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The Allocation of Talent over the Business Cycle and its Effect on Sectoral Productivity

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  • Michael Boehm
  • Martin Watzinger

Abstract

It is well documented that graduates enter different occupations in recessions than in booms. In this article, we examine the impact of this reallocation for long-term productivity and output across sectors. We develop a model in which talent flows to stable sectors in recessions and to cyclical sectors in booms. We find evidence for the predicted change in productivity caused by the business cycle in a setting where output can be readily measured: economists starting or graduating from their PhD in a recession are significantly more productive over the long term than economists starting or graduating in a boom.

Suggested Citation

  • Michael Boehm & Martin Watzinger, 2012. "The Allocation of Talent over the Business Cycle and its Effect on Sectoral Productivity," CEP Discussion Papers dp1143, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1143
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. PhDs in gloomy times
      by Inaki Villanueva in Applied economist on 2012-07-24 23:08:00
    2. [経済]不況期に学位を取得した経済学者は優秀
      by himaginary in himaginaryの日記 on 2012-05-24 12:00:00
    3. The impact of recessions on economist productivity
      by Economic Logician in Economic Logic on 2012-05-22 19:14:00

    Citations

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    Cited by:

    1. Markus Nagler & Marc Piopiunik & Martin R. West, 2020. "Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness," Journal of Labor Economics, University of Chicago Press, vol. 38(2), pages 453-500.
    2. Nagler, Markus & Piopiunik, Marc & West, Martin R., 2015. "Weak Markets, Strong Teachers," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112949, Verein für Socialpolitik / German Economic Association.
    3. Catalina Amuedo-Dorantes & Delia Furtado, 2019. "Settling for Academia?: H-1B Visas and the Career Choices of International Students in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 401-429.
    4. John P. Conley & Ali Sina Önder & Benno Torgler, 2016. "Are all economics graduate cohorts created equal? Gender, job openings, and research productivity," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(2), pages 937-958, August.
    5. Conley, John P. & Onder, Ali Sina & Torgler, Benno, 2012. "Are all High-Skilled Cohorts Created Equal? Unemployment, Gender, and Research Productivity," Economy and Society 142954, Fondazione Eni Enrico Mattei (FEEM).
    6. John P. Conley & Ali Sina Önder & Benno Torgler, 2012. "Are all High-Skilled Cohorts Created Equal? Unemployment, Gender, and Research Productivity," Working Papers 2012.86, Fondazione Eni Enrico Mattei.

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    More about this item

    Keywords

    Talent allocation; sectoral productivity; business cycle; roy model; PhD economists;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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