The Hog-Cycle of Law Professors
The market for law professors fulfils the conditions for a hog cycle: in the short run, supply cannot be extended or limited; future law professors must be hired soon after they first present themselves, or leave the market; demand is inelastic. Using a comprehensive German dataset, we show that the number of market entries today is significantly negatively correlated with the number of market entries 8 years ago. This is quite precisely the time young scholars on average take to prepare for the market. To get this estimate, we detrend the data, and we control for the size of student cohorts when these candidates enter university. This control variable mediates the effect of birth cohorts when candidates are born, which themselves exhibit negative autocorrelation, with a lag of some 20 years. Using our statistical model, we make out of sample predictions for the German academic market in law until 2020.
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