Through a combination of scholarly research, lectures and workshops, The Hayek Center for the Business of Prosperity is establishing itself as resource for public policy makers.
Showcasing the college’s growing reputation for cutting-edge scholarship and, in particular, the John E. Walker Department of Economics, the Hayek Center hosted a two-day workshop featuring eight rising academic stars from around the country and here at Clemson.
Hayek Center executive director Reed Watson, ’04, a professor of practice in economics, said the inaugural research workshop focused on various policies affecting labor markets, but topics will vary annually.
“The Labor Markets and Public Policy Workshop gave all of us a better understanding of how different policies influence education, employment, earnings, and other features of labor markets,” Watson said. “Often, policies that aim to improve workers’ skills or increase their wages have the opposite effect by limiting the flexibility of workers and firms. It is imperative that we understand how these policies work on the ground because, as we are learning now, labor markets are constantly changing and cannot be planned by a small group of experts.”
This year’s workshop, co-directed by Jorge Garcia, assistant professor of economics, featured research in human capital, pay, performance and productivity and mobility and migration of workers.
“Research workshops like The Hayek Center’s elevates the tide of academics and scholarship for the John E. Walker Department of Economics, the College of Business and the University’s brand,” Garcia said. “The presentations educated the 10 scholars from the economics department who attended but the scholarly discussion that resulted also helped the presenters improve their work.”
Presenting scholars and their research topics included:
-Matthew Johnson, assistant professor, Duke University, Sanford School of Public Policy – “The Labor Market Effects of Legal Restrictions on Worker Mobility.”
This Mobility and Migration research explores how the legal enforceability of non-compete agreements affects job mobility and wages as it varies by state. … The study showed that changes to NCA enforceability cause sizable externalities on workers not directly affected by those changes. Workers facing strict enforceability are unable to leverage tight labor markets to increase their wages.
-Evan Taylor, assistant professor economics, University of Arizona – “Migration and Upward Mobility in the United States: 1940-2018.”
The paper examines migration movements and upward mobility rates across the United States using census data from 1940-2018. The paper tries to answer the question of which states have the highest human capital.
-Natalie Bau, assistant professor of public policy at the UCLA Luskin School of Public Affairs- University of California, Los Angeles – “Affirmative Action and Pre-College Human Capital.”
This Human Capital study examines whether race-based affirmative action policy affects students even before they reach college. … The results showed gains for underrepresented minority students and reductions in the racial achievement gap.
-Chris Walters, associate professor of Economics, University of California, Berkeley – “Can Successful Schools Replicate? Scaling Up Boston’s Charter School Sector.”
The Human Capital study questioned whether schools that boost student outcomes could reproduce their success at new campuses. … The research studied policy reform in Boston that allowed successful charter schools to replicate new campuses after a new law allowed for additional charter schools. The average effectiveness of Boston’s charter middle school sector increased after the reform.
“The Hayek Center workshop was beneficial to me because it brought together early-career scholars working on a variety of labor market topics,” Walters said. “The format allowed us to engage deeply with the research and one another.”
-John D. Singleton, assistant professor of Economics, University of Rochester – “Valuing School Choice: Using a Randomized Experiment to Validate Welfare Evaluation of Private School Vouchers.”
The research examined the welfare impact of private school vouchers in rural India. … The study showed vouchers were not as important to school choices as proximity and idiosyncratic preferences. Also, private school seemed to outperform other schools leading researchers to believe vouchers could be a
-Evan Riehl, assistant professor of Economics, Cornell University – “Risks and Rewards: The Ex Ante Returns to Stem Programs.”
The Human Capital study questioned whether there were returns from STEM programs, even if you are only admitted to a STEM program, but don’t graduate. … The research showed that lower-ability students were less likely to complete the STEM programs, but they have larger ex ante gains 15 years later.
-Aspen Gorry, assistant professor of Economics, Clemson University – “The Million Dollar Rule, Executive Compensation, and Managerial Risk-Taking.”
A Pay, Performance and Productivity study, researchers questioned if executive compensation rules affect risk-taking on behalf of companies. … The variations in CEO compensation structures were analyzed against stock volatility, R&D investment, etc., and found higher sensitivity of CEO wealth to stock volatility generates an increase in R&D, reductions in business segments and an increase in idiosyncratic firm risk.
-Enghin Atalay, Federal Reserve Bank of Philadelphia – “Emerging and Disappearing Work, Thriving and Declining Firms.”
Also, a Pay Performance and Productivity study, researchers analyzed how differing job titles for similar roles affect companies’ life cycles and workers earnings by company. … Millions of vacancy postings in newspapers were examined from 1940-2000. The study found that firms that posted ads for emerging work tend to be much younger, more R&D intensive and have higher future sales growth.
Watson said the labor markets research workshop was central to the Hayek Center’s mission of presenting cutting-edge research.
“Through workshops like this, we can be a contributor to better public policy. We have the skills to understand complicated topics and want public policy to be informed by solid, economic scholarship. The research that was presented was central to the Hayek Center’s mission of bringing forth research that let the data speak on the labor markets.”
About the Hayek Center for the Business of Prosperity
Founded in 2018, The Hayek Center for the Business of Prosperity is housed in the College of Business at Clemson University. Through a combination of scholarly research and undergraduate education, the Hayek Center examines the fundamental purpose of business and how it impacts society and those who choose careers in business-related fields. The Hayek Center is funded by private gifts and is named for Nobel Prize winning economist Friedrich Hayek.
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