Rationality and the Decision to Invest in Economics
AbstractIn the study reported here, we develop a theoretical model of occupational choice which is then specifically tailored to fit the market for economists over time. Economists typically assume that the world is relatively free of informational barriers and that agents carefully process vast amounts of information in making decisions. This study reveals whether economists' own occupational decisions are consistent with this world of rational, calculating agents. Results suggest that tests for the internal consistency of rational expectations and our model of occupational choice cannot be rejected, while the model provides a better explanation of the observed pattern of enrollments than does an alternative that assumes agents naively base decisions only on current wage conditions.
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Bibliographic InfoArticle provided by University of Wisconsin Press in its journal Journal of Human Resources.
Volume (Year): 18 (1983)
Issue (Month): 4 ()
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Web page: http://jhr.uwpress.org/
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- Felderer, Bernhard & Drost, André, 2000. "Cyclical Occupational Choice in a Model with Rational Wage Expectations and Perfect Occupational Mobility," Economics Series, Institute for Advanced Studies 81, Institute for Advanced Studies.
- Ronald G. Ehrenberg, 2002. "Studying Ourselves: The Academic Labor Market," NBER Working Papers 8965, National Bureau of Economic Research, Inc.
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