The unemployment rate for young college graduates exceeds that of the general population, and about 41 percent of recent college graduates — and 33.8 percent of all college graduates — are underemployed in that they are working in jobs that don’t require a college degree, according to new data from the Federal Reserve Bank of New York.
Here is more from Elizabeth Redden. The sad thing is, this is evidence of meritocracy, not a stinking economy.
We demonstrate empirically that measures of novelty are correlated with but distinct from measures of scientific impact, which suggests that if also novelty metrics were utilized in scientist evaluation, scientists might pursue more innovative, riskier, projects.
That is from Jay Bhattacharya and Mikko Packalen in a new NBER working paper and scientific innovation and stagnation.
They point out that Eugene Garfield, the scientist behind the development of citation count, did not think it should be used to evaluate individual scientists. Overall, citations encourage too much work in crowded, “approaching peak” areas, rather than developing new ideas. In lieu of citations, the authors suggest using textual analysis to determine how much a paper is building on new ideas rather than on already intensively explored ideas.
The Education Department opened investigations into Harvard and Yale as part of a continuing review that it says has found U.S. universities failed to report at least $6.5 billion in foreign funding from countries such as China and Saudi Arabia, according to department materials viewed by The Wall Street Journal…
The department described higher-education institutions in the U.S., in a document viewed by the Journal, as “multi-billion dollar, multi-national enterprises using opaque foundations, foreign campuses, and other sophisticated legal structures to generate revenue.”
…Universities are required to disclose to the Education Department all contracts and gifts from a foreign source that, alone or combined, are worth $250,000 or more in a calendar year. Though the statute is decades old, the department only recently began to vigorously enforce it.
Officials accused schools of actively soliciting money from foreign governments, companies and nationals known to be hostile to the U.S. and potentially in search of opportunities to steal research and “spread propaganda benefitting foreign governments,” according to the document.
In addition, while the department said it has found foreign money generally flows to the country’s richest universities, “such money apparently does not reduce or otherwise offset American students’ tuition costs,” the document said.
Here is the full WSJ story.
Here is the transcript and audio, here is part of the summary:
Tim joined Tyler to discuss the role of popular economics in a politicized world, the puzzling polarization behind Brexit, why good feedback is necessary (and rare), the limits of fact-checking, the “tremendously British” encouragement he received from Prince Charles, playing poker with Steve Levitt, messiness in music, the underrated aspect of formal debate, whether introverts are better at public speaking, the three things he can’t live without, and more.
Here is one bit near the opening:
COWEN: These are all easy questions. Let’s think about public speaking, which you’ve done quite a bit of. On average, do you think extroverts or introverts are better public speakers?
HARFORD: I am an introvert. I’ve never seen any research into this, so it should be something that one could test empirically. But as an introvert, I love public speaking because I like being alone, and you’re never more alone than when you’re on the stage. No one is going to bother you when you’re up there. I find it a great way to interact with people because they don’t talk back.
COWEN: What other non-obvious traits do you think predict being good at public speaking?
HARFORD: Hmmm. You need to be willing to rehearse and also willing to improvise and make stuff up as you go along. And I think it’s hard for somebody to be willing to do both. I think the people who like to rehearse end up rehearsing too much and being too stiff and not being willing to adapt to circumstances, whereas the people who are happy to improvise don’t rehearse enough, and so their comments are ill formed and ill considered. You need that capacity to do both.
And another segment:
HARFORD: …Brian Eno actually asked me a slightly different question, which I found interesting, which was, “If you were transported back in time to the year 700, what piece of technology would you take — or knowledge or whatever — what would you take with you from the present day that would lead people to think that you were useful, but would also not cause you to be burned as a witch?”
COWEN: A hat, perhaps.
HARFORD: A hat?
COWEN: If it’s the British Isles.
HARFORD: Well, a hat is useful. I suggested the Langstroth beehive. The Langstroth beehive was invented in about 1850. It’s an enormously important technology in the domestication of bees. It’s a vast improvement on pre-Langstroth beehives, vast improvement on medieval beehives. Yet, it’s fairly straightforward to make and to explain to people how it works and why it works. I think people would appreciate it, and everybody likes honey, and people have valued bees for a long time. So that would have been my answer.
