Tuesday, July 24, 2012

PhDs in gloomy times

If you are nowadays a PhD student in Economics you will be glad to know that according to this paper from Michael Boehm and Martin Watzinger, you are probably going to be a more productive researcher (in terms of academic publications) than if you were graduating in a glorious economic period:

“Economists starting or graduating from their PhD in a recession are significantly more productive over the long term than economists starting or graduating in a boom.”


“It is well documented that graduates enter different occupations in recessions than in booms.” In recessions they move to more stable industries like academics. Therefore, “the quality of talent in a relatively more stable industry [like academics] increases in recession”.

So, this increase on PhD’s productivity is coming from a shift on talented people career decision, from business sectors to academic sectors. Thus, this is a positive consequence of economic recessions, when “talented individuals choose to work in entrepreneurship or research instead of rent-seeking sectors, this may have some social benefits that subtract from the immense adverse effects of downturns”

The data analysis

In the first column, the outcome variable qi,t is the average publication output of a cohort of graduates from university i in year t. In the second column, it is the average propensity to decide in favor of an academic career after the PhD, and in the third column, qi,t is the average productivity of those who stayed in academia after the PhD. Application and Graduation rows takes into account the date of the measurement. Application means that the measure was made when the students applied for the PhD and Graduation when graduated.

Unemployment change, both at time of application and at graduation, has a significantly positive effect on research productivity at the five and one percent level, respectively.

There's something unclear about it. If people graduated in gloomy times are more produtive than those from normal times why are their salaries lower in the long-term? As Oyer said

Sunday, July 15, 2012

More about trade

Hal Varian Chief economist at Google and ex-Berkeley explained easily why everyone wins with trade using the following example:
Imagine a world where American workers could subcontract production to foreign workers on their own. Paul could send an e-mail message with his programming assignments to Avinash every morning and receive the completed work back in the afternoon. In exchange, Paul would buy a money order for one-tenth of his salary each month and send it to Avinash. Paul could take on another job, earning more money, or he could just take it easy. Sound like a good deal for Paul? Of course it is: he would jump at the chance to subcontract on those terms. Even though Paul would hire Avinash to do his job if he could capture the wage difference himself, Paul would still be understandably upset if his employer laid him off and outsourced his job to Avinