Edward P. Lazear, a pioneering labor economist at Stanford College who suggested President George W. Bush through the monetary disaster, died on Monday. He was 72.
The trigger was pancreatic most cancers, the university said. It didn’t say the place he died.
Professor Lazear could also be finest remembered because the founding father of a discipline that has come to be generally known as personnel economics, which seeks to grasp how companies rent, retain and pay workers. He additionally based the Journal of Labor Economics and the Society of Labor Economists.
However maybe his most important job was as chairman of President Bush’s Council of Financial Advisers when the American monetary system buckled after a housing and debt bubble had burst, forcing the federal authorities to spend tons of of billions of {dollars} to bail out monetary establishments and rescue a sinking financial system.
“Eddie Lazear was a uncommon mixture — a rare educational economist and a devoted public servant who introduced that mind and talent to the answer of massive coverage issues,” stated Condoleezza Rice, director of Stanford’s Hoover Establishment, the place Professor Lazear held a senior fellowship.
In a statement, Mr. Bush referred to as him “a trusted confidant” and “a beloved colleague.”
Edward Paul Lazear was born in New York Metropolis on Aug. 17, 1948, and grew up in Los Altos, Calif. He graduated from the College of California, Los Angeles, in 1971 and acquired his Ph.D. in economics from Harvard College, the place he labored with the Nobel Prize winner Gary Becker and adopted his strategy of making use of financial instruments to new domains.
Professor Lazear started his skilled profession in 1974 as an assistant professor of economics on the College of Chicago. He taught there for nearly 20 years earlier than becoming a member of the Stanford school.
“He was essentially the most pure economist I ever got here into contact with,” stated Paul Oyer, an economist at Stanford’s Graduate Faculty of Enterprise. “He was a deep financial pure thinker; he was born to be an economist.”
Professor Lazear wrote a seminal paper in regards to the relationship between employee pay and an organization’s productiveness and income; it was primarily based on a case research of the Safelight Glass Firm. Productiveness on the enterprise soared when it shifted from paying staff an hourly wage to paying them in accordance with the variety of windshields they repaired. Professor Lazear discovered that this enchancment hadn’t come about simply because folks had labored tougher to earn more cash. Slightly, he discovered, the shift in wage coverage had modified the composition of the installers: Slower staff had left the corporate and sooner staff had taken their jobs.
Professor Lazear wrote another famous paper explaining the rationale behind mandatory retirement, which was outlawed by Congress in 1986. He proposed that it’s worthwhile for corporations to pay staff lower than what they’re price to the enterprise when they’re younger, after which to lift their wages over time, to the purpose the place they’re paying them greater than they’re price. However that, he discovered, meant that workers would attempt to dangle on to their job for too lengthy. Necessary retirement thus helped remedy the issue.
“He’s the daddy of a discipline that has had a variety of affect in the way in which companies design compensation and make hiring and retention insurance policies,” stated Erik Hurst, a labor economist on the College of Chicago. “That is of first-order significance for a way folks reside their lives.”
Professor Lazear fell squarely on the fitting of the financial coverage spectrum. He was a fierce critic of the Obama administration’s fiscal stimulus insurance policies. He later championed the tax cuts signed by President Trump in 2017. He believed within the effectivity of markets and disliked the minimal wage and different authorities interventions.
However even his ideological opponents acknowledged his integrity and dedication to rigorous pondering.
“I admired the purity of his dedication to economics,” stated Lawrence H. Summers, the previous Harvard president and Treasury secretary. “It is extremely uncommon amongst economists who work on issues which have a bearing on politics.”
Lawrence Katz, a professor of economics at Harvard, stated Professor Lazear’s work had typically reached conclusions at odds with conservative views and insurance policies.
“He was not ideological on all issues,” Professor Katz stated, declaring Professor Lazear’s work with Richard B. Freeman on the value of works councils, that are utilized in many European nations to provide staff voice and energy to barter with employers.
Professor Lazear’s work additionally served to dispel the notion standard amongst American conservatives that policies that guaranteed job security condemned Europe to high unemployment and low productivity.
In the course of the monetary disaster of the late 2000s and its aftermath, Professor Lazear was a essential voice demanding consideration to the faltering job market as hundreds of thousands of individuals misplaced jobs and many individuals struggled to search out work for months and even years.
“You may see in his coverage work these considerations for staff and their abilities and the way exhausting it’s to transition between industries,” stated Austan Goolsbee, who chaired the Council of Financial Advisers through the Obama administration.
Professor Lazear is survived by his spouse, Victoria Lazear, and his daughter, Julie Lazear.
