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This final chapter sums up the analysis of Jacob Mincer's prolific and interesting career. It also highlights the hallmarks of Mincer's approach to economic analysis. It points out his major contributions to economic analysis and suggests the topics and features by which his work will continue to influence future generations of (labor) economists.

One of the contributions of this book is to use and develop the principles of modern public finance for the analysis of LDCs (less developed countries). This is done by borrowing from two intellectual traditions: that relating to public finance, and that relating to development economics. This chapter briefly reviews the four major strands in public finance literature that form the background to the study. These are: general-equilibrium analysis; Pigouvian welfare economics and optimal taxation; the New Welfare Economics (which says that interpersonal utility comparisons are not meaningful, so the utilitarian approach to adding up utilities is nonsense, and one allocation can only be said to be better than another when the first was a Pareto-improvement over the second); and the New New Welfare Economics, which borrows from the previous three strands, and seeks to analyse the scope of available tax instruments, and to take into account and explain market imperfections. This last approach is the one mainly used in the book to approach applied welfare economics for LDCs; various aspects of the approach are discussed.

This chapter presents the results of interviews with over forty applied economists about the ethical challenges they face as they attempt to render their professional services with integrity. The chapter identifies and examines all of the following issues: the need for the economist to serve as a partisan rather than as a neutral technician; time and resource constraints that undermine the quality of economic analysis; institutional pressures to generate biased work; market pressures to provide the client with the outcome s/he seeks; bureaucratic inertia in the institutions where economists work; guru worship and group think; the pressure to speak for one’s institution rather than to speak truthfully; the revolving door and the associated pressure to curry favor; and the many challenges associated with economic social engineering.

The chapter begins with a discussion of the status of bridge principles in empirical analyses in which the data generating process does not appear. Then it contrasts the ideas of encompassing and congruence in present-day econometrics and formal econometrics, and explicates how the notions of encompassing and congruence can be used to determine the status of bridge principles in formal econometrics. The chapter concludes with a discussion of present-day and formal econometric prescriptions for the use of theory in the book’s case studies, and with a commentary on three problematic aspects of present-day econometric methodology. The results of a case study with the methods of present-day econometrics differ from the results which the same case study yields with the methods of formal econometrics. The chapter attributes the differences to the respective researchers’ different understanding of theory, and describes how a researcher’s understanding of theory affects the inference about social reality that he can draw from statistical analyses. The three methodological problems concern analysis of positively valued time series, empirical irrelevance of qualitative response models, and the search for theoretically meaningful cointegrating relations. The discussion suggests solutions to problems and good reasons for concern about a misguided search for cointegrating relations.

This chapter evaluates technocracy in France. The Ecole Polytechnique, a product of the French Revolution, is often taken to epitomize technocratic culture in France. Polytechnique, with its emphasis on mathematics and science, was central to the invention of the modern engineer. Quite unlike its imitators, it educated the highest stratum of elites. Where else has administrative power been so closely allied to technical knowledge? This alliance helps to explain the French tradition of what would now be called applied economics. The chapter then focuses on economic calculation in action. Accounting means, among other things, placing monetary values on goods and services that contribute to production or sales but cannot themselves be readily exchanged in the marketplace. Nineteenth-century French engineers went one step further, attempting an analysis of the (often unpriced) benefits of public goods to balance against their monetary cost. In this context, values had to be placed on objects, services, and relationships for which there was no proper market, or whose prices could give no adequate measure of their value to users. This “cost–benefit analysis,” to introduce the anachronistic term, remains an elaborate form of accounting.

This book is about strategies, products, and public policies that will help retiring middle-class workers and retired middle-class households to maximize their incomes and reduce their risks. Although it employs a scholarly style, the book is simply applied economics; it presents practical advice and ideas based on empirical investigations and analyses, in contrast to abstract theory and highly technical methodology. The collected works in the book span several years, so it represents an evolving yet consistent viewpoint. The following sections provide a description of two insurance vehicles that can be used to address or prevent two of the major financial risks facing retired households—life annuities and long-term care insurance—for the extra costs arising from the realization of longevity and disability risks, respectively.