Economics in Action

This is the title of a research paper by economists Lena Edlund and Evelyn Korn, in which they consider the relative appeal of marriage and prostitution for women, and (closely linked) the relative appeal of wives and prostitutes for men.

Michael Noer in Forbes magazine shows wittily that the economic perspective on marriage is bleakly unromantic, but admits the point of the research is not to illuminate romantic feelings (for which we already have a culture’s worth of art and poetry) but to answer a specific question, namely, “Why do prostitutes earn so much money?” Is it compensation for the violence and disease which they are exposed to, or compensation for the fact that no-one wants to marry a prostitute?

Found via the book Economics Uncut: A Complete Guide to Life, Death and Misadventure, edited by Simon Bowmaker, which has many examples of economic research into topics like drugs, crime, abortion and gambling and includes Edlund and Korn’s original paper.

The Economist devotes 15 pages to the coming battle for talented employees. Many firms have gone as far as they can with automation and streamlining, so further improvements in productivity have to come on the human side, meaning their ability to recruit and keep bright, talented staff. While manual workers are increasingly replaced by automation, knowledge workers who can manage people and resources creatively and profitably will be increasingly in demand. As the workforce ages and jobs become more complex, competition for the best individuals will heat up.

You might be reading this as a young adult, considering how you will be earning money in the first half of the 21st Century. You might conclude that it is important to develop and prove your own abilities with a degree, especially in a course that involves numeracy and problem-solving. Far be it from WhyStudyEconomics to suggest a subject…

Further reading: “The battle for brainpower”, The Economist, 7th October 2006
Further reading: Frequently Asked Questions about studying Economics

From Degree Doctor in the Times: “Whether you are driven by money or a desire to improve the lives of others, studying economics is a smart choice.”

“Employers place a high value on the quantitative, analytical and problem-solving skills that you have gained, but will also expect you to write and communicate effectively and work well in a team.”

“As well as learning why and how markets work, they are also exposed to why and how markets fail. They are learning a lot more about the environmental consequences. They are seeing some of the problems in the world around them from an economists understanding.”

See more about the jobs economics graduates do and the money you can make elsewhere on this site.

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Anyone who is good at using computers or communicating can expect to earn considerably more than their educational qualifications alone would suggest. That is the central conclusion of research by Professor Francis Green and Dr Andy Dickerson, presented at the Royal Economic Society’s Annual Conference.

Their analysis of the 2001 Skills Survey, a nationally representative survey of 4,500 working individuals in Britain aged 20-60 (and compares it with a similar survey of 2,500 individuals in 1997), shows that: (more…)

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High-profile plant closures and job-cuttings by multinational companies have refuelled the criticism that these firms are highly footloose, quick to shift their production facilities from one country to another if the current economic environment changes to their disadvantage. One example is the US car manufacturer Ford, which announced the end of car assembly at its Dagenham plant near London, leading to 1,100 job losses, as well as 1,400 jobs lost at its plant in Genk, Belgium as part of a strategy of restructuring European operations.

But research by Holger GÃrg and Eric Strobl, presented at the Royal Economic Society’s Annual Conference, suggests that the argument is not as clear-cut as critics of multinationals make it seem. While a comparison of foreign multinationals and domestic plants shows that the former are about 40% more likely to exit an industry than comparable domestic plants, new jobs created in multinationals are about 10% more likely to survive than jobs created in similar domestic plants. (more…)

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Up to 500,000 workers may have jobs because of the UKs adoption of an inflation target. That is the central conclusion of research by Professor Christopher Martin and colleagues, presented at the Royal Economic Society’s Annual Conference.

Monetary policy in the UK has been highly successful in recent years. Following the introduction of inflation targets in October 1992, inflation has remained within 1 percentage point of the target of 2.5%. This stability is in marked contrast to the high and volatile inflation rates experienced before 1992. (more…)