COWEN: I’ve read all of your books. I’ve read close to all of your columns, maybe all of them in fact, and I’m going to ask you a question I also asked Reid Hoffman. You know the truths of economics, plenty of empirical papers. Why aren’t you weirder? I’ve read things by you that I disagreed with, but I’ve never once read anything by you that I thought was outrageous. Why aren’t you weirder?
The conversation has many fine segments, definitely recommended, Tim was in top form. I very much enjoyed our “Brexit debate” as well, too long to reproduce here, but I made what I thought was the best case for Brexit possible and Tim responded.
From a new JEP appreciation by Janice Eberly and Michael Woodford:
Emi’s exposure to economics began early in life. Her grandfather, Guy Orcutt, was a distinguished econometrician (Watts 1991). Both of her parents, Alice and Masao Nakamura, were academic economists; her mother, Alice Orcutt Naka-mura, is a past President of the Canadian Economic Association. In addition to an early exposure to economic ideas, Emi credits her parents with instilling in her “a deep sense of the importance of testing theories empirically” (Ng 2015). Emi attended academic conferences with her mother and began taking economics classes at the University of British Columbia as a high school student. She credits one of these early classes, a master’s class on economic measurement and index number theory taught by Erwin Diewert, with making an early mark in her drive for clarity in measurement. In a similar vein, Emi watched the film “The Race for the Double Helix” about the discovery of the structure of DNA with her parents. They emphasized the role of the empiricist Rosalind Franklin and the notion that “there is nothing worse than a wrong fact.”
Perhaps one lesson here is the importance of mobilizing talent from very early ages. Here is previous MR coverage of Emi Nakamura.
The George Washington University faculty and staff ain’t got no culture. Or worse, we’ve got a negative culture. This was the verdict of the Disney Institute, which the president of our university commissioned last year to assess the culture on our campus. Fortunately, the institute, which is the “professional development and external training arm of The Walt Disney Company,” has a remediation plan. It has designed workshops to teach us the cultural “values” and “service priorities” we evidently require….
Our president is rumored to have forked over three to four million dollars to the Disney Institute to improve our culture (he refuses to reveal the cost). A select group of faculty and staff, those identified as opinion leaders, are being offered all-expenses paid trips to the Walt Disney World Resort in Orlando “to gain first-hand insight into Disney’s approach to culture.” For everyone else, the university is conducting culture training workshops that run up to two hours. All staff and managers are required to attend. Faculty are strongly “encouraged” to participate, and some contract faculty, who have little job security, evidently have been compelled to do so.
I attended one of these workshops. It was a surreal experience. About a hundred mostly sullen university employees—maintenance workers, administrative staff, faculty members, and more—filled a ballroom. Two workshop leaders strained to gin up the crowd’s enthusiasm with various exhortations and exercises, supplemented by several slickly produced videos. The result was a cross between a pep rally and an indoctrination camp.
We were introduced at the beginning of the workshop to the university’s brand new slogan: “Only at GW, we change the world, one life at a time.”
Here is the full blog post from Dane Kennedy, faculty at GWU. Via Isaac C.
A new study compares Hebrew-speaking with some Arabic-speaking communities, here is the abstract:
In the past three decades in high‐income countries, female students have outperformed male students in most indicators of educational attainment. However, the underrepresentation of girls and women in science courses and careers, especially in physics, computer sciences, and engineering, remains persistent. What is often neglected by the vast existing literature is the role that schools, as social institutions, play in maintaining or eliminating such gender gaps. This explorative case study research compares two high schools in Israel: one Hebrew‐speaking state school that serves mostly middleclass students and exhibits a typical gender gap in physics and computer science; the other, an Arabic‐speaking state school located in a Bedouin town that serves mostly students from a lower socioeconomic background. In the Arabic‐speaking school over 50% of the students in the advanced physics and computer science classes are females. The study aims to explain this seemingly counterintuitive gender pattern with respect to participation in physics and computer science. A comparison of school policies regarding sorting and choice reveals that the two schools employ very different policies that might explain the different patterns of participation. The Hebrew‐speaking school prioritizes self‐fulfillment and “free‐choice,” while in the Arabic‐speaking school, staff are much more active in sorting and assigning students to different curricular programs. The qualitative analysis suggests that in the case of the Arabic‐speaking school the intersection between traditional and collectivist society and neoliberal pressures in the form of raising achievement benchmarks contributes to the reversal of the gender gap in physics and computer science courses.
