Honorary Degree Ceremony for Professor Orley Ashenfelter

Orley Ashenfelter received an honorary degree from Charles University on January 15th, 2014 in Prague. Professor Ashenfelter (Princeton University), who is a former member of the CERGE-EI Executive and Supervisory Committee and a current member of the CERGE-EI Foundation Board of Directors, has been a long-time supporter of CERGE-EI. He is also one of the leading economists of our time.

JUSTIFICATION OF THE AWARD

Professor Ashenfelter is widely regarded as the originator of the use of so-called natural experiments to infer causality about economic relationships. Many important social science questions seemed impossible to answer due to absence of both necessary data and convincing econometric techniques. Professor Ashenfelter pioneered innovative formulations and empirical testing of economic hypotheses and creative data collection. The methods he introduced are used in all social sciences today. He has also helped to transform our views of the labor market as he has made major advances in the study of wage structure, trade unions, labor supply, discrimination, and education and retraining.
Professor Ashenfelter’s numerous honors and awards include the Karel Englis Honorary Medal of the Academy of Science of the Czech Republic, the Jacob Mincer Award of the Society of Labor Economists, the IZA Prize in Labor Economics, and the Ragnar Frisch Prize of the Econometric Society. In 2005, he was named a Corresponding Fellow of the Royal Society of Edinburgh, and in 1977 he was named a Fellow of the Econometric Society. He received the degree of Doctor Honoris Causa from the University of Brussels in 2002.

Selected publications:

  • Bargaining Theory, Trade Unions, and Industrial Strike Activity. American Economic Review, 1969
  • American Trade Union Growth: 1900-1960. Quarterly Journal of Economics, 1969
  • Unionism, Relative Wages, and Labor Quality in US Manufacturing. International Economic Review, 1972
  • Estimation of Income and Substitution Effects in a Model of Family Labor Supply. Econometrica, 1974
  • Estimating the Effect of Training Programs on Earnings. Review of Economics and Statistics, 1978
  • Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs. Review of Economics and Statistics,1985
  • Estimates of the Economic Returns to Schooling from a New Sample of Twins. American Economic Review, 1994
  • Using Mandated Speed Limits to Measure the Value of a Statistical Life. Journal of Political Economy, 2004

Cooperation with Charles University:

Since the early 1990s, Professor Ashenfelter has actively participated in the process of restoration of doctoral education and research in economics in the Czech Republic and more broadly in Central and Eastern Europe. Since 1999 he has served on the Board of Directors of the CERGE-EI Foundation, which aims to foster economics education in the region and which supports the doctoral program in economics at CERGE-EI, the joint workplace of the Center for Economic Research and Graduate Education (CERGE) of Charles University, Prague, and of the Economics Institute (EI) of the Academy of Sciences of the Czech Republic. Between 2001 and 2007 he has also been a member of the Executive and Supervisory Committee of CERGE-EI, an academic supervisory body charged with supporting the quality of research and education at the joint workplace. During his regular visits to Prague, he has provided long-term support and valuable advice to students and faculty alike, and he has also helped the development efforts at the CERGE-EI library, which serves not only the CERGE-EI community, but also an equally large group of researchers from the Faculty of Social Sciences of Charles University. He has also played an active and successful role in the CERGE-EI Foundation’s efforts to raise funds from sponsors to support economics education including student mobility or stipends as well as economics research in the region.

Justification:
Professor Ashenfelter has had a major influence on economics research, particularly in the area of impact measurement of social programs, but also in the general study of labor markets. He has pioneered the method of “natural experiments” widely used today to uncover causal relationships in social sciences. It was his indisputable scientific contribution together with his long-standing support of research on transition economics and of economics education at Charles University, where he has helped to grow a new generation of economists, that has led the Scientific Council of the Faculty of Social Sciences to submit a proposal to award him an Honorary Doctorate of Charles University in Prague.

LAUDATIO BY THE DEAN OF THE FACULTY OF SOCIAL SCIENCES

There is no doubt that Professor Ashenfelter is among today’s leading economists. His work has had an enormous influence on the choice of topics in labor economics and on empirical research methods in all of economics and social sciences. He is the editor or co-editor of over ten books and the author of one hundred articles in prestigious scientific journals, which were cited over three thousand times in the Web of Science. During his career, he was the editor of several economics journals. The most important of these is the American Economic Review, where Professor Ashenfelter served as editor for sixteen years (a historic record), thus helping to shape the landscape of modern economics. He is also the co-founder and long-term former co-editor of the American Law and Economics Review.
At the beginning of his research career, Professor Ashenfelter focused on the quantitative analysis of trade unions, including his work on strikes or the contribution of trade unions to a rise in the relative wages of African-American men. His early work also included analyses of labor supply determinants and of income maintenance programs. At the beginning of the 1970s, he spent one year as Director of the Office of Evaluation of the US Department of Labor and it was here that he laid the foundations for the development of what is now widely recognized as the separate field of quantitative social program evaluation. The rigorous methods he developed for the quantitative econometric evaluation of federally funded job retraining and other social programs included the use of randomized trials and longitudinal program evaluation methods. In his 1978 paper, he introduced the now often called “difference-in-differences” method, which today is among the most widely used identification strategies in social sciences.
His other major contributions to modern economics consist of his innovative formulation of economic hypotheses and creative individual-level data collection techniques. Professor Ashenfelter is regarded as the originator of the use of so-called natural experiments to infer causality about economic relationships. Many economic and social-science questions seemed almost impossible to answer due to absence of data and useful estimation techniques. As an example of how he filled in such gaps in research, consider his use of twins to control for genetic factors that may confound the estimation of the payoff to schooling. He has also used such experimental approaches to estimate the impact of arbitration statutes on wages, the end of mandatory retirement rules on the retirement decisions of faculty, and the effects of many other public policies on the labor market.

Professor Ashenfelter helped shape the development of labor economics not only as a long-serving editor of important journals, but also by educating several generations of outstanding empirical labor economists, including Jan Svejnar, the founder of CERGE at Charles University. At CERGE-EI, Professor Ashenfelter has also focused his many years of support for economics education in research in post-soviet countries, both through his participation on the Executive and Supervisory Committee of CERGE-EI, and through his help with seeking financial support for students of economics or for the availability of international research publications at Charles University.
In recent years, Professor Ashenfelter continues his research in labor economics, for example a recent project where he is collecting data on wage rates of workers at McDonald’s restaurants around the world, thus generating a simple convincing measure of comparable wage rates across countries. But he also works on non-labor topics, including, for example, the study of wine prices and quality determinants or an analysis of the famous ‘Judgement of Paris.’

Professor Ashenfelter has had major influence on how we view labor markets. In his research, he laid foundations of several sub-fields of labor economics. Credibility and reliability were and still are crucial aspects of his work, as only such methods can lead to the social consensus that is necessary for actually improving the efficiency of social programs.

Professor Ashenfelter has been repeatedly recognized as a leading figure of science. He served as the president of the American Economic Association two years ago, in 2005 he was named a Corresponding Fellow of the Royal Society of Edinburgh, and in 1977 he was named a Fellow of the Econometric Society. He received the degree of Doctor Honoris Causa from the University of Brussels in 2002. In the Czech Republic, he received the Karel Englis Honorary Medal of the Academy of Science of the Czech Republic in 2007 and today, he joins another member of the CERGE supervisory board, Professor Joseph Stiglitz, in receiving the honorary doctorate of Charles University.

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