After a long long time devoted to education, economists do need to look for a job. But they (generally) do not do it in the standard way: calling, sending CVs and so on. There is something called the Job Market that takes place every year early in January. Obsessed with efficiency, the Economics Job Market has a particular advantage: applications and initial interviews are centralized. Most of them take place at the American Economic Association annual meeting. And after some very stressful days, interested employers call back and schedule fly-outs for February-March. After meeting them, going for drinks and dinner, and also presenting your research, job offers are determined. But the question I have is what determines the outcome of this stressful process? As a person that will hopefully eventually go through this ordeal, I wondered if there was any data about it.
Even though all economists have experienced this, I wasn't able to find much research about the job market unfortunately. But I found one paper where they asked what aspects of education are associated with good outcomes in the job market. They collected data on graduates from Top departments (Harvard, MIT, Princeton, Stanford and Chicago) and checked what was associated with the best job outcomes. Obviously, the sample of graduates coming from those departments is not representative of all economics graduates. Since they were accepted in such departments, they are most likely representative of the very top of the distribution of applicants to PhDs. Studied by academics, another caveat is that job placements in the business sector were generally assigned a much lower ranking than university ones (a good business sector job was similar to a university in the 200-250 rank). But well, the questions are:
0) What is the typical PhD graduate? 1990-1999.
He (only 25% female) is a foreigner (63% non-US) who might come from a foreign undergrad school (49%). Most likely he does not come from a top undergrad school though (22% coming from top-15) nor does he have a masters degree (24% with masters). 3 out 4 admitted students do graduate the PhD. And around 26% of (this very selective group of) graduates end up in a Top-20 school. The sample is a bit old and selective unfortunately and some things might have changed. Unfortunately, one has definitely not. It is still mainly male students.
1) Do admissions requirements matter for grades?
Before entering, a standardized exam called GRE is required. This has three parts: math, verbal and analytical. GRE math and analytical grades - even within this group of people with really high ones - are highly positively associated with good core grades in the PhD program. I always thought this was more of a filter requirement: once above it, all students would be pretty similar. But it seems not.
Coming from a Top-15 US university is not associated with better grades. A masters degree helps slightly. And coming from a foreign school is correlated with better grades. But this may be due to a much more selective procedure for students coming from abroad. Or from them being more devoted since they are willing to leave their home countries.
2) Do grades matter for graduation?
First, grades are highly correlated: if you do well in one, you also do well in others. I find this very interesting since we are looking at people who will later on focus on a very very tiny part of the world of economist, so we could have expected that people doing great in one Micro would not do well in Macro, or viceversa. Let me clarify that grades are only a small part of the PhD. Most of it is actually doing research, which is what most graduates will do afterwards in their careers. But core micro and macro - sorry econometrics! - grades certainly seem to matter for graduation. Even (sort of) when restricting to those who passed the courses requirement, goods grades were associated with graduation.
3) And finally, what matters for job placement?
A) Observable before starting the PhD.
Once again, coming from a foreign university is positively associated with landing a Top 20 job. Coming from a Top school in the US is also good. GRE not so much anymore. (Being a man or a woman does not seem important either, so maybe we have a hope.)
B) Observable after starting the PhD.
Micro and Macro core grades are good predictors of job placement - sorry econometrics again. Admissions rank does not seem relevant, which might question the capacity of departments to rank students. Conditional on grades, coming from a foreign school does not seem to matter as much. But coming from a Top US school still does. I wonder if a language or culture bias could be behind this...
The questions that remains are why are some characteristics much stronger predictors of grades than of job placements? If what really matters for the outcome of PhD students or the evaluation of the department is the placement, why does the admission procedure seem quite ineffective in predicting it? And, finally, what's wrong with econometrics?
Based on article from AEA.
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