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The future of economics
In a nutshell, foreigners and empirical work:
This short paper collects and studies the CVs of 112 assistant professors in the top-ten American departments of economics. The paper treats these as a glimpse of the future. We find evidence of a strong brain drain. We find also a predominance of empirical work.
Three-quarters of the bachelor degrees were obtained from abroad. Macro, econometrics, and labor economics are the most popular fields, see p.8 for the full list. Here is the paper, hat tip to Pluralist Economics Review.
Posted by Tyler Cowen on April 3, 2008 at 03:30 PM in Economics | Permalink
Comments
It doesn't look like the paper presents any background by which we could treat their data sample taken during January 2007 as a glimpse of the future.
I wonder how correlated the current state of economics is with the CVs of assistant professors at top-ten departments in 1997, 1987, 1977 or 1967.
Posted by: Mike G at Apr 3, 2008 4:21:41 PM
Might this help explain the ignorance and illogic of the conventional wisdom on immigration that prevails in the economics profession: self-interested bias?
Oh, I'm sorry, I forgot. Self-interest never, ever applies to economists.
Posted by: Steve Sailer at Apr 3, 2008 4:32:22 PM
NYU in the top 10? I don't know about that.
Posted by: Dr. Who at Apr 3, 2008 4:41:06 PM
Dr. Who - it's from a 2004 listing of "top schools" used by econphd dot net.
The appearance of labor economics as #3 is interesting, because the authors note that "labor" has become a fairly general term and encompasses many things not considered labor at all. I suspect anyone studying crime, for instance, is calling themselves a labor economist (ie., illicit labor markets). I'm surprised, therefore, to see applied micro and labor listed separately, and wonder what the applied micro actually is that isn't in labor.
As for whether anyone will find it an encouraging sign that economists are predominantly applied and not theoretical, as the authors note. I suspect that it's only a mild improvement. Junior faculty also focus a lot on methods that prove causality. And while that's crucial, I think it's also got its downsides too. My colleagues and I now tend to search desperately for instruments, and only after having them do we think about the interesting questions we can ask with them. I suspect that for many outside the profession, it's not clear what has been gained exactly.
Posted by: jason voorhees at Apr 3, 2008 4:49:37 PM
I'm not feeling as threatened. Macro and econometrics are pretty close to voodoo economics. Labor economics is better, especially on the empirical front, although you still get the occasional paper purporting to show that minimum wages and immigration restrictions are costless to society.
Posted by: M. Hodak at Apr 3, 2008 5:06:50 PM
The data provides evidence for a trend I've seen anecdotally elsewhere: that the U.S. imports, rather than grows, its talent.
Leaving aside, in this light, the dubious wisdom of making it more difficult for talent to enter the United States, as the U.S. dollar falls and incomes rise elsewhere, the U.S. will be less and less able to import talent, and hence, less and less competitive.
At this point, the folly of abnegating a free and equitable public education system for will become sadly apparent.
Posted by: Stephen Downes at Apr 3, 2008 5:16:04 PM
From the paper:
" Many people who criticize economists as obsessively mathematical have a view that is out of date; our data paint a clear and more modern picture."
This is a vague statement that might suggest to some that there is a dearth of current empiricism on the trends and consequences of usage of mathematical complexity in economics. This is incorrect. Here are two examples:
I.) Coelho and McClure (SEJ, 2005; "Theory versus Application: Does Complexity Crowd Out Evidence?) found evidence of both: 1) a significant trend toward increased mathematical complexity in the top general interest journals in economics (AER,EJ,JPE, QJE); and in a sample of AER articles (1963 – 1996) they found evidence that “mathematically complex articles were less operational and were less likely to be cited in articles containing operational statements.”
II.)Coelho and McClure (EJW, 2008; "The Market for Lemmas: Evidence that Complex Models Rarely Operate in Our World") provide evidence that: 1) in the final decades of the last century, mathematical complexity in economics expanded exponentially beyond the levels that Donald Gordon (1955) decried as “incautious;” 2)using sample of lemma-heavy articles in JET, their evidence suggests that operational “dry holes” are a likely outgrowth of economic analytics involving extraordinarily lengthy/complex mathematical chains; 3) Among the most-often-cited articles that are published in the AER, EJ, JPE, or QJE, lemma usage was almost non-existent for the period 1970 to 2002; this despite the expanding “market for lemmas” over the time period; and 4)Consistent with the Gordon hypothesis, lemma usage was much less common among most-often-cited articles whose purpose was “economic analytics” as opposed to those whose purpose was “statistical/ econometrics” for the period 1970 to 2002.
So the authors may want to do a little more reading in the area and consider refining their vague assertion that, again:
"Many people who criticize economists as obsessively mathematical have a view that is out of date; our data paint a clear and more modern picture."
