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The Macro-Foundations of Microeconomics: Initial Labor Market Conditions and Long-Term Outcomes for Economists

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  • Paul Oyer

Abstract

Each year, graduate students entering the academic job market worry that they will suffer due to uncontrollable macroeconomic risk. Given the importance of general human capital and the relative ease of publicly observing productivity in academia, one might expect unlucky graduating cohorts' long-term labor market outcomes to resemble those who graduate in favorable climates. In this paper, I analyze the relationship between macroeconomic conditions at graduation, initial job placement, and long-term outcomes for PhD economists from seven programs. Using macro conditions as an instrument for initial placement, I show a causal effect of quality and type of initial job on long-term job characteristics. I also show that better initial placement increases research productivity, which helps to limit the set of economic models that can explain the effect of initial placement on long-term jobs.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12157.

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Date of creation: Apr 2006
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Publication status: published as Oyer, Paul. "Initial Labor Market Conditions and Long-Term Outcomes For Economics," Journal of Economic Perspectives, 2006, v20(3,Summer), 143-160.
Handle: RePEc:nbr:nberwo:12157

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Cited by:
  1. Douglas Webber, 2011. "Firm Market Power and the Earnings Distribution," Working Papers 11-41, Center for Economic Studies, U.S. Census Bureau.
  2. Sylvia Frühwirth-Schnatter & Andrea Weber & Rudolf Winter-Ebmer, 2010. "Labor Market Entry and Earnings Dynamics: Bayesian Inference Using Mixtures-of-Experts Markov Chain Clustering," Economics working papers 2010-11, Department of Economics, Johannes Kepler University Linz, Austria.
  3. Marcel Fafchamps & Marco J. van der Leij, 2006. "Scientific Networks and Co-authorship," Economics Series Working Papers 256, University of Oxford, Department of Economics.
  4. Wachter, Till von & Bender, Stefan, 2007. "Do initial conditions persist between firms? : an analysis of firm-entry cohort effects and job losers using matched employer-employee data," IAB Discussion Paper 200719, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Ronald Bachmann & Thomas K. Bauer & Peggy David, 2010. "Labour Market Entry Conditions, Wages and Job Mobility," Ruhr Economic Papers 0188, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Till von Wachter & Stefan Bender, 2008. "Do Initial Conditions Persist between Firms? An Analysis of Firm-Entry Cohort Effects and Job Losers Using Matched Employer-Employee Data," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 135-162 National Bureau of Economic Research, Inc.
  7. Paul Oyer, 2006. "The Making of an Investment Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income," NBER Working Papers 12059, National Bureau of Economic Research, Inc.
  8. Hamaaki, Junya & Hori, Masahiro & Maeda, Saeko & Murata, Keiko, 2013. "How does the first job matter for an individual’s career life in Japan?," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 154-169.
  9. Winkler, Anne E. & Levin, Sharon & Stephan, Paula & Glänzel, Wolfgang, 2011. "Publishing Trends in Economics across Colleges and Universities, 1991-2007," IZA Discussion Papers 6082, Institute for the Study of Labor (IZA).
  10. Oreopoulos, Philip & Wachter, Till von & Heisz, Andrew, 2008. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," IZA Discussion Papers 3578, Institute for the Study of Labor (IZA).
  11. Natalia Mishagina, 2007. "Empirical Analysis of Career Transitions of Sciences and Engineering Doctorates in the US," Working Papers 1137, Queen's University, Department of Economics.
  12. Beatrice Brunner & Andreas Kuhn, 2010. "The Impact of Labor Market Entry Condition on Initial Job Assignment, Human Capital Accumulation, and Wages," NRN working papers 2010-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.

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