Albert Rees

H. Gregg Lewis and the Development of Analytical Labor Economics

As this is written, H. Gregg Lewis has just left the University of Chicago for Duke University after having been at Chicago as a student and a faculty member for more than 40 years. It is an appropriate time to try to record his contribution to the field of analytical labor economics, which is so deeply indebted to him. I use the term analytical labor economics, in contrast to institutional labor economics, to mean the application of economic theory and econometrics to problems of the formation of human capital, the allocation of time between market and nonmarket activities, the allocation of labor among alternative uses, and the compensation of labor. Some of these problems are, of course, also addressed by institutional labor economics. There are, however, clear differences in methodology and scope between the two approaches to the field. The institutional approach has its methodological roots in history, sociology, and the law rather than in economic theory. Indeed, the leading institutional labor economists of the past often stated clearly that in their view the main body of economic theory had little to contribute to the study of labor. In terms of scope, the institutionalists devoted their attention largely to trade unionism and collective bargaining, to labor law, to social insurance, and to personnel management. They devoted relatively little attention to labor supply and to the determination of wages in the nonunion sector. When Lewis began teaching, the institutional approach dominated the field. Today it is still the predominant approach in schools of business and schools of industrial relations, but the analytical approach is predominant in most of the leading departments of economics. No one can rival Lewis in being responsible for this transition. The

Douglas on Wages on the Supply of Labor

From 1918, when his first published article appeared, until his election to the Senate in 1948, Paul H. Douglas was a prolific contributor to economic literature. I shall not attempt to review all of his contributions here. The companion article by Paul Samuelson will cover his contributions to the theory of production, but even in the remaining area, substantial exclusions are necessary. I exclude the work outside of labor economics, such as his work on street railways and on the measurement of consumption, and most of the work that is clearly policy oriented, such as his work on family allowances and unemployment insurance. What remains forms two major contributions to economic science-the first in the theory and measurement of wages and the second in the measurement of labor supply.