Posted by: indiana jim at Apr 3, 2008 5:58:19 PM
I find it very interesting that the vast majority of Phd students at top universities come from abroad. I wonder if that's going to start to change due to the recent popularity of economics as an undergraduate major.
I'm currently a junior majoring in economics at a large public university in Florida. Econ isn't popular here as most of the people who would tend to study economics instead opt for "general business" with hopes of later attending a third rate business school. I seem to be the only one seriously preparing for graduate school, taking a boatload of math and a few graduate econ classes.
At more prestigious schools (that tend to not have business majors), economics is very popular. One would think the Phd programs would have an ample supply of students to choose from. It seems, however, that these folks are using it as a stepping stone for law school or ibanking.
Posted by: Raymond Saade at Apr 3, 2008 6:07:25 PM
Raymond is probably correct. I'm in the same boat, majoring in econ, taking math to prepare for graduate work. I can say that, in my opinion, the TERRIBLE state of math education in secondary schools is at fault. Students in schools in Europe, China, or India (among others) can expect to have a working knowledge of college algebra and calculus leaving high school. More and more often the average US college freshman is having to remediate at the 095/100 level for math (algebra to pre-algebra). The fact that top flight American high school students stand at the level of the above average foreign high school student should be shocking.
Posted by: Adam Hyland at Apr 3, 2008 7:41:27 PM
You have to hand it to Stephen Downes. Here's a paper which presents the top 10 programs in economics (at least according to econphd's publication rankings) and every one is in the United States. Not only that, but if you go to the rankings, 21 of the top 25 departments are in the US. To be fair, that's better than the overall education rankings such as this one , in which the United States claims "only" 14 of the top 25 slots. The obvious conclusion? The United States university system sucks.
Though Steve Sailer is making another strong claim for the booby prize of "strangest inference imaginable". American economics professors (the native born ones I mean) support free trade and labor mobility just the same as do the foreign born ones. The evidence in this paper is that this is clearly "bad" for American professors, who face a higher supply of competitors and lower ability to land those plum top 10 jobs. I (a native born graduate student in economics) would obviously have a better chance of landing an academic job were we to restrict immigration. And yet to Mr. Sailer, the fact that economists welcome more competition is evidence of our nefarious self-interedness.
Posted by: Curunir at Apr 3, 2008 7:51:22 PM
There is an unsurprising consistency in seeing more swipes at a swathe of labor economists' and most trade economists' views. Steve Sailer deserves some sort of all-MR idée fixe prize.
Posted by: Petrarca at Apr 3, 2008 8:42:40 PM
Curunir, you certainly make an, uhm, interpretive reading of Stephen's comments. He did not say the US university system sucks, but that restricting immigration will lead it in that direction.
The US has 20% of the world's wealth, 5% of its population, and <<<1% of its hungry people. Importing those smart, hungry foreigners is a large part of what has made the upper echelons of the US academy such a world beater, and stopping those people from coming will hurt America (except for the psyches of the Sailerites) and help the rest of the world.
Raymond: you might see an uptick in the number of Americans seeking economics doctorates, but the fact is, even in a weak economy, you can still make more money for far less preparatory effort and strife. So expect a trickle, not a torrent.
Posted by: bartman at Apr 4, 2008 1:50:36 AM
If Americans choose to do different things than being an assistent professor because the those other things pay better, shouldn't we ask why those other professions are not hiring foreigners in the same amounts as universities do?
One possibility: in the business world, culture-specific skills are more important than in academics.
Posted by: greatzamfir at Apr 4, 2008 3:37:08 AM
The authors have a 3 way classification of economists: 1) theoretical (at least 3/4 of the author's papers have to have no data); 2) empirical (at least 3/4 of the author's papers have to have data); and 3)theoretical+emprical(all others).
This classification system is of course very coarse because there is no attempt to assess the quality of the work. Are the so called "empirical" papers any good in the "McCloskey" sense? That is do they look at economic significance or focus solely on statistical significance? Are the "theoretical" papers so complex that they are unlikely to lead to operational propositions?
It seems to me that if the authors of the paper are serious about trying to address the question in their title "The Future of Economics", then the coarse classification they have used will need to be refined so that the quality of "theoretical" and "empirical" papers can be assessed. Such refinement would require that articles be read rather than scanned, and this would obviously be time consuming (costly). But is it any surprise that a serious assessment of "The Future of Economics" would require more than a cursory look at whether articles contain data?
Posted by: indiana jim at Apr 4, 2008 8:17:30 AM
Zamfir:
With respect to US immigration rules, it is a lot easier to import assistant professors than it is to import workers in other classifications.
For example, there is a finite (and wildly oversubsribed) number of H1-B visas for all professions, and a separate, unlimited pool for professors. Also, the labor certification process is a lot easier, and it's also easier to obtain "exceptional talent" or "national interest" exemptions to the labor certification process for academics, especially for the kind of people hired by the top schools.
