Professors to Research Entrepreneurship, Minimum Wage Through Haynes Foundation Grants

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With their 2023 Haynes Foundation Faculty Fellowship Awards, Pomona College Economics Professors Fernando Lozano and Emiliano Huet-Vaughn will further their research on two issues key to Southern California's economy: minimum wage increases and entrepreneurship.

This award from the John Randolph Haynes and Dora Haynes Foundation is granted to faculty members at four-year colleges in Southern California and used to support social science research. Up to eight professors are selected a year, and for 2023, four projects were chosen, with each receiving a $16,000 grant. 

"It's a good sign we have people doing really important policy-relevant research and there's an appetite for the scholarship being produced at our college," says Huet-Vaughn, associate professor of economics.

Lozano agrees, saying it is "an honor" to be selected for the same fellowship as Huet-Vaughn, who is "one of the top young public economists in the world." The fact that the Haynes Foundation is funding both "speaks to how economic research at its best can inform policy makers," Lozano adds. "This is the type of research that we are currently doing in economics at Pomona."

Examining the Role of Entrepreneurship in Los Angeles' Economy

One of the many questions to emerge from the COVID-19 pandemic is how cities will rebound from the migration of workers and firms. Lozano aims to answer this through his project, "Entrepreneurship and the Reinvention of the Los Angeles Economy."

This is something policy makers are grappling with across California, as they search for ways to reverse the trend. Here, "the popular perception is that workers and firms are leaving the state's largest cities in favor of smaller cities out of state. Yet, we know that historically, cities that can transform themselves succeed in the long run," Lozano, the Morris B. and Gladys S. Pendleton Professor of Economics, says. "I believe that entrepreneurship is the driving force that allows cities to transform themselves, and Los Angeles has historically been an incubator of entrepreneurial talent."

The area's success depends on its ability to "continue fostering entrepreneurs, generating ideas and promoting new firms," Lozano adds, and his research will explore what are the conditions, in terms of industry composition, for entrepreneurship to thrive in the region.

A member of Gov. Gavin Newsom's Council of Economic Advisors and the Inland Empire Economic Partnership, Lozano says this research will inform his perspectives and is also "very symbiotic" to the Urban Economics course he will teach during the fall semester. He also aims to produce a manuscript for publication in an academic journal.

Looking at Minimum Wage Through a Different Lens

For his project, "When and How Much Do SoCal Firms Pass on Costs to Consumers: Learning From Local Minimum Wage Increases," Huet-Vaughn will shift away from the more traditional approach of looking at the employment effect of the minimum wage and instead focus on a less studied area: whether companies are charging consumers more for items in order to offset the cost of a higher minimum wage.

Huet-Vaughn finds analyzing the minimum wage as a redistributive tool and studying the different consequences of alternative policies intriguing, and this fellowship allows him to build on "a longstanding interest in minimum wage policy," he says.

With inflation and rapid price changes affecting everyone, this is timely and topical research, especially in California, where many counties and cities have their own minimum wage laws and are not bound by state or federal minimum wages. "As a researcher juggling various possible ideas, you sometimes consider what is most relevant for the moment you are in," Huet-Vaughn says. "With a lot of focus now on inflation spiking in the last couple of years, it does feel like this is something that's important and could inform policy-makers."

Once his research is completed, Huet-Vaughn would like to turn the results into an academic journal article and a report that is more digestible for the policy community. "Within minimum wage literature, I think there is space for more research on what kind of price pass-through, if any, there is in response to minimum wage laws," he says. "There is room at the frontier for scholarship on that."