Tuesday, January 25, 2011

RIP Maxine Udall (girl economist), and some reflections on her last post

I just found out that Dr. Alison Snow Jones, who blogs under the name "Maxine Udall (girl economist)" - with the "(girl economist)" obligatory! - passed away last Monday. I don't know much about her except that she was a fascinating, intelligent, progressive blogger. I'm not even sure why she chose to take the pseudonym. I was turned on to her blog by Mark Thoma, who links to her a lot. I'm sure she'll be missed.

Her last post from last Monday was on microfinance specifically, but more generally on the willingness to work for less if you know you are doing good for the world. I glossed over it at the time - international/development econ isn't my primary interest. But now that I reread it I'm struck by this little insight. I had an "ah ha!" moment last Thursday on a site visit I was on for work that was along the same lines. We were interviewing some workers that had gone through an apprenticeship program for a low wage occupation. With several economists on the team, we had been tackling apprenticeship as a human capital development program. It increased worker productivity, which increased wages. Human capital makes a worker more productive, wages are equal to a worker's marginal product, and workers want higher wages. That's the story.

That's not the story we heard at the site. It was jarring to talk to these people. They went on and on about how proud they were of the accomplishment. They were proud to be recognized for their commitment to the rigors of the apprenticeship program. They took joy from sharing what they learned with their colleagues. When we asked about labor market conditions and wage rates we got some chuckles. Yes - there was a wage progression associated with the apprenticeship and that was great of course. But this was still a low wage job in a sea of other low wage jobs. What really distinguished the whole experience for these apprentices was the prestige and the sense that they were doing good in the world (it was a service job).

This is very important, and it's not entirely foreign to me of course. If I had chosen to do something other than work in a non-profit research organization that focuses on low income working families I certainly could get more money than I do. I choose to work here because I feel like it's important work.

We have good models, but I think it's good to take a step back from them every once in a while. Profit maximization is probably straightforward enough, but the utility maximization of a worker is far more complicated.

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