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The Journal of Economic Perspectives
Volume 13, Number 3, Summer 1999
Symposium
We distinguish between policy and “destiny” explanations of Africa’s slow growth during the past three decades. Policies were poor: high export taxation and inefficient public service delivery, and “destiny” was adverse: landlocked, tropical locations, and terms of trade deterioration. During the 1990s, Africa’s economic policies improved, although with considerable variation both between countries and between policies: trade and exchange rate policies improved much more than service delivery. Thus, the differing explanations of past slow growth imply different predictions for growth in the coming decade. We argue that poor public economic services are likely to be the binding constraint.
African states that came to independence by the late 1960s made a rapid transition to authoritarian rule during a period of reasonably robust growth. Growth then faltered badly from the mid-1970s to the mid-1990s as these regimes coped with external shocks and varying degrees of fiscal crisis. Leading critics embed Africa’s slow growth in failures of governance associated with “weak” authoritarian rule. These provide important insights into policy patterns while suggesting the growth-promoting potential of Africa’s recent Democratization.
Intercountry comparisons show Africa’s health and education falls short of other regions, controlling for income, women’s educations, and urbanization, but growth regressions do not clarify whether this low human capital caused slow growth. Microeconometric estimates of wage returns to schooling and health indicate relatively attractive private returns in several sub-Saharan countries, although data are severely limited. Biases due to household heterogeneity and selection into the sample of wage earners do not appear to alter these assessments that the quantity and quality of human capital investments will affect future economic growth in Africa and its more equitable distribution.
Historical and micro-survey evidence, as well as the standard data from international organizations, support less pessimistic conclusions on Africa’s development performance than those reached by many social scientists. The changes that have benefited women over the last four decades are highlighted; a discussion of growth in agricultural production follows. However, the complexity and the brutality of processes of social and economic change in Sub-Saharan African economies are also stressed. The theoretical implications of these complexities have not been adequately analyzed by World Bank economists. The Bank’s recent efforts to reassess its policies are, therefore, unlikely to achieve the results anticipated.
Articles
Presents results from a survey of 450 new (1996-97) Ph.D. economists, providing information about employment, underemployment, employers, work activities, salaries, and job satisfaction. Comparisons are made across ranks of the graduates’ Ph.D. programs, sectors of employment and subfields of economics, as well as over time. Labor market outcomes for economists also are compared with those of seven other disciplines. Results indicate that a growing proportion of new economics Ph.D.’s start their careers in business or industry, that an international market for new economics Ph.D.s is evolving, and that job outcomes for economists compare favorably with new Ph.D.’s in many other disciplines.
This essay addressed the changing demographic composition of new Ph.D.s in economics and the changing distribution of the jobs that they are obtaining. It discusses how future trends may interact to influence the types of training that economists may provide their graduate students and the types of faculty positions that academic institutions may provide for new Ph.D. economists in the future.
This paper contrasts the job market in economics with the job market in physics and mathematics, which attract students who are, by conventional measures, smarter than economists and where the base of knowledge is better established than ours. Despite this, economists earn more and have better career prospects than physicists or mathematicians. The paper offers several reasons for our better economic prospects, ranging from lack of glamour attracting bright young people to the dismal science to our inability to solve important problems, which puts us higher up on the marginal product curve for basic research than these fields.
The Siegfried-Stock findings represent the first solid data available since COGEE collected its data in the late 1980s. This paper reviews the COGEE findings in light of the new evidence. On the whole, the news is good: new Ph.D.’s awarded are up, economics remains one of the most highly-paid Ph.D. careers, and delays in finding employment are very short. A number of questions remain, however, that cannot be answered with the data at hand. These include the degree to which the demand for new Ph.D.’s will be sustained, and the ways in which economics departments are serving those students not intending a research career.
In social experiments, individuals, households, or organizations are randomly assigned to two or more policy interventions. Elsewhere, we have summarized 143 experiments completed by autumn 1996. Here, we use the information we have gathered on these experiments and findings from informal telephone interviews to investigate the social experiment market—the buyers and sellers in the market that governs the production of experiments. We discuss target populations, types of interventions tested, trends in design, funding sources, industry concentration, the role of economists in social experimentation, the reasons few social experiments have been conducted outside the United States, and the future of the social experiment market.
America’s casino industry expanded rapidly in the 1990s, spreading from Nevada and Atlantic City to mining towns, riverboats, race tracks and tribal lands, and moving from isolated resort settings to urban and suburban venues. This article examines economic characteristics of the casino industry, including the evolution of major casino markets, pricing of gaming products, market structures, regulatory constraints, and social and economic impacts attributable to casinos. When competitive, casinos show strong economies of scale and scope, but many new jurisdictions limit the number or size of operations, thus creating substantial economic rents. Allocation of these rents are fundamentally politically determined.
Features
Many government programs have implicit penalties or subsidies for marriage. For example, many couples pay higher income taxes when married than their combined tax liabilities as single filers, while many other couples receive a marriage subsidy because their joint taxes fall with marriage. Likewise, most low-income couples are eligible for higher welfare benefits if they are separated rather than married. This article discusses the marriage penalty, with a particular focus on tax and transfer programs. Why does it exist? Who faces it? To what extent does it affect marriage and labor market behavior? What tradeoffs are involved in reducing it?
Economics is often taught at a level of abstraction that can hinder some students from gaining basic intuition. However, lecture and textbook presentations can be complemented with classroom exercises in which students make decisions and interact. The approach can increase interest in and decrease skepticism about economic theory. This feature offers short descriptions of classroom exercises for a variety of economics courses, with something of an emphasis on the more popular undergraduate courses.
This section will list readings that may be especially useful to teachers of undergraduate economics, as well as other articles that are of broader cultural interest. In general, the articles chosen will be expository or integrative and not focus original research. They may include survey articles, discussion of related subjects in which economists might have an interest, or analyses of economics from other perspectives. The intention is to publish a selective list of 15 to 20 articles per issue.