Outside of hockey players, academics face the greatest amount of foreign competition of pretty much any profession in the US. That said, the number of Americans getting econ doctorates is much smaller than the annual demand.
And remember, foreigners who did their doctorates in the US already have many of the appropriate culture-specific skills. They are about as employable in the private sector as native doctorate holders, in my experience (excepting the many Chinese with very poor spoken English. It's awful that these guys get unleashed on students in the lecture hall.)
Posted by: Bartman at Apr 4, 2008 10:01:22 AM
They took our jobs!
Posted by: josh at Apr 4, 2008 10:05:14 AM
Bartman, if I misinterpreted Stephen Downes' comment, then I apologize to him. But I honestly do not understand what else this could mean:
At this point, the folly of abnegating a free and equitable public education system for will become sadly apparent.
If that's not referring to the university system, then what is it talking about? The U.S. has a free (if not equitable) system of primary and secondary education, so it must refer to the university system, yes, meaning that it should be free? At least I would think so, but if not, then I do apologize.
Posted by: Curunir at Apr 4, 2008 11:13:52 AM
One reason I've never been tempted to look for a (permanent) teaching position outside the US is that I would not be immersed in the institutional and cultural factors that matter in many ways.
One reason that the current state of graduate education in economics in the US bothers me is that so many new PhDs, seeking positions in US colleges/universities, are not knowledgeable about the institutional/clutural factors in the US. (I once had a colleague who taught money and banking, but who didn't understand why the US is so thickly laden with banking regulations. But he didn't know the history of US banking. Really good, though, on comtemporary monetary theory and an econometric genius.)
But I also would do nothing to restrict the international mobility of economists.
'Tis a puzzlement.
Posted by: Donald A. Coffin at Apr 4, 2008 11:45:28 AM
Curunir; I agree that the statement is rather obtuse, my interpretation could be faulty. Maybe he means "when the US can no longer import its talent, the consequences of having a crappy primary/secondary education system will become more apparent".
That point sort of makes sense, but I think the elite US schools will still be able to attract enough talent from anywhere, and the private primary/secondary school system will generate enough decent students to populate the upper echelons of American society. In terms of the socio-cultural and politico-economic league standings, the gap between the US and the rest of the world will shrink, but I don't think the US will relinquish its position at the top in my lifetime.
Posted by: Bartman at Apr 4, 2008 12:48:18 PM
"I wonder if that's going to start to change due to the recent popularity of economics as an undergraduate major."
I doubt it. Economics has been a very popular major for a long time (2000?). No increase in PhD students yet, as far as I can tell.
I'm also an undergrad econ major who is probably not going to pursue a PhD in economics.
Posted by: Robert Olson at Apr 4, 2008 1:56:52 PM
The 50 or so top "schools" in the US of NWO aspire to international leadership. In fact, I am instructed that "international reputation" is the only measure of quality. Eventually or even soon, the elite faculty will be nearly all foreign born. If such absolute quality is the only measure of acceptance, why are not most of the undergrads also foreign? 95% seems the right target. The schools hardly need the cash. They can live off their trust funds, especially if managed by econ grads of the quality of the denizens of this site.
Why don't the Ivies and ivy-wannabes spurn any lucre from their intellectual (and I dare say social and moral) inferiors and educate only the "best and the brightest" from China, India, and the like. The gain to the next American generation would be manifest.
Posted by: a concerned citizen of the world at Apr 4, 2008 10:09:37 PM
This research is not really news as the data have show for a long time that 70% of U.S. economics PhDs are awarded to foreigners. One of the highest ratios in all disciplines. The reason academia hires more foreigners than other fields is a result of U.S. immigration laws primarily in my view. There is no cap on H1-Bs for people working in academia and non-profits and getting a green card though a very lengthy and hasslesome bureaucratic process is guaranteed pretty much to anyone with a PhD. Also getting the PhD in the US means students spend several years in the country and have an advantage in job application over people coming from outside the country trying to get into other fields. I have an American PhD in geography and was a tenured Associate Prof in economics going through the hassle of getting a green card. In the end I decided to move back to Australia a few months ago...
Posted by: moom at Apr 5, 2008 6:39:15 PM
1) Those uneducated "white" people who are not going into universities, are simply selecting jobs where they can be rewarded by private industry, frankly without working as hard, partly as an underpaid slave to a mediocre PhD sponsor. Also, The PhD in private industry has a negative effect on earning potential. It generally means something bad about the candidate. Instead, and students know this, "A Protestant Ethic and an MBA" are still tickets to wealth, because analytical models describe "IS's" and ethical constructs supported by fairly simple data, describe "shoulds".
2) The statements conflict with the data that shows that we have too many people in grad programs doing too much flawed and irrelevant work. There simply are not the need for more professors, and the plethora of students is simply making the lack of sarcity a depressing factor on potential incomes.
Posted by: curtd59 at Apr 14, 2008 11:41:13 AM
