Kahn’s Curiosity about Workers Led to Career

What motivated you to study labor economics?

I think it was the social ferment affecting the world in the late 1960s and early 1970s that led me to study why some workers were in low-wage, dead-end jobs while others thrived. I thought that the labor market would be crucial in understanding race and gender differences in economic outcomes.

What led to you becoming a professor?

Again, during the upheavals of the late 1960s and early 1970s, many people at the University of Michigan, where I was an undergraduate, were predicting that the economy was going to collapse into a spiral of high unemployment and high inflation. I wanted to know if this was going to happen, and the first step in finding out was to learn how to do research and to study data to determine what was true and what wasn’t.

I had a summer job at the University of Michigan’s Institute for Social Research, helping prepare the Panel Study of Income Dynamics (a database that follows families and records information about their incomes and important demographic information) for use by researchers, so I was familiar with this important source of data that yielded insights about poverty and living standards.

So, wanting to do research and being familiar with data led me to graduate school in economics at the University of California, Berkeley. Having the freedom to do research on topics I was interested in, as well as teaching this material to students, led naturally to an academic career.

What are the defining moments of your career?

I would say that the first moment was a course on macro and microeconomics taught by Professor Frank Stafford at the University of Michigan in 1970. This class kindled my interest in economics, and I probably learned more in that class than in any other class since then.

Being accepted by and attending the University of California, Berkeley, graduate school in economics was an important milestone. There, I received the technical training that prepared me to conduct research and also to teach forefront-level economics. In addition, at Berkeley, my interest in inequality in the labor market led me to Professor Lloyd Ulman’s year-long sequence in labor economics, which gave the substantive background to do labor market research.

Getting my first job as an assistant professor of economics and labor and industrial relations at the University of Illinois at Urbana-Champaign was a key moment. There, I began my career and, most importantly, met Francine Blau, who was also an assistant professor of economics and labor and industrial relations. Things progressed, and we got married and had our two children there. Professionally, we had our own streams of research, but found that we were interested in labor market inequality as well as labor market institutions. This interest led us to a long-time research collaboration that continues to this day.

After I had been at Illinois for 18 years, Cornell came calling. The ILR School invited Fran and me for recruiting visits in September 1993. A couple of months later came the single most important moment in my career, which was Dean David Lipsky’s phone call offering Fran and me jobs at Cornell. At the same time, the school offered me the associate editorship of the Industrial & Labor Relations Review, now called the ILR Review. This is a leading journal in the industrial relations/labor economics field, and the offer, which came from Acting Dean Robert Smith, was a great moment for me.

I continued as associate editor until 2011, when Dean Harry Katz offered me the co-editorship of the journal. The ILR School’s commitment of resources to support the ILR Review shows that the journal is an integral part of the ILR School’s culture. In addition to being a great honor, the co-editorship has allowed me to help shape labor economics research through special policy issues of the journal and through my editorial and research design input into those submitted manuscripts that we eventually publish.

Finally, also in 2011, Dean Harry Katz appointed me to the inaugural Braunstein Family Professorship in Industrial and Labor Relations (see below).

What was it like to be named the school’s first Braunstein Family Professor?

I was and am incredibly proud and humbled to be given this honor. The process has led me to a long-term friendship with Doug Braunstein, with whom I have shared my experiences in research and teaching. The chair carries released time and a budget for a research assistant and research expenses. It has greatly facilitated my research and also led to some extremely productive collaborations with the graduate students I have hired and who have become my coauthors on projects that continued after they left Cornell.

What do you consider your most impactful research, and why?

Judging by citations, my work with Fran on the extent, trends and explanations for changes in the US gender pay gap has impacted the most researchers. This paper was published in a peer-review journal of the American Economic Association (Francine D. Blau and Lawrence M. Kahn, “The Gender Wage Gap: Extent, Trends, and Explanations,” Journal of Economic Literature,” September 2017, pp. 789-865). It was used as an authority in an April 9, 2018, United States Federal Court Appeals for the Ninth Circuit decision regarding the Equal Pay Act. The ILR School website posted a story regarding the case and how the court used our research. At issue was the question of whether an employer is allowed to use a worker’s past salary history as a guide for making job offers, and the court used our research findings to conclude that to allow this could perpetuate past gender-based discrimination.

Is there a piece of research that maybe didn’t get the same notoriety, but was particularly meaningful to you, or that you thought was really interesting, or maybe surprised you?