The article is “Explaining a reverse gender gap in advanced physics and computer science course‐taking: An exploratory case study comparing Hebrew‐speaking and Arabic‐speaking high schools in Israel” by Halleli Pinson, Yariv Feniger, and Yael Barak.
Via the excellent Kevin Lewis.
In Delhi, street hawkers will sell food, flowers, and balloons to cars paused at an intersection and, sadly, small children will dance for alms. My favorites are the book hawkers. I suspect Banerjee and Duflo would approve of my choice of both title and seller. Good price also.
Scholar’s Stage has a long post on why public intellectuals often have such short careers in terms of quality output. Here are my tips for extending your shelf life, noting that I am not myself suggesting I have managed all of these, do as I say not necessarily as I do:
1. Take a cue from Kobe Bryant. As you get older, you have to practice critical thinking more, and harder, compared to when you were young. Most people let up on their practice habits over time.
2. Avoid criticizing other public intellectuals. In fact, avoid the negative as much as possible. However pressing a social or economic issue may be, there is almost always a positive and constructive way to reframe your potential contribution. This also will force you to keep on thinking harder, because it is easier to take apparently justified negative slaps at the wrongdoers.
3. You probably don’t have as much actual influence as you like to think, and besides fame is a mix of benefits and costs. So write to meet your own standards of quality, and no I don’t mean your standards for how much influence you think you ought to have.
4. In your copious spare time, keep on picking up and learning new areas of study.
5. Go to some travel locations you never would have gone to before, and without too many firm plans, so for instance avoid having a full schedule of public lectures.
6. Interact with students, and not just in a “famous person interacting with students” kind of way. The value of having to motivate and explain things to people who don’t necessarily care who you are is high.
7. Shy away from discussion of political candidates as much as possible. “Run away” is better yet.
8. Try not to write things, including tweets, a less analytical and intelligent person also could have written.
10. Hang around happy, cheery people. That said, also have some ornery friends determined to make (intellectual) life difficult for you. You need both.
11. Continue to read some serious fiction, always. Genre fiction has other uses, but most of it doesn’t satisfy this stricture.
12. Be very reluctant to purge your friends and acquaintances for perceived intellectual or political wrongdoings.
I do not think that the main explanation for this is the increasing age requirements for America’s best jobs. Instead, I contend that this sorting is an efficient response to the standardization of entry-level jobs and bureaucratization of hierarchies . Most firms are not well-equipped to efficiently utilize the top tier of smart, talented but raw new employees. Sending them off to consulting firms is a rational response from the point of view of both the young employees as well as the companies.
(Since the number of startup founders and scientists is relatively small, the real cost of this talent allocation is to Fortune 500 companies. I will therefore focus on large companies. I will also just focus on consulting, though I believe the arguments apply equally to law, finance, and perhaps big tech.)
Most corporate entry-level programs do not offer much stratification between the smart, highly motivated individual and the more average performer. Fifty years ago a bright, ambitious new college graduate had no choice but to pay one’s dues by starting at the bottom like everyone else and then work one’s way to the top–albeit at a faster rate than today. Today that same graduate can select into the fast track via consulting.
Moreover, this is an equilibrium that–at least in the short- to medium-term–makes sense for all players. The ambitious young graduate receives a wage premium in exchange for higher productivity. The consulting firm gets to hire the smart people it needs to build its pyramid. And even the Fortune 500 company gets to gain from the intelligence of the new graduate when it hires the consulting firm; arguably this company is a loser on net compared to fifty years ago (when it received access to the talent but did not have to pay the consulting firm to act as a middleman), but the equilibrium is still tenable.
My own experience at GE and a top management consulting firm is a good example of this in action. I joined GE through one of its leadership development programs but found my peers to be less talented and hard-working than I had hoped. Unsurprisingly, I also found the roles to be uninspiring and poor uses of my time. After less than two years, I left to join a top consulting firm. I was challenged from day one and at times was not sure if I would make it. My bosses asked much more of me, but they also better resourced me. My productivity was an order of magnitude higher than at GE, and I was accordingly paid nearly twice as much.
For further evidence, consider that 90% of US companies have predefined pay bands based on experience. Given one’s experience level, it is difficult to make considerably more than one’s peers in the first few years (which is the purpose of pay bands). Contrast that with consulting: an average graduate with an engineering degree (the highest earning of all degrees) earns $69k but a new associate at McKinsey earns $105k. The disparity only widens for lower-earning degrees.
