Plan of Heckman's Lectures

I. Facts

1. Cross-section, lifecycle (earnings dynamics) and intergenerational within and across countries
2. Top 1% and executive pay
3. Measuring poverty and real income
4. How important are trade- and skill-biased technical change?
5. Families

Theme: Skills are Important and are the Focus

II. Models to Explain Facts

1. Skill-biased technical change and tasks
2. Executive compensation
3. Sluggish response of skills to skill prices
4. Skills: definitions
5. Models of family investment

III. Policies

1. Schools and family policies
2. Minimum wage/Earned Income Tax Credit
3. Does anti-poverty policy help or hurt?

Overview

• Handout: Heckman, James J. (2015). "A Tale of Two Tales and the Middle, Too." AEA Continuing Education Program. San Francisco, CA. January 5, 2016.

Outline: Skills and Families

Main Reading and Lecture List

1. Facts and Claims
   • Basic Facts
     • Handout: Heckman, James J. (2015). "Extract from Some Facts and Open Issues in the Study of Inequality." Economics 350, Winter 2015, University of Chicago.
     • Organisation for Economic Co-operation and Development. (2011). "Divided We Stand: Why Inequality Keeps Rising." Paris: OECD Publishing.
       • Heckman, James J. (2014). "Extract from Divided We Stand: Why Inequality Keeps Rising, OECD (2011)." Handout, Economics 350, Department of Economics, University of Chicago.
     • Data Extract from Acemoglu, Daron and David Autor. (2011). "Skills, Tasks and Technologies: Implications for Employment and Earnings," In: David Card and Orley Ashenfelter, eds., Handbook of Labor Economics, Volume 4, Part B. Amsterdam: Elsevier. pp. 1043-1171.
     • Autor, David H. (2014). "Skills, education, and the rise of earnings inequality among the `other 99 percent'." Science, 344(6186): 843-851.
       • Handout for Autor (2014).
   • Skill-Biased Technical Change
     • Mishel, Lawrence, Heidi Shierholz, and John Schmitt. (2013). "Don't Blame the Robots: Assessing the Job Polarization Explanation of Growing Wage Inequality." Economic Policy Institute, EPI-CEPR Working Paper.
       • Handout for Mishel et al. (2013).
   • Earnings Dynamics
     • Meghir, Costas and Luigi Pistaferri. (2011). "Earnings, Consumption and Life Cycle Choices," In: Orley Ashenfelter and David Card, eds., Handbook of Labor Economics, Vol. 4, Part B. Amsterdam: Elsevier. pp. 773-854.
       • Handout for Meghir and Pistaferri (2011), Part 2: Income Processes.
   • Executive Pay
     • Bertrand, Marianne. (2009). "CEOs" Annual Review of Economics, 1(1): 121-150.
       • Handout for Bertrand (2009).
     • Kaplan, Steven N., (2013). "CEO Pay and Corporate Governance in the U.S.: Perceptions, Facts, and Challenges." Journal of Applied Corporate Finance, 25(2): 8-25.
       • Handout: Kaplan, Steven N. (2015). "Are U.S. CEOs Overpaid?"
     • Kaplan, Steven N., and Joshua Rauh. 2013. "It's the Market: The Broad-Based Rise in the Return to Top Talent." Journal of Economic Perspectives, 27(3): 35-56.
       • Handout for Kaplan and Rauh (2015).
   • Measuring Real Income Inequality
     • Handout for Meghir and Pistaferri (2011), Part 1: Relating Income to Consumption.
     • Handout: Moreira, Sara. (2014) "Consumption Inequality: Evidence and Measurement Problems."
     • Armour, Philip, Burkhauser, Richard V., and Larrimore, Jeff. (2013). "Deconstructing Income and Income Inequality Measures: A Cross-Walk from Market Income to Comprehensive Income." American Economic Review, 103(3): 173-177.
       • Handout for Armour, Burkhauser, and Larrimore (2013).
       • Extract from Armour, Burkhauser, and Larrimore (2013).
     • Burkhauser, Richard V., Shuaizhang Feng, Stephen P. Jenkins, and Jeff Larrimore. (2012). "Recent Trends in Top Income Shares in the United States: Reconciling Estimates from March CPS and IRS Tax Return Data." Review of Economics and Statistics, 94(2): 371-388.
       • Tables and Figures for Burkhauser, Feng, Jenkins, et al. (2012).
   • Has Poverty Increased?
     • Jencks, Christopher. (2015). "The War on Poverty: Was It Lost?" New York Review of Books, April 2. 2015.
       • Handout for Jencks (2015).
   • Intergenerational Inequality
     • Corak, Miles. (2013). "Income Inequality, Equality of Opportunity, and Intergenerational Mobility." Journal of Economic Perspectives, 27(3): 79-102.
       • Handout for Corak (2013).
     • Handout: Setzler, Bradley (2014). "Is the Great Gatsby Curve Robust? Comment on Corak (2013)."
     • Handout: Setzler, Bradley (2015). "IGE: The State of the Literature." University of Chicago, Department of Economics.
   • Families
     • Heckman, James J. (2008). "Schools, Skills, and Synapses." Economic Inquiry, 46(3): 289-324.
       • Handout for Heckman (2008).
