Edward Lazear facts for kids
Quick facts for kids
Edward Lazear
|
|
|---|---|
.jpg) |
|
| 24th Chairman of the Council of Economic Advisers | |
| In office February 27, 2006 – January 20, 2009 |
|
| President | George W. Bush |
| Preceded by | Ben Bernanke |
| Succeeded by | Christina Romer |
| Personal details | |
| Born |
Edward Paul Lazear
August 17, 1948 New York City, New York, U.S. |
| Died | November 23, 2020 (aged 72) |
| Political party | Republican |
| Spouse | Victoria Lazear |
| Education | University of California, Los Angeles (BA, MA) Harvard University (PhD) |
Edward Paul Lazear (/ləˈzɪər/, lə-ZEER; August 17, 1948 – November 23, 2020) was an American economist. He was a professor at Stanford University and a senior fellow at the Hoover Institution.
Lazear was the Chairman of the Council of Economic Advisers from 2006 to 2009. In this role, he was the main economic advisor to President George W. Bush. He was part of the White House team that helped the country during the 2007-2008 financial crisis. Many people call Lazear the founder of personnel economics. This is a part of economics that looks at how businesses manage their employees. His work helped create new ideas about how to motivate employees, offer promotions, and pay workers. He also developed ideas about how people become entrepreneurs and leaders by learning many different skills.
Contents
Early Life and School
Edward Lazear was born in New York City on August 17, 1948. He grew up in Brooklyn, New York, before his family moved to Los Altos, California. His father worked in a shipyard during World War II and also as a hospital janitor. His mother was a salesperson in a jewelry store. When he was in high school, he worked in a hospital mailroom. He was also on his school's cross-country running team.
Lazear went to the University of California, Los Angeles. He earned his bachelor's and master's degrees in 1971. His wife shared that he found school tough at first. But then he took an economics class and really enjoyed it. He decided to major in economics. He later earned his PhD in economics from Harvard University in 1974.
Career Highlights
Lazear started his career in 1974 at the University of Chicago School of Business. He began as an assistant professor. He became a full professor there in 1985. During his time in Chicago, he worked with Gary Becker. They used economic ideas to study different areas of life. He worked at the University of Chicago for 20 years. After that, he joined the faculty at the Stanford Graduate School of Business.
At Stanford University, he taught about human resources and economics. He also became a senior fellow at the Hoover Institution in 1985. While at Stanford, he started the Journal of Labor Economics. He also founded the Society of Labor Economists.
Lazear was a research fellow at several places around the world. These included the Stanford Institute for Economic Policy Research and centers in Denmark and Germany. He also visited universities in Paris, Vienna, and Jerusalem. He gave lectures in many countries, including Australia, England, and India. After leaving his role as Chairman of the Council of Economic Advisors, Lazear often appeared on TV. He also wrote articles for The Wall Street Journal.
Understanding Work and Pay
Lazear is seen as a leader in labor economics and personnel economics. These fields study how wages and jobs work in the economy. His 1995 book, Personnel Economics, was very important. It helped start a lot of new research into how companies and workers interact.
In a key paper in 2000, he looked at how paying workers based on what they produce affects how much they get done. He found that this type of pay attracted better workers. It also made workers produce more. For example, he studied a company called Safelight Glass. When the company changed from hourly pay to pay based on results, worker output went up by 44%. He explained that this wasn't just because workers tried harder. It also happened because the company attracted and kept more efficient workers.
Earlier in his career, in 1979, he wrote about why companies used to have mandatory retirement ages. He suggested that companies could pay workers less when they are young and more when they are older. This would encourage workers to stay. He argued that mandatory retirement helped solve some problems with this system. However, the U.S. Congress made mandatory retirement illegal in 1986.
Lazear also worked with Professor Sherwin Rosen to create Tournament theory. This idea suggests that pay differences can be based on how workers rank against each other. It's not just about how much each person produces. In their 1981 paper, they showed that paying workers based on their rank can encourage them to work harder. This is because they want to move up in the company.
He believed that free markets and competition were good for everyone. He argued that they help improve the lives of poor people. He once quoted President Kennedy saying, "a rising tide lifts all boats." This means that when the economy grows, everyone benefits. His research also found that if a country changes its name to remove words like "democratic" or "socialist," the income of poor people often goes up.
Helping During the Financial Crisis
Professor Lazear was the Chairman of the Council of Economic Advisors during the 2007-2008 financial crisis. This period also included the Great Recession. As President Bush's chief economic advisor, he helped the White House team create plans to deal with the crisis. They worked to fix the financial system. Lazear's team developed the Economic Stimulus Act of 2008. This law provided money to help boost the U.S. economy. It was passed very quickly in early 2008. President Bush signed it into law with support from both political parties. During this time, he often visited Camp David with President Bush. The President even gave him the nickname 'stork'.
Before this role, Lazear was part of President Bush's Advisory Panel for Federal Tax Reform in 2005. He worked with other experts to suggest changes to tax laws. Their goal was to make taxes simpler without reducing government income.
Other Interesting Research
How Schools Work
In 2001, Lazear introduced the idea of an "education production function" for classrooms. He suggested that larger class sizes could work well for students who behave properly. He argued that if one student causes trouble, it affects everyone's learning. He also said this might explain why Catholic schools often do better than public schools, even with larger classes.
Lazear also studied high-stakes testing. This is when tests have big consequences, like deciding if a student moves to the next grade. Some educators worried that these tests would make students only learn what's on the test. Lazear compared this to how police use speed traps to stop drivers from speeding. He suggested that for younger students, tests should be clear about what they cover. For older students, tests could be more open-ended.
Culture and Language
Lazear also looked at why multiculturalism is growing. He connected it to how important culture and language are to people. He believed that culture and language help people trade and work together. He suggested that minority groups often learn the main language and culture of a society. This helps them connect with more people. He also thought that governments encouraging different cultures to come to a country could be good for society.
Becoming an Entrepreneur
Lazear tried to find out what makes people successful entrepreneurs. He found that successful entrepreneurs often have many different skills. They are like "jacks-of-all-trades" instead of being experts in just one area. He studied people who graduated from Stanford. He found that those with varied work and education backgrounds were more likely to become successful entrepreneurs.
Awards and Recognition
Edward Lazear received many awards during his career:
- 1994 Distinguished Teaching Award, Stanford University
- 1998 Leo Melamed Biennial Prize
- 2003 Adam Smith Prize
- 2004 IZA Prize in Labor Economics
- 2006 Jacob Mincer Award for his lifetime work in labor economics
- 2019 Elected Distinguished Fellow of the American Economic Association
His book, Personnel Economics (1995), was chosen as an outstanding book by MIT Press. It was also named one of the ten most important books in Labor Economics by Princeton in 1996. Lazear also received honorary degrees from several universities. He was an elected fellow of important groups like the American Academy of Arts and Sciences. He also received many grants from the National Science Foundation.
Personal Life
Lazear was married to Victoria, who worked as a consultant. They had one daughter. He loved being outdoors. He enjoyed traveling, skiing, and mountain biking.
Edward Lazear passed away on November 23, 2020, from pancreatic cancer.