I had always been a sports fan and participant in sports (tennis), and in 1985, data on National Basketball Association salaries became publicly available. A colleague of mine at Illinois, Professor Peter Sherer, and I were basketball fans and were keenly aware of the racial composition of the NBA, which was and is roughly 70-80% African American. We wondered if there was equal pay for equal work in the NBA. Using the salary data, supplemented by information on individual players’ performance, work history and race, we were able to answer this question.

We found that even though Black and white players on average earned about the same salaries in the 1985-86 season, when we used statistical methods to control for performance, experience and market characteristics, there was a consistent 20% Black player salary shortfall that was highly statistically significant. This was a startling finding, especially given that Black and white players earned about the same average salaries. This paper (Lawrence M. Kahn and Peter D. Sherer, "Racial Differences in Professional Basketball Players' Compensation,” Journal of Labor Economics, 6, No. 1 (January 1988): 40-61) led me to study other aspects of sports economics such as sports and antitrust laws, the effects of free agency and rival leagues (such as the American Basketball Association) on player salaries, the impact of coaching on team success, and racial differences in coaches’ salaries.

How did you grow/change as a teacher?

Over the course of my career, economics has become a much more empirical field. This change has led my graduate teaching to become much more empirically oriented and devoted to teaching students state-of-the-art empirical research methods. These methods have evolved over the years, and part of my preparation as both a teacher and a researcher has been to learn new methods as they are devised.

At the undergraduate level, because of my research on sports economics, Dean David Lipsky asked me when I accepted Cornell’s offer in 1994 whether I would be willing to teach a course in sports economics. I jumped at the opportunity and have been teaching ILRLR 4030/Econ 3460: The Economics of Collective Bargaining in Sports since 1995. This course has led me into areas of economics beyond labor markets, such as finance and accounting, public finance, and anti-trust law and industrial organization. Teaching this class has thus broadened my perspective as an economist (more on this class below).

What was it like to work side-by-side with Fran? How did you navigate your professional relationship while raising a family?

The collaboration has been wonderful in all dimensions. As I noted, we began our careers establishing our own identities as researchers but discovered that we had similar interests. We have much more collaboration outside of the office than most coauthors have, and this has led to significant improvements in the final products. We shared child care duties and were lucky to have a great child care center run by the University of Illinois when our children were little. Living in college towns has been great for combining work and family because our commute has never been more than about eight minutes. I could, for example, attend our son’s first-grade play at 9 a.m. and still get to the office in time to teach my 10 a.m. class!

What are some of your most memorable ILR moments?

I have had some great moments teaching my sports class. Perhaps 1,500 students have taken this class, and many have gone on to high-level careers in the sports business. The highlight of the class is a Major League Baseball salary arbitration project in which the students form groups and choose a player who filed for salary arbitration in the current season. The group then must write and present a report to the class, making a decision about whose offer should be accepted, the team’s or the player’s, since salary arbitration in baseball is of the final offer variety. One student had job interviews with two Major League Baseball teams, one of which was very interested in seeing his report. He got the job offer! In addition, some of my students have gone to law school after graduating ILR and are now doing baseball salary arbitration. They have returned to Cornell and spoke to my class about their experiences, which has led to some great moments and questions.

What’s on your retirement “things to do” list?

I will remain professionally active and will continue my research projects. However, we will be spending much more time with our six grandchildren, three in the Rochester, New York, area, and three in the Boston area. I am also looking forward to traveling during times that academics usually can’t because of class schedules.

Is there something in particular about ILR that you will miss?

I will miss my colleagues and students especially.

As you head into retirement, what are some of your thoughts about the career you’ve had, and the legacy you’re leaving at both ILR and in your field?

When I first came to Cornell, Professor Ron Ehrenberg told me that Cornell does much more for one than one can do for Cornell. I wholeheartedly agree with this sentiment. The highlight of my career has been to be a Cornell professor in the ILR School. This is the leading school of its kind. Cornell is a wonderful place to be a labor economist, since we are very deep in this field, both inside the ILR School and around campus. This environment and great support that the school has given me has allowed to me produce some influential research as well as to design courses that fit my own and the students’ interests.

Is there something you’d like to reflect upon that we didn’t ask about?

With the large cohort of faculty retiring from Cornell, there has been tremendous turnover. In economics and in the other fields at the ILR School, we have been very fortunate to hire some great faculty in recent years, some at the assistant professor level and some at the senior scholar level. I feel really good about the direction of the school and the Economics Department, which I can see will be in good hands as we retire.