     • Reardon, Sean F. (2011). "The Widening Academic Acheivement Gap between the Rich and the Poor: New Evidence and Possible Explanations." In Whither Opportunity? Rising Inequality, Schools, and Children's Life Chances, G. Duncan and R. Murnane, eds. New York: Russell Sage Foundation. Chapter 5, pp. 91-116.
       • Handout: Reardon, Sean. (2011). "The Widening Academic Achievement Gap Between the Rich and the Poor: New Evidence and Possible Explanations." Presentation, Stanford University, July, 2011.
     • Putnam, Robert D., Carl B. Frederick, and Kaisa Snellman. (2012). "Growing Class Gaps in Social Connectedness among American Youth, 1975-2009." Unpublished manuscript, Harvard Kennedy School of Government
       • Handout for Putnam, Frederick, and Snellman (2012).
2. Explanations
   • Skills, Skill Bias, and Tasks
     • Acemoglu, Daron and David Autor. (2011). "Skills, Tasks and Technologies: Implications for Employment and Earnings," In: David Card and Orley Ashenfelter, eds., Handbook of Labor Economics, Volume 4, Part B. Amsterdam: Elsevier. pp. 1043-1171.
       • Handout for Acemoglu, Daron and David Autor. (2012). "Skills, Tasks and Technologies: Beyond the Canonical Model." Economics 350, University of Chicago.
     • Handout: Heckman, James J. (2011). "Wage Equations Part 1: Efficiency Units, Elementary Hedonic Models (Gorman and Lancaster) With and Without Bundling Restrictions." 
     • Handout: Heckman, James J. (2015). "The Roy Model and the Generalized Roy Model," Economics 350, Winter 2015, University of Chicago.
     • Handout: Heckman, James J. and Flavio Cunha. (2015). "Schooling and Returns to Schooling Part 4A: Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components." Economics 350, Department of Economics, University of Chicago.
     • Heckman, James J., John Eric Humphries and Greg Veramendi. (2015). "The Causal Effects of Education on Earnings and Health," Under revision, Journal of Political Economy.
       • Handout: Heckman, James J., John Eric Humphries, and Gregory Veramendi. (2015). Presentation given at the Institute for Advanced Research, Shanghai University of Finance and Economics, November, 2015.
     • Heckman, James J. and Tim Kautz. (2012). "Hard Evidence on Soft Skills," IRP Lampman Lecture, Madison, WI, May 16, 2012.
       • Tables and Figures
     • Borghans, Lex, Bart H. H. Golsteyn, James J. Heckman, and John Eric Humphries. (2015). "What Do Grades and Achievement Tests Measure?" Unpublished manuscript, University of Chicago, Department of Economics.
       • Handout for Borghans, et al. (2015).
     • Almlund, Mathilde, Duckworth, Angela Lee, Heckman, James J., and Kautz, Timothy. (2011). "Personality Psychology and Economics," In Handbook of the Economics of Education, E. Hanushek, S. Machin, and S. Woessman, eds. Amsterdam: Elsevier. pp. 1-181.
       • Handout for Almlund, et al. (2011).
     • Borghans, Lex, Angela L. Duckworth, James J. Heckman, and Bas ter Weel. (2008). "The Economics and Psychology of Personality Traits." Journal of Human Resources, 43(3):972-1059.
       • Handout for Borghans, Duckworth, Heckman, and ter Weel (2008),
   • Executive Compensation: Demand for Superstars?
     • Sattinger, Michael. (1979). "Differential Rents and the Distribution of Earnings," Oxford Economic Papers, 31(1): 60-71.
       • Handout: (2007). "Notes on Sattinger's “Differential Rents and the Distribution of Earnings"
     • Gabaix, Xavier and Augustin Landier. (2008). "Why has CEO Pay Increased So Much?" Quarterly Journal of Economics, 123(1): 49-100.
       • Handout for Gabaix and Landier (2008).
   • Supply of Skills
     • Heckman, James J., Lance Lochner, and Christopher Taber. (1998). "Explaining Rising Wage Inequality: Explorations With A Dynamic General Equilibrium Model of Earnings," Review of Economic Dynamics, 1(1): 1-58.
       • Handout for Heckman, Lochner, and Taber (1998).
   • Family Investment and IGE
     • Handout: Heckman, James J. (2015). "The Economics of Family Influence and Inequality." Adapted from Becker and Tomes (1986) and from Becker's lectures. Economics 350, University of Chicago.
     • Cunha, Flavio and James J. Heckman (2007). "The Technology of Skill Formation," American Economic Review, 97(2):31-47.
       • Extract from Cunha and Heckman (2007).
     • Heckman, James J. and Stefano Mosso. (2014). "The Economics of Human Development and Social Mobility." Annual Reviews of Economics, 6: 689-733.
       • Handout: Heckman and Mosso (2014). "The Economics of Human Development and Social Mobility." Economics 350, Winter 2015, University of Chicago.
     • Cunha, Flavio, Irma Elo, and Jennifer Culhane. (2015). "Eliciting Maternal Subjective Expectations about the Technology of Cognitive Skill Formation." Unpublished manuscript, Department of Economics, Rice University.
       • Handout for Cunha, Elo, and Culhane (2015).
3. Policies

