Using the March Current Population Surveys and the 1960 census, this article describes earnings and employment changes for married couples in different types of households stratified by the husband's hourly wage. While declines in male employment and earnings have been greatest for low-wage men, employment and earnings gains have been largest for wives of middle- and high-wage men. These findings cast doubt on the notion that married women have increased their labor supply in the recent decades to compensate for the disappointing earnings growth of their husbands.

The "human capital earnings function," in which earnings are expressed as a quadratic in potential experience, is probably the most widely accepted empirical specification in economics. In spite of its widespread acceptance, the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience. The standard formulation understates early career earnings growth by about 30%-50% and overstates midcareer growth by 20%-50%. However, simple alternative specifications that fit the data are available.

This paper looks at the work of Gary S. Becker, American economist, professor of sociology, friend, and colleague of Kevin M. Murphy. Murphy discusses the traditional approach of Becker's teaching and ideas as they were expressed through his wealth of content and style in course design; his discussions on the role of preferences, technology, and constraints as they influence household production; and his emphasis on the importance of markets and desire for more. Murphy recognizes Becker's teaching style as groundbreaking, unapologetic, and pure economics.

We treat rising inequality as an equilibrium outcome in which human capital investment fails to keep pace with rising demand for skills. Investment affects skill supply and prices on three margins: the type of human capital in which to invest, how much to acquire, and the intensity of use. The latter two represent the intensive margins of human capital acquisition and utilization. These choices are substitutes for the creation of new skilled workers, yet they are complementary with each other, magnifying inequality. When skill-biased technical change drives economic growth, greater inequality reduces growth.

We estimate how 1970–90 changes in an outcome‐based measure of school quality (state average test scores) affected changes in earnings for those leaving high school to enter a state’s labor force. We find that a one standard deviation deterioration in a state’s relative test score performance is associated with a 3% (or .5 SD) reduction in average wages of young entrants to the labor force. We also find a similar decline in college matriculation. There is weak evidence that the school quality effect on earnings diminishes as labor force entrants acquire experience.

We define national security (NS) as public policies that protect the safety or welfare of a nation's citizens from substantial threats. NS capital provides societal insurance against widespread harm or catastrophe, so optimal NS investments may have very low expected rates of return. Investment targeted at extreme events (war) has spillovers, reducing potential harm in less threatening situations as well. Potential threats are highly uncertain, which raises the value of ex-post scalability of NS technologies. Higher probabilities of extreme events raise the demand for flexibility, so ex-post responses to threats are more elastic, but may reduce current precaution.

Murphy and Topel (2006, henceforth MT) develop methods for valuing health improvements based on individuals’ willingness to pay. Our results indicate that past health improvements have been enormously valuable. We estimate that gains in life expectancy over the twentieth century were worth more than $1.2 million per person to the current US population, and that rising longevity added about $3.2 trillion per year to national wealth between 1970 and 2000, as mortality rates among older adults fell sharply. Looking ahead, we estimate that even modest progress against major lifethreatening diseases would be extremely valuable. For example, the two most prominent causes of disease-related mortality in the United States are cardiovascular diseases (CVD) and cancer. We find that a permanent 10 percent reduction in mortality rates from CVD would be worth about $5.7 trillion to current and future Americans, while similar progress against cancer would be worth $4.7 trillion. A 10 percent reduction in overall mortality would be worth about $18 trillion. If past progress is an indication, there is little doubt that these or greater gains will eventually be realized. The questions are when and at what cost? In comparison to these prospective benefits of health progress, expenditures on basic and applied health research in the United States are modest. Public support for basic biomedical research—mainly through the National Institutes of Health (NIH) and associated grants to research universities—totals about $28 billion annually. Adding expenditures on health research and development (R&D) by private institutions and by pharmaceutical and medical products companies brings the total for basic and applied health research to about $60 billion Social Value and the Speed of Innovation

We develop a framework for valuing improvements in health and apply it to past and prospective reductions in mortality in the United States. We calculate social values of (i) increased longevity over the twentieth century, (ii) progress against various diseases after 1970, and (iii) potential future progress against major diseases. Cumulative gains in life expectancy after 1900 were worth over $1.2 million to the representative American in 2000, whereas post-1970 gains added about $3.2 trillion per year to national wealth, equal to about half of GDP. Potential gains from future health improvements are also large; for example, a 1 percent reduction in cancer mortality would be worth $500 billion.

The authors develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time. Strong addiction to a good requires a big effect of past consumption of the good on current consumption. Such powerful complementarities cause some steady states to be unstable. They are an important part of the authors' analysis be-cause even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention. Their theory also impies that "cold turkey" is used to end strong addictions, that addicts often go on binges, that addicts respond more to permanent than to temporary changes in prices of addictive goods, and that anxiety and tensions can precipitate an addiction.

Using data from the March Current Population Survey, the authors document an increase over the past 30 years in wage inequality for males. Between 1963 and 1989, real average weekly wages for the least skilled workers declined by about 5 percent, whereas wages for the most skilled workers rose by about 40 percent. The authors find that the trend toward increased wage inequality is apparent within narrowly defined education and labor market experience groups. Their interpretation is that much of the increase in wage inequality fro males over the last 20 years is due to increased returns to the components of skill other than years of schooling and years of labor market experience.