John Pencavel, Distinguished Fellow 2009

John Pencavel is a leader of the quantitative revolution that defines modern labor economics. Throughout his career he has used precise theoretical reasoning and detailed empirical study to shed new insights into the employment relationship. His early research on trade union growth (“American Trade Union Growth, 1900-1960” in the 1969 Quarterly Journal of Economics, with Orley Ashenfelter) and union influences on aggregate wage determination (“Trade Unions and the Rate of Change of Money Wages in U.S. Manufacturing Industry” in the 1972 Review of Economic Studies, with Ashenfelter and George Johnson) marked a radical departure from the prevailing institutional school, and introduced theoretical tools and econometric methods that now define the field.

In a seminal series of papers a decade later –including his 1981 Journal of Political Economy paper “Wages and Employment Determination Under Trade Unionism: the International Typographer’s Union” (with James Dertouzos) and his 1986 Journal of Political Economy paper “Testing Between Competing Models of Wage and Employment Determination in Unionized Markets” (with Thomas MaCurdy) – Pencavel opened up the formal analysis of trade union objectives using micro econometric techniques. His subsequent work with Ben Craig (including “The Behavior of Worker Cooperatives: the Plywood Companies of the Pacific Northwest” in the 1992 American Economic Review) focused on the unique institution of worker-owned cooperatives. Pencavel’s nuanced view of trade unions’ effects on wages, employment, and hours are summarized in his 1991 book Labor Markets under Trade Unionism: Employment, Wages and Hours.

Pencavel also made major contributions to the study of labor supply, including his 1984 Econometrica paper “Dynamic Hours of Work Functions for Husbands, Wives, and Single Females,” with Terry Johnson) that introduced habit persistence into the choice of hours, and a long series of papers on female work and family labor supply. His landmark Handbook of Labor Economics chapter “Labor Supply of Men: A Survey” has been required reading for generations of Ph.D. students.

In addition to his research contributions, Pencavel has also been deeply involved in helping to develop the infra-structure for research tools in the economics profession and in the Stanford economics department, where he served as chair with great success. His stewardship of the Journal of Economic Literature for over a decade, and the evolution of its online resource EconLit, has provided valuable resources that are routinely used by economists throughout the world.

John Pencavel’s research exemplifies the highest standards of empirical labor economics. His close attention to institutional detail and theoretical rigor make his work uniquely informative and illuminating.