• Skill Policies
  • Kautz, Tim and Heckman, James J. and Diris, Ron and ter Weel, Bas and Borghans, Lex. (2014). "Fostering and Measuring Skills: Improving Cognitive and Non- Cognitive Skills to Promote Lifetime Success." Report for the Organisation of Economic Co-operation and Development, Paris.
    • Handout for Kautz, et al. (2014).
  • Elango, Sneha, Jorge Luis García, James J. Heckman, and Andrés Hojman. (2015). "Early Childhood Education," Forthcoming in Economics of Means-Tested Transfer Programs in the United States, Volume 2. Robert A. Moffitt, ed. Chicago: University of Chicago Press.
    • Handout for Elango, García, Heckman, et al. (2015).
  • Handout: García, Jorge Luis and James J. Heckman. (2015). "Parental Responses to High-Quality Interventions." University of Chicago, Department of Economics.
• Does Policy Create Poverty?
  • Moffitt, Robert. (2015). "The Deserving Poor, the Family, and the U.S. Welfare System." Demography, 52(3): 729-749.
    • Handout for Moffitt (2015).
  • Ben-Shalom, Yonatan, Robert Moffitt, and John K. Scholz. (2011). "An Assessment of the Effectivness of Anti-Poverty Policies in the United States." NBER Working Paper No. 17042.
    • Handout for Ben-Shalom, Moffitt, and Scholz (2011).
• Wage Subsidies
  • Nichols, Austin and Jesse, Rothstein. (2015). "The Earned Income Tax Credit (EITC)." National Bureau of Economic Research, Working Paper No. 21211.
    • Handout for Nichols and Rothstein (2015).
• Proposals
  • Aber, Lawrence, Stuart Butler, Sheldon Danziger, Robert Doar, David T. Ellwood, Judith M. Gueron, Jonathan Haidt, Ron Haskins, Harry J. Holzer, Kay Hymowitz, Lawrence Mead, Ronald Mincy, Richard V. Reeves, Michael R. Strain, and Jane Waldfogel. (2015). "Opportunity, Responsibility, and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream." AEI/Brookings Working Group on Poverty and Opportunity Report.
    • Handout for Aber, et al. (2015).