The Allocation of Talent: Evidence from the Market of Economists
نویسندگان
چکیده
Recent research in labor economics has highlighted the substantial and long-lasting adverse effect of recessions on employment prospects and earnings. In this paper, we study whether individuals react to these shocks by changing career paths and thereby affect the selection of talent into sectors. More concretely, we examine how the publication success and career choice of graduates from the leading US economics PhD programs varies with the state of the business cycle at application and at graduation. Our results strongly support the predictions of a Roy-style model of self-selection into sectors: We find that adverse macroeconomic conditions at application lead to a substantially more productive selection of individuals into academia and at graduation they lead to more PhDs deciding to stay in academia. JEL Classification Numbers : J24, J44, I29 * London School of Economics, Department of Economics, London. ** University of Munich, Department of Economics, Munich. Akademiestr. 1, 80799 Munich, Germany; [email protected]. We thank (in alphabetical order) Oriana Bandiera, Ziad Daoud, Luis Garicano, Radha Iyengar Dirk Jenter, Daniel Metzger, Paul Oyer, Joern-Steffen Pischke, Andrea Prat, and Monika Schnitzer for helpful suggestions. Marco-Alexander Schwarz and Rafael Winterhalter provided invaluable research assistance. Furthermore we want to thank the SFB-TR 15 of the German Research Foundation for financial assistance and JSTOR for providing their Data for Research interface. All remaining errors are our own.
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