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Cyclicality and the Labor Market for Economists

Author

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  • Gallet, Craig A.
  • List, John A.
  • Orazem, Peter

Abstract

A multimarket theory of optimal search suggests that job seekers will respond to a weakening market by adjusting their search strategies at the extensive margin (which markets to enter) and the intensive margin (how many applications to submit per market). Meanwhile, employers respond to the weakening market by raising their hiring standards. The equilibrium suggestst that high quality applicants will obtain an increased share of academic interviews in weak markets while applicants from weaker schools will increasingly secure interviews outside of the academic market. Empirical results show that in the bust market, graduates of elite schools shifted their search strategies to include weaker academic institutions, while graduates of lower ranked schools shifted their applications away from academia and toward the business sector. In bust conditions, academic institutions increasingly concentrate their interviews on elite school graduates, women and U.S. residents.

Suggested Citation

  • Gallet, Craig A. & List, John A. & Orazem, Peter, 2004. "Cyclicality and the Labor Market for Economists," Staff General Research Papers Archive 12025, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:12025
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    References listed on IDEAS

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    Cited by:

    1. Boehm, Michael J. & Watzinger, Martin, 2010. "The Allocation of Talent: Evidence from the Market of Economists," MPRA Paper 27463, University Library of Munich, Germany.
    2. Jiale Yang & Qing Wu & Chuanyi Wang, 2022. "Research networks and the initial placement of PhD holders in academia: evidence from social science fields," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(6), pages 3253-3278, June.
    3. Jihui Chen & Qihong Liu & Sherrilyn Billger, 2013. "Where Do New Ph.D. Economists Go? Recent Evidence from Initial Labor Market," Journal of Labor Research, Springer, vol. 34(3), pages 312-338, September.
    4. Price, Gregory N., 2009. "The problem of the 21st century: Economics faculty and the color line," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(2), pages 331-343, March.
    5. Michael E. Rose & Suraj Shekhar, 2021. "Indirect Contacts in Hiring: The Economics Job Market," Working Papers 55, Ashoka University, Department of Economics.
    6. Jihui Chen & Qihong Liu & Myongjin Kim, 2022. "Gender gap in tenure and promotion: Evidence from the economics Ph.D. class of 2008," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1277-1312, April.
    7. Boehm, Michael J. & Watzinger, Martin, 2010. "The Selection of Skills into Sectors: Evidence from the Market for Economists," MPRA Paper 23315, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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