Monthly Archives: January 2015

Claims that the economics job market is tough this year

It seems that every year since I started grad school, I hear someone say that the economics job market is tough (for candidates) that year. Usually it is in connection with some graduate student on the market getting a less good job than one anticipated. But the toughness of the market is a relative measure, so relative to what year is this year tough? Relative to 1950? After the Second World War, the US expanded its university sector with the GI Bill, which created a large demand for new faculty members. This made the market easy for candidates and as the effect gradually faded, the market got tougher. This is probably not what people have in mind when they claim a tough market.
As computing power becomes cheaper, the demand for people who are substitutes of computers (theorists) falls and the demand for complements of computers (empirical and computational researchers) rises. So the theory market may get tougher for candidates over time, but the empirical market should get easier.
There are other long term trends, like the fraction of the population getting a university degree increasing, but at a decreasing rate. If the university sector expands to cater to the increased demand, the market should get easier for candidates. But this also depends on the expectations of the universities. Hiring responds to anticipated future enrollment, not just the current number of students.  So if demand for university education rises less than expected (it does not have to fall), the demand for new faculty members falls.
Lengthening lifespans mean older faculty members free up fewer spots in universities, which reduces demand for new faculty members, but this effect is tiny, because lifespans lengthen very slowly.
A short term effect on hiring was the financial crisis, which reduced university hiring budgets. This made 2009 a tough year for candidates relative to the surrounding years.
A study on how tough the market really is would be interesting, but hard to do, because it requires a measure of the quality of candidates that is independent of the jobs they get or papers they publish. Both jobs and papers are subject to a congestion effect, so the toughness of the job market or publication market affects these measures. The definition of toughness is that the tougher the market, the worse the results for a graduating student of a given quality.
The market for economists is worldwide, so it would be easier to study academics in some field that is country-specific and thus has barriers to trade, say law.

Claims that placement officers do a great job

Those on the economics job market have probably heard statements in their department like “our placement officers do a great job” and “we place our students very well”. First, no university would say they place students badly, because then students would not apply there. Second, faculty members don’t want to be in committees, including placement, so if one faculty member said that another does a bad job in placement, then the immediate response would be: “You do it then, and do better.” Anticipating this, no faculty member will criticize another’s committee work quality.
Hence, an empirical project idea: how does the placement outcome (e.g. rank of institution making job offer) depend on student quality (e.g. papers published before graduating) and the placement committee and university fixed effects? The measures of quality and outcome are of course noisy, but the sample size (people on the job market) is fairly large.