Orley C. Ashenfelter, the Joseph Douglas Green 1895 Professor of Economics, transferred to emeritus status on July 1, 2024, after more than fifty years at Princeton University. Orley is known for his seminal research in labor economics, econometrics, and law and economics. At Princeton, Orley has been central to the direction of the Industrial Relations Section in the Department of Economics and has had a remarkable role as adviser to many graduate students who have become luminaries in their own right, including three Nobel laureates. He is widely celebrated for playing a leading role in the “credibility revolution”—an intellectual transformation that brought economics to a greater level of scientific rigor and robustness. Orley represents the very best of economics, with his combination of insightful theoretical ideas, sharp and innovative empirical work, and commitment to leveraging academic work for the public good.

Orley was born in San Francisco, California, and grew up near San Diego. He received his bachelor of arts from Claremont McKenna College in 1964 and went on to Princeton to complete his Ph.D. under Albert Rees, graduating in 1970. He took an early interest in labor economics and the politics of inequality, writing his dissertation on “Racial Discrimination and Labor Markets.” After the completion of his doctoral studies, Orley remained at Princeton as a professor, where he directed the Industrial Relations Section for over thirty years. Orley also spent time at the U.S. Department of Labor, the University of Bristol, and New York University School of Law. 

Orley’s early work focused on two key aspects of labor markets: unions and human capital. He examined unions not only for their ability to secure gains for workers through bargaining and strikes—such as in his seminal 1969 American Economic Review article (with George Johnson), which provided labor economics with rich new theoretical tools for understanding the wage-setting process—but also for the impact they have on racial inequality. In his 1972 Journal of Political Economy paper, he conducted pioneering data collection and analysis to show that the wage gap between Black and white workers was smaller in the unionized sector, a finding that stands unchallenged to this day.

His research on worker training programs has been foundational to the modern study of human capital. His influential paper “Estimating the Effect of Training Programs on Earnings,” published in the Review of Economics and Statistics in 1978, is remarkable for both its insights into the relationship between worker skill acquisition and wages as well as its econometric innovations, which helped usher economics into the era of “natural experiments.” The new methodologies Orley pioneered to identify causality in real-world economic relationships are now ubiquitous in social science and central to its investigative power. Orley’s work with longitudinal “panel” data and quasi-experimental study designs led him, along with his student and Nobel laureate David Card, to develop the “difference-in-differences” technique, which remains central to all fields of applied economic research to this day. 

In 1982, Orley was awarded the Ragnar Frisch Prize for his 1980 article “Unemployment as Disequilibrium in a Model of Aggregate Labor Supply,” which was published in Econometrica. The paper treats unemployment as a constraint on worker choices and looks at the consequences of one family member’s involuntary unemployment for other members’ consumption and labor supply decisions. The paper is remarkable for integrating the study of labor supply and consumption in one theoretically consistent model and using it to explore the consequences of unemployment insurance. This attention to the theoretical underpinnings of applied work is another hallmark of Orley’s research. Orley continues to publish, offering new insights into topics such as the minimum wage and bargaining power in labor markets.

In addition to his work on labor markets and causal inference in quasi-experimental settings, Orley was central to the birth of modern experimental economics and the field of law and economics. In his 1974 Proceedings of the Industrial Relations Research Association paper, he provided not only the first estimates of the causal effects of training programs on wages but also an early blueprint for the design of randomized field experiments. He cofounded the American Law and Economics Review, which began publication in 1999, with Richard Posner, with whom he served jointly as editor-in-chief until 2005. His contributions to the burgeoning field of law and economics helped fortify legal academia with cutting-edge economic tools, and this synthesis has become a profoundly impactful avenue of social research over the past decades. Orley’s pathbreaking work, critical to the origins of multiple major fields of study, is the reflection of a truly legendary intellect. 

Orley’s remarkable career has not been limited to academic research. As director of the Office of Evaluation of the U.S. Department of Labor, Orley established a system of rigorous quantitative analysis that helped guide the more effective implementation of worker training programs and forever changed government policy analysis—particularly with regard to the minimum wage. He served as editor of the American Economic Review, the flagship journal in the field, from 1985 to 2002. For the past three decades, he has helped restore doctoral programs in economics in the Czech Republic and served on the executive and supervisory committee of the economics 

centers at Charles University, Prague, and the Academy of Sciences of the Czech Republic. 

Orley has been recognized with many prestigious honors and appointments. He was a Guggenheim Fellow (1976-77). He is a fellow of the Econometric Society (1977), the American Academy of Arts & Sciences (1993), and the National Academy of Sciences (2018). He received the Society of Labor Economists’ Jacob Mincer Award (2005), was recognized as a distinguished fellow of the American Economic Association (2008), and served as the president of the Society of Labor Economists (2003), president of the American Law and Economics Association (2010), and president of the American Economics Association (2011).

Outside the United States, he received the IZA Prize in Labor Economics (2003), an honorary doctorate from the University of Brussels (2002), the Karel Englis Honorary Medal in the Czech Republic (2007), an honorary degree from Charles University, Czech Republic (2014), and an honorary doctorate from the University of Bordeaux (2023). 

Orley’s career as an innovator is also reflected in his foundational work in the new field of “wine economics.” He is president of the American Association of Wine Economists and co-editor of the Journal of Wine Economics. He is an ardent proponent and producer of New Jersey wines, and many a student has enjoyed impromptu wine tastings along with dinner at Orley and Ginna Ashenfelter’s home. Orley’s intense curiosity about the world and deep interest in people helped make him an extraordinary adviser who helped to guide his students’ careers well beyond graduation. These traits are on display in Orley’s most recent project, an oral history podcast called The Work Goes On, for which he interviews the pioneers of modern labor economics. The series showcases Orley’s deep concern with the people behind the ideas, which may be his most lasting legacy.

Written by members of the Department of Economics faculty.