One such topic is that of savings. Contrasting beliefs that New Zealand has a household savings crisis, that inadequate retirement incomes would result from a rapidly aging population, that weak savings records have caused New Zealand to lag behind other developed countries, and that raising levels of savings would deepen domestic capital markets and boost economic growth, have made savings one of the most contentious recent political economic issues in this country. Through research and communication, the recipient of the Award has challenged these beliefs. In doing so, he has significantly advanced the understanding of academics, advisers, the public and students, of savings behaviour, the levels and composition of private wealth, and the adequacy of expected retirement incomes of New Zealand households.
The recipient of the Award has also undertaken substantial research on the education, labour market positions, and wealth of disadvantaged groups in New Zealand. His work on inequalities in income and wealth between Maori and Pakeha, and between migrants and locally born people, on training and job security for ethnic minorities, on Maori educational attainment, and on returns to schooling for Maori, sheds important light on the socio-economic positions of Maori and Pacific peoples.
A hallmark of the recipient’s work has been a willingness to generate new survey data, tirelessly and innovatively, where he has thought this necessary in order to answer empirical questions for which the existing data were inadequate.
This approach to his work has brought about a third major contribution from the recipient. Students at all levels, but particularly graduate research students, and academic colleagues, have learnt from him how vital it is, in economics just as in other fields, to concentrate on meaningful questions, to gather reliable and apposite empirical data, to analyse those data critically and rigorously, and then to disseminate those analyses through channels that will advance understanding of the issues, and inform debate on them. His students, in adopting that approach, are excellently equipped to contribute to New Zealand, and to other societies, in economics and in related fields.
From his acceptance speech;
Looking back, I also had the good fortune to work for the Agriculture Department in Papua New Guinea in the time between my Masters and PhD. Not only did I meet my wife there, I also managed to raise the ire of the Secretary of Agriculture, who was a former politician who ultimately became the PNG ambassador to the UN.
He took issue with research I had done showing that it was far better for Papua New Guinea to trade for rice using tree crops than to try to produce rice in some self-sufficiency effort. After cancelling my contract he went to the unusual lengths of taking out a full page advertisement in the national newspaper to say that all advice that I had given was a load of rubbish. Occasionally I think that Dr Cullen implies as much when he is dismissing my research on household savings with Grant and Trinh, but he has never gone to quite these lengths.
One silver lining of this was that the main private sector sponsor of research, a group not unlike the Business Roundtable, figured that I must be saying something sensible to warrant such venom. So they promptly hired me for two summers of work on food policy in PNG which lead to my working for a year and a half for the World Bank during my PhD, leading a nationwide survey of household living standards. Not many PhD students get million dollar research projects so I was again very lucky.
The second silver lining from this experience was that it provided a lesson that we typically don’t get in graduate school. Economics when applied publicly to currently policy problems is not always welcomed by either the incumbent elites or some of the vested interests. Such groups might occasionally resort to the odd media pot shot at the economist willing to publicise the implications of their research.
It is on that theme that I want to turn from the past to the future. It is my impression that as a society we are not getting full value from our university-based economists, in helping to inform public debate on topical matters. There are several reasons for this and at least some of them reflect factors that a group like tonight’s audience can help to overcome. So I want to bring these to your attention.