- Finally, because the science and engineering labor market holds special interest to me, I've always been interested in the compensating wage differentials literature - a factor that I think for obvious reasons plays a huge role in this market. I was reading some of Einstein's essays last night, and I came across this great passage that really highlights why compensating differentials are so important when we think about scientists. He writes:
"The most important motive for work in the school and in life is the pleasure in work, pleasure in its result and the knowledge of the value of the result to the community." (from "On Education", 1936)
I (obviously) think one of the chief determinants of work is the monetary compensation received for that work and the marginal productivity that firms get out of purchasing labor. Einstein has not swayed me from this view. But I strongly agree with Einstein that that is not the full extent of our relationship with work, and in scientific jobs particularly, there are often motives much broader than earning an income that have to be considered.
Those are some scattered thoughts - I've been thinking about the STEM labor market recently because I'm getting ready to write an application for an IHS fellowship discussing the market for scientific labor. As I've said before - the market works. There's no real evidence of doomsday shortages. There are all kinds of interesting dynamics and adjustment processes in this specialized labor market - and lots of implications for growth and sustainability in general. There's lots of fascinating stuff for an economist to talk about. But the sky-is-falling mentality that a lot of people have is simply not justified.