Tuesday, May 8th, 2012 9:38 am

French Labor Policies

Question A: Reducing the minimum retirement age in France from 62 back to age 60, permanently, would reduce long-term French economic growth and substantially raise French debt relative to GDP over time.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question B: France’s overall employment is higher today because of the 35 hour work week than it would be without a limit on weekly hours.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 7
Bio/Vote History
         
Alesina Alberto Alesina Harvard Strongly Agree 10
Bio/Vote History
         
Altonji Joseph Altonji Yale Strongly Agree 9
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 4
Bio/Vote History
         
Autor David Autor MIT Agree 8
Lifespans are getting substantially longer. Working lives must get somewhat longer too to cover the cost of decades-long retirements.
Bio/Vote History
         
Baicker Katherine Baicker Chicago No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 2
Bio/Vote History
         
Chetty Raj Chetty Stanford Agree 6
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 7
Retirement comes with a substantial state pension.
Bio/Vote History
         
Currie Janet Currie Princeton Agree 8
People are living longer healthier lives, which means that retirement ages should be going up not down.
Bio/Vote History
         
Cutler David Cutler Harvard No Opinion
It will lower output and raise debt, but I don't think it will lower growth.
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 8
Bio/Vote History
         
Duffie Darrell Duffie Stanford Strongly Agree 4
This would lower tax revenues, increase retirement benefits, and lower output.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 4
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 5
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Uncertain 5
It seems very likely it would increase debt relative to GDP, I don't know about GDP growth.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 3
The word "substantially" threw me off a bit and perhaps a better answer would be "uncertain."
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Did Not Vote
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Did Not Vote
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 8
Solow explained why a level effect does not affect growth. We don't really know much about debt determination in the longer run.
Bio/Vote History
         
Holmström Bengt Holmström MIT Agree 7
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Strongly Agree 10
Generational accts show that lowering the retirement age would increase future liabilities and thus future tax rates, reducing productivity
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 6
Reducing labor supply surely reduces production and tax revenues.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 5
Lower labor supply reduces growth. Increasing life expectancy makes this expensive, if anything retirement age should be hiked further.
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 7
The long term *level* of GDP and employment would go down in France as a result, I think.
-see background information here
Bio/Vote History
         
Lazear Edward Lazear Stanford Agree 7
France is not in terrible budgetary shape, but this won't help. Whether they finance spending through debt or taxes is a second-order issue
Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Vote
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 6
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 8
Not sure about "substantial" but otherwise clear.
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 8
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 5
Bad GDP effects if across the board reduction from 62 to 60, but if only for a small group which started work at 16, as proposed by Holland
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Agree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 4
Cutting real pension levels or providing serious incentives to delay retirement beyond 60 could mitigate the adverse impact.
Bio/Vote History
         
Shin Hyun Song Shin Princeton Agree 7
Bio/Vote History
         
Stock James Stock Harvard Did Not Vote
Bio/Vote History
         
Stokey Nancy Stokey Chicago Uncertain 7
It would presumbly raise debt/GDP, as pension costs would be higher and tax revenues lower. The effect on LR growth is not at all clear.
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 3
Bio/Vote History
         
Udry Christopher Udry Yale Did Not Vote
Bio/Vote History
         
Zingales Luigi Zingales Chicago Agree 5
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Disagree 7
Bio/Vote History
         
Alesina Alberto Alesina Harvard Strongly Disagree 10
Bio/Vote History
         
Altonji Joseph Altonji Yale Strongly Disagree 7
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Uncertain 4
Bio/Vote History
         
Autor David Autor MIT Disagree 6
Raising employer costs does not create more employment.
Bio/Vote History
         
Baicker Katherine Baicker Chicago No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 2
Bio/Vote History
         
Chetty Raj Chetty Stanford Disagree 7
Bio/Vote History
         
Chevalier Judith Chevalier Yale Disagree 7
Bio/Vote History
         
Currie Janet Currie Princeton Uncertain 7
There are many ways for employers and employees to evade these types of regulations, so the net effect is uncertain.
Bio/Vote History
         
Cutler David Cutler Harvard Disagree 5
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Uncertain 3
There are competing effects on the supply and demand for jobs. Lacking knowledge of the availanble research I can't estimate the net effect.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley No Opinion
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Disagree 5
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Uncertain 6
It depends on so many things, it is impossible to predict.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Uncertain 3
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Did Not Vote
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Did Not Vote
Bio/Vote History
         
Hall Robert Hall Stanford Agree 4
Labor demand determines total hours, so as long as the legal constraint binds, tightening it raises employment.Does not make it a good idea.
Bio/Vote History
         
Holmström Bengt Holmström MIT Agree 7
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Disagree 6
Hard to evaluate this policy empirically because of gen eqm effects. It's based on wrong-headed thinking, though: a fixed employment pie.
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 7
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Disagree 7
Sold on these grounds, but evidence suggested it backfired.
-see background information here
Bio/Vote History
         
Klenow Pete Klenow Stanford Disagree 5 Bio/Vote History
         
Lazear Edward Lazear Stanford Disagree 6
Research suggests that this cost-increasing restriction has not cost France much employment, but not that it is helpful to employment.
Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Vote
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 7
Hours and output effects are clear, but employment effect ambiguous.
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Uncertain 7
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 4
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 6
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Disagree 8
I'm not sure why this policy has ceased to be a joke.
Bio/Vote History
         
Shin Hyun Song Shin Princeton Uncertain 7
Bio/Vote History
         
Stock James Stock Harvard Did Not Vote
Bio/Vote History
         
Stokey Nancy Stokey Chicago Uncertain 1
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 3
Bio/Vote History
         
Udry Christopher Udry Yale Did Not Vote
Bio/Vote History
         
Zingales Luigi Zingales Chicago Agree 2
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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