quarterly by the University of Chicago Press on international research examining issues affecting the economy as well as social and private behavior...
. He has published over 100 scholarly articles. http://faculty-gsb.stanford.edu/lazear/Personal/downloads.html
Most of his work has to do with motivating and compensating workers. One of his most famous papers, "Rank-Order Tournaments as Optimum Labor Contracts," argues that in certain circumstances, it is in a firm's best interest to rank its employees and pay particularly high wages to the top-ranked employees. This helps explain why the highest jobs, like chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
, often draw paychecks that are much higher than the next-highest jobs, even though the skill differences between those employees are not very high. It also helps explain the partnership structure of law firms, in which associate lawyers compete to become partners and earn a much higher salary. He has also analyzed how peer pressure
Peer pressure
Peer pressure refers to the influence exerted by a peer group in encouraging a person to change his or her attitudes, values, or behavior in order to conform to group norms. Social groups affected include membership groups, when the individual is "formally" a member , or a social clique...
and mandatory retirement
Retirement
Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours.Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to...
can help reduce principal–agent problems in companies.
Patents
Edward Lazear is listed as a coinventor on 5 pending US patent applications. Some of these pending patent applications are considered to be tax patentTax patent
A tax patent is a patent that discloses and claims a system or method for reducing or deferring taxes. Tax patents have been granted predominantly in the United States but can be granted in other countries as well. They are considered to be a form of business method patent. They are also called...
s. This has led to criticism of Lazear by organizations opposed to tax patents, such as Citizens for Tax Justice
Citizens for Tax Justice
Citizens for Tax Justice is a non-profit research and advocacy think tank based in Washington, DC. CTJ’s work focuses primarily on federal tax policy...
. Lazear, however, no longer has any ownership rights in these pending applications and cannot receive any royalties
Royalties
Royalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
from them should they ever issue as valid patents. The full ownership rights to these applications are owned by Liquid Engines
Liquid Engines
Liquid Engines is a software company headquartered in Sunnyvale, California. It provides products to help corporations manage their taxes. -Patent controversy:...
.
Awards
Lazear has won a number of awards over his career. Among those that he has won are:- 1998 Leo MelamedLeo MelamedLeo Melamed is a former chairman of the Chicago Mercantile Exchange , current board member of CME Group and chairman of the CME Group Foundation. He is a longtime executive in the field of global derivatives....
Biennial Prize. - 2003 Adam SmithAdam SmithAdam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
Prize, European Association of Labor Economists. - 2004 IZA Prize in Labor Economics, Institute for the Study of LaborInstitute for the Study of LaborThe Institute for the Study of Labor is a private, independent economic research institute. It was founded under the legal form of a limited liability company. Its German name is Forschungsinstitut zur Zukunft der Arbeit hence the abbreviation IZA...
.
Publications
BooksArticles
- (with Sherwin RosenSherwin RosenSherwin Rosen was an American labor economist. He had ties with many American universities and academic institutions including the University of Chicago, the University of Rochester, Stanford University and its Hoover Institution. At the time of his death, Rosen was Edwin A. and Betty L...
), 'Rank-Order Tournaments as Optimum Labor Contracts' (1981) 89(5) Journal of Political Economy 841
External links
- Edward Lazear's personal homepage.
- Lazear's Hoover Institute bio.