Defining What Makes an Economist

January 9, 2007

A new paper on outcomes of graduate education in economics finds “that there is not an easily recognizable star profile or single path to success for an economics graduate student.” But, in “What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes,” and another paper presented Friday at the American Economic Association annual meeting, economists present no shortage of data on the topic of what factors might play a role in predicting student success in ultimately completing the economics Ph.D., publishing, and landing that coveted tenure-track job at a top 20 program.

In their papers, posted online, the authors present somewhat mixed data on the predictive value of attending an elite undergraduate institution on eventual success in the economics field; suggest that grades the first year of a Ph.D. program matter; and offer evidence to support the perceived “insider advantage” for tenure hires. 

The evidence surrounding the role that a prestigious undergraduate education plays in predicting success raises as many questions as it does answers. A paper by Wayne A. Grove, of Le Moyne College, and Stephen Wu, of Hamilton College, analyzes the application files of all candidates for one "top five" economics Ph.D. program in 1989, and tests whether Graduate Record Examination scores, the prominence of reference letter writers and the quality of undergraduate institutions “credibly signal either Ph.D. completion or research productivity 17 years later.” In “The Search for Economics Talent: Doctoral Completion and Research Productivity,” Grove and Wu find that applicants’ quantitative GRE scores and the prestige of their letter writers -- “but not the prestige of the undergraduate institutions” -- serve to “strongly predict” Ph.D. completion and long-term research productivity.

The authors do note that graduating from a top research university is correlated with having a prominent economist write a reference, but add that the significance of the references applies even when the top research universities and liberal arts colleges are excluded from the analysis. “In terms of the work that’s been done specifically on the economics Ph.D., it is somewhat mixed on the role that undergraduate education plays,” said Grove, an associate professor of economics at Le Moyne.

In fact, the paper on student outcomes of graduate education in economics at the top five programs -- by Susan Athey and Lawrence F. Katz of Harvard University, Alan B. Krueger of Princeton University, Steven Levitt of the University of Chicago and James Poterba, of the Massachusetts Institute of Technology -- finds that while students who attend elite undergraduate institutions do not perform significantly differently than other students, with the “possible exception” of receiving higher grades in macroeconomics, they are “substantially more likely to secure highly ranked positions after graduate school.”

“The effect is large,” the paper says. “Attending a leading liberal arts college is associated with an 18 percentage point increase in the chance of job placement at a ‘top 20’ economics department.”

The paper also found that first-year grades in required core courses strongly predict job placement for graduate students. The authors offer a number of possible explanations, including that successful first-year students cultivate positive "first impressions" with faculty members, that mastering the content of first-year courses helps prepare students for research, and that the traits needed to succeed in the first year, including high cognitive ability and diligence, are likewise important when it comes to writing a dissertation and finding a job.

However, the paper did not find that gender is a statistically significant factor in job placement, although first-year grades for female students are significantly lower than those of males. And, while foreign students have higher than average first-year grades, they don't see a corresponding advantage on the job market. "I think the first year is something of a 'leveling year,' " Krueger, a professor of economics and public affairs at Princeton, wrote in an e-mail explaining the findings. "Students who come in with an advantage because they took more advanced courses previously (including many foreign students and students who already have a masters degree in economics) do better in their course work in the first year of graduate school, but that is no guarantee that they will do better on the job market -- although, in general, students who master the core material tend to [do] better in terms of writing a high quality thesis and job placements later on." 

Admissions committee rankings were not a significant predictor of job placement in the paper by Athey et. al., although they were for Ph.D. completion and first-year grades. And in “The Search for Economics Talent,” Grove and Wu argue that the rankings predict doctoral completion and research productivity and are useful when used in concert with other data. However, the admissions committees are not particularly adept at predicting success for foreign students, Grove said. “For the foreign students, it’s just really hard to judge who has the stuff that it takes. People sit down and they say, ‘OK, here’s somebody’s GRE scores, here’s somebody who wrote letters about this individual, I’m going to give them a 7 out of 10. And then they look at a Chinese applicant, and they have a hard time figuring out what it adds up to.”

In “Is There an Insider Advantage in Getting Tenure?”, the third paper presented Friday in a session on “The Market and Pre-Market for Graduate Students in Economics,” Paul Oyer, of Stanford University, finds evidence to support the “conventional wisdom” that potential senior hires from outside a department are held to more rigorous standards than are junior professors up for promotion. The paper argues that the productivity of “outsiders” is greater than that of “insiders” at all but the top 10 economics programs.

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