One counterargument is that the sorting done by consulting firms is based mostly on the prestige of one’s university education (whether undergraduate or graduate). Obviously all the smart people did not go to the Ivy League, and besides, don’t those schools screen for a narrow type of excellence anyways?
Yes, this is certainly true. However, I think it is also true that most people who can gain admission into one of these schools and pass the rigorous battery of consulting interviews are, by most reasonable measures, smart. Their willingness to self-select into consulting indicates their work ethic. It is far from a perfect screen, but it is a relatively effective one given how easy it is to utilize.
Thus, it is rational (at least in this narrow sense) for young people to self-select into consulting…
There is a bit more at the link.
In 2016, the Liberian government delegated management of 93 randomly selected public schools to private providers. Providers received US$50 per pupil, on top of US$50 per pupil annual expenditure in control schools. After one academic year, students in out-sourced schools scored 0.18 σ higher in English and mathematics. We do not find heterogeneity in learning gains or enrollment by student characteristics, but there is significant heterogeneity across providers. While outsourcing appears to be a cost-effective way to use new resources to improve test scores, some providers engaged in unforeseen and potentially harmful behavior, complicating any assessment of welfare gains.
That is by Mauricio Romero, Justin Sandefur, and Wayne Aaron Sandholtz in the new AER. The gains are real, and not the result of student selection. That said costs are higher with the private contracting. Better partner selection would have improved the program greatly, though the authors note that some of the most promising partners ex ante ended up being the biggest troublemakers ex post. Some of the schools, for instance, allowed a possibly unacceptable degree of sexual abuse of the students. There is perhaps potential for dynamic reoptimization of permissible partners to yield very real gains, though this may or may not be supported by the available political economy incentives.
The authors suggest, by the way, that outsourcing or contracting out to the private sector often does better when quality is relatively simple, such as with water services, food distribution, and simple forms of primary health care, such as immunization. In their view, for advanced health care and prisons, contracting is less effective, due to the vaguer nature of product quality.
This is in any case a very important paper, likely to be one of the best and most significant of the year.
Mathis Lohaus writes to me:
Thanks for doing the Conversations. I greatly enjoyed Acemoglu, Duflo, and Banerjee in short succession after the Christmas break. Your question about “top-5 journals” and the bits about graduate training reminded of something I’ve had on my mind for a while now:
For the average PhD student, how hard is it to become a tenured economist — compared to 10, 20, 30, 40 … years ago? (And how about someone in the top 10% of talent/grit?)
Publication requirements have clearly become tougher in absolute terms. But how difficult is it to write a few “very good” papers in the first place? On twitter, people will sometimes say things like “oh, it must have been nice to get tenure back in 1997 based on 1 top article, which in turn was based on a simple regression with n = 60”. I wonder if that criticism is fair, because I imagine the learning curve for quantitative methods must have been challenging. And what about the formal models etc.? Surely those were always hard. (I vaguely remember a photo showing difficult comp exam questions…)
More broadly, early career scholars now have tons of data and inspiring research at their fingertips all the time. Also, nepotism and discrimination might be less powerful than in earlier decades…? On the other hand, you have to take into account that many more PhDs are awarded than ever before. I suspect that alone is a huge factor, but perhaps less acute if we focus only on people who “really, really want to stay in academia”.
A different way to ask the question: When would have been the best point in time to try to become an econ professor (in the USA)?
I would love to hear about your thoughts, and/or input from MR readers.
I always enjoy questions that somewhat answer themselves. I would add these points:
1. The skills of networking and finding new data sets are increasingly important, all-important you might say, at least for those in the top tier of ability/effort.
2. Fundraising matters more too, because the project might cost a lot, RCTs being the extreme case here.
3. Managing your research team matters much more, and the average size of research team for influential work is much larger. Once upon a time, three authors on a paper was considered slightly weird (the claim was one of them virtually always did nothing), now four is quite normal and the background research support is much higher as well.
Recently I was speaking to someone on the job market, wondering if he should be an academic. I said: “In the old days you spent a higher percentage of your time doing economics. Nowadays, you spend a higher percentage of your time managing a research team doing economics. You hardly do economics at all. So if you are mainly going to be a manager, why not manage for the higher rather than the lower salary?”
That was tongue in cheek of course.
On the bright side, learning today through the internet is so much easier. For instance, I find YouTube a good way to learn/refresh on new ideas in econometrics, easier than just trying to crack the final published paper.
