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JEP article on Economics Phds training, school rankings, hiring selection and performance

8/27/2014

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"If the objective of graduate training in top-ranked departments is to produce successful research economists, then these graduate programs are largely failing. Only a small percentage of economics PhDs manage to produce a creditable number of publications by their sixth year after graduation.

For graduate students in economics (and also potential graduate students), the message is that becoming a successful research economist is difficult. The good news  is that one does not have to go to a top department in order to become a successful research economist. The bad news is that wherever one goes, only the very best of each class is likely to find academic success as defined by research publications.

Indeed, to become a tenured professor of economics one must cross many hurdles. Admission to an economics PhD program is difficult: most well-ranked departments receive several hundred highly competitive applications for entering classes that generally number between 10 and 30. Many of those admitted to a graduate program will ultimately fail to complete their degree. For example, Stock, Siegfried, and Finegan (2011) find that graduation rates from economics PhD programs are on the order of 30 percent by the fifth year after admission, rising to around 60 percent by the eighth year. (There is wide variability, but the higher-ranked programs seem to have higher graduation rates in general.) Even for those who do complete the PhD, the likelihood of ultimately accumulating a research record that might gain tenure at a top-100 department (much less a top-30or top-10 department) is not very great. 

Thus, students thinking about applying to PhD programs in economics would be well advised to have “Plan B’s” for every stage of the journey—including the possibility of not being accepted into a PhD program, the possibility of not completing the program, the possibility of not finding a suitable academic job, and the possibility of not receiving tenure. We hasten to add that there are many rewarding and worthwhile nonresearch and nonacademic career paths open to those who obtain masters or doctorate degrees in economics, and many students discover, either while in graduate school or during their untenured years, that they actually prefer these sorts of jobs to the academic life.

These results also raise some concerns for those of us who sit on admission committees and teach in graduate programs. To be admitted to a top PhD program in economics, an applicant has to have great grades, near-perfect test scores, strong and credible recommendations, and package these credentials in a way that stands out to the admission committee. Thus, successful candidates must be hardworking, intelligent, well-trained, savvy, and ambitious. Why is it that the majority of these successful applicants, who apparently did all the right things up to the time they arrived at graduate school and even managed to complete their PhDs, have such unimpressive careers as researchers? Are we failing the students or are the students failing us?

Our evidence is based on the accumulated record after six years, which unfortunately is not the information available to the hiring committee at the time the hire is made. Some evidence suggests that hiring committees may not be very accurate at forming expectations of quality when a new PhD hits the job market. Smeets, Warzynski, and Coupé (2006) explore the efficiency of the academic job market in matching students to positions. They study the 1992 and 1993 PhD cohorts fromthe 26 best graduate schools and discover that the matching of quality students to quality first jobs is not as tight as one might hope. They further show there is substantial, mostly downward, movement from the first to the final job hold, and overall, the research productivity of students who get first jobs of various qualities does not differ as starkly as we see in Table 1. This finding suggests that the students who are identified as top graduates in a given year (and who get top jobs as result) might not line up with the students who end up being the most productive six years later. For example, our data show that publishing a paper before graduation is uncorrelated with the productivity over the six-year probationary period before a tenure decision."































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Look on my works, ye mighty, and despair!

6/25/2014

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Steve Waldman once again articulates issues I struggle with in Economics. I believe we create false dichotomies between positive and normative analysis, between equity and efficiency, and I believe we argue for trade liberalization without any intention of requiring those who benefit to compensate those who lose. We do this to our great shame and to the detriment of our societies that we are supposed to serve.

Waldman:
 "When economics tried to put itself on a scientific basis by recasting utility in strictly ordinal terms, it threatened to perfect itself to uselessness. Summations of utility or surplus were rendered incoherent. The discipline’s new pretension to science did not lead to reconsideration of its (unscientific) conflation of voluntary choice with welfare improvement. So it remained possible for economists to recommend policies that would allow some people to be made better off (in the sense that they would choose their new circumstance over the old), so long as no one was made worse off (no one would actively prefer the status quo ante). “Pareto improvements” remained defensible as welfare-improving. But, very little of what economists had previously understood to be good policy could be justified under so strict a criterion. Even the crown jewel of classical liberal economics, the Ricardian case for free trade, cannot meet the test. As John Hicks memorably put it, the caution implied by the new “economic positivism might easily become an excuse for the shirking of live issues, very conducive to the euthanasia of our science.”

As one economist put it:

The only concrete form that has been proposed for [a social welfare function grounded in ordinal utilities] is the compensation principal developed by Hotelling. Suppose the current situation is to be compared with another possible situation. Each individual is asked how much he is willing to pay to change to the new situation; negative amounts mean that the individual demands compensation for the change. The possible situation is said to be better than the current one if the algebraic sum of all the amounts offered is positive. Unfortunately, as pointed out by T. de Scitovsky, it may well happen that situation B may be preferred to situation A when A is the current situation, while A may be preferred to B when B is the current situation.

Thus, the compensation principal does not provide a true ordering of social decisions. It is the purpose of this note to show that this phenomenon is very general.

That economist was Kenneth Arrow. “This note“, circulated at The Rand Corporation, was the first draft of what later become known as Arrow’s Impossibility Theorem.

It is not, actually, an obscure result, this impossibility of separating “efficiency” from distribution. The only place you will not find it is in most introductory economics textbooks, which describe an “equity” / “efficiency” trade-off without pointing out that the size of the proverbial pie in fact depends upon how you slice it."

The welfare theorems are often taken as the justification for claims that distributional questions and market efficiency can be treated as “separate” concerns. After all, we can choose any distribution, and the market will do the right thing. Yes, but the welfare theorems also imply we must establish the desired distribution prior to permitting exchange, or else markets will do precisely the wrong thing, irreversibly and irredeemably. Choosing a distribution is prerequisite to good outcomes. Distribution and market efficiency are about as “separable” as mailing a letter is from writing an address. Sure, you can drop a letter in the mail without writing an address, or you can write an address on a letter you keep in a drawer, but in neither case will the letter find its recipient. The address must be written on the letter before the envelope is mailed. The fact that any address you like may be written on the letter wouldn’t normally provoke us to describe these two activities as “separable”.

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How to get published

3/2/2013

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in  a top academic journal.
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    Karl Pinno

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