BPEA | 1989: Microeconomics

Industry Rents: Evidence and Implications

Lawrence F. Katz and Lawrence H. Summers
Lawrence H. Summers Charles W. Eliot University Professor and President Emeritus - Harvard University
discussants: Charles L. Schultze and
Charles L. Schultze Former Brookings Expert
Robert H. Topel
Robert H. Topel University of Chicago

Microeconomics 1989

THE PAST FEW years have witnessed a renewed interest in the sectoral composition as well as the overall level of the economy’s output. Evidence suggesting that the bulk of employment growth in the United States has occurred in sectors that are thought to provide “low wage, bad jobs” rather than in sectors that provide “high wage, good jobs” is often cited as an argument that U.S. economic performance has been poor in recent years. At the same time, advocates of industrial policies assert that some industries are “better” for a national economy than others and urge that the government manage its influence on the economy to promote growth and competitiveness.