That is a theme running throughout my latest Bloomberg column, here are some excerpts:
Why so many of America’s best and brightest college graduates go into management consulting, finance or law school is a perennial question. There are some compelling theories, which I will get to, but first I would like to turn the question around: Why are so many people in top positions, whether in the public or private sector, so old?
I submit that these two trends — and a third, declining productivity growth — are related: Many tasks have become increasingly complex in America, often more complex than people can learn in just a few years. By the time you have experience enough to perform them, you are less interested in taking risks. In your young adventurous years, by contrast, the only jobs you can get are those that don’t reward (or allow) adventure. The result of all this is a less audacious America.
…the smart graduates of America’s top universities will seek relatively thick, liquid job markets, with high upside but also protection on the downside. Management consulting is perfect. If you are intelligent and hard-working, you can signal that quickly, and the entry-level tasks are sufficiently anodyne that few very specific skills are required. These jobs are designed to attract talent, so the consulting companies have an eventual option on promoting the best candidates. The same is true of law and the less quantitative parts of finance.
In the short term, this system seems to work for everyone. If you don’t like those vocations after a few years of trying, you still have elite connections and credentials that you can take somewhere else.
On net, America is selling its talented young people insurance value — but at the expense of long-term innovation. It might be better for the country if more of these individuals started businesses, tried their hand at chemistry or materials science, or worked in obscure corners of manufacturing in the Midwest. Of course, rates of failure or stagnation are higher in those areas, while glamour is often lower. Who wants to work on mastering a complex task for 10 or 15 years, with no real guarantee of commercial success?
The slower rates of growth in scientific progress are part of this picture. Older scientists are more likely to be in charge, but they also make fewer conceptual breakthroughs. Younger scientists are more temperamentally inclined to be revolutionaries, but that is hard when it may take you until your late 20s just to learn the basics of your field. Most areas are too complex for a 23-year-old to make new scientific advances, no matter how brilliant he or she may be.
Tech of course is an exception. And please do note that de-bureaucratization could do a great deal to lower this task complexity, while other parts of it are inescapable — I didn’t have the space for that point in the column but will return to it and what might be done. Finally, I thank a number of people who contributed ideas and examples to my argument.
When officials at the Texas A&M University System sought to determine how much Chinese government funding its faculty members were receiving, they were astounded at the results—more than 100 were involved with a Chinese talent-recruitment program, even though only five had disclosed their participation.
A plant pathologist at the Texas system, where the median annual salary for such scientists employed by the state is around $130,000, told officials that the researcher had been offered $250,000 in compensation and more than $1 million in seed money to start a lab in China through one of the talent programs. The researcher ultimately rejected the offer, according to the Texas system’s chief research security officer, Kevin Gamache, who led the recent 18-month review that has garnered praise from U.S. officials.
That is from Aruna Viswanatha and Kate O’Keeffe at the WSJ. As for Harvard:
Charles Lieber, a pioneer in nanotechnology, allegedly signed a contract with Chinese counterparts under which he would be paid around $50,000 a month, plus another $150,000 a year for personal expenses; he was also promised—and received—more than $1.5 million to establish a research lab at the Wuhan University of Technology, according to prosecutors.
He is specifically charged with deliberately lying to U.S. government investigators when asked if he received Chinese talent-plan funding, rather than simply omitting the information on forms.
The Mercatus Center at George Mason University is currently accepting applications for our graduate student programs for the 2020-2021 academic year, including several graduate student fellowships for students in any discipline and from any university. The application deadline is March 15, 2020.
The Adam Smith Fellowship is a one-year, competitive program for doctoral students interested in political economy and is co-sponsored with Liberty Fund, Inc. Fellowships are awarded to students attending PhD programs from any university and in any discipline, including economics, philosophy, political science, and sociology.
The Frédéric Bastiat Fellowship is a one-year, competitive program for graduate students interested in applying political economy to pressing public policy issues. Fellowships are awarded to students attending master’s, juris doctoral, and doctoral programs at any university and in any discipline, including economics, law, political science, and public policy.
The Oskar Morgenstern Fellowship is a one-year, competitive fellowship program awarded to doctoral students with training in quantitative methods who interested in applying these methods to issues in political economy. Fellowships are awarded to students attending PhD programs from any university and in any discipline, including economics, political science, and sociology.
Here is the overall fellowships page.