Economics in the Weekly Torah Portion

I actually thought about this just-posted bit of Freakonomics when I was preparing for my leining of the last 7th portion of this past week's Torah reading.

One of the better-known biblical passages, Leviticus 27:1-7, lists the value of pledges of silver to the temple based on the value of a person: 50 shekels for a man between the ages of 20 and 60, 30 shekels for a woman of the same age, 15 shekels for a man over 60, and 10 shekels for a woman over 60. Hourly wage rates of workers in the U.S. in 2008 differed greatly from the ratios implied by Leviticus. The average female worker between 20 and 60 years old earns, per hour, nearly 80 percent of a male worker the same age, not 60 percent; and the average older male worker earns nearly as much per hour as the average male worker between 20 and 60.

Most older men and women don’t participate in the labor force, and fewer 20- to 60-year-old women work than men that age. Take all U.S. citizens in each age/sex group, whether or not they work, and assume that men aged 20 to 60 earned 50 shekels per time period in 2008. Then women aged 20 to 60 earned 34 shekels, men 61 plus earned 14 shekels, and women 61 plus earned 7 shekels. Once we ignore differences in labor-force participation, the earnings ratios are not that far from what was expected 3,000 years ago.

I'll bet if you adjust for lifespans (say 60->85) and number of children (forced time out of the workforce) these ratios would be still pretty accurate. It's interesting that these values are clearly not an attempt to NPV future earnings since a 20 year old is treated the same as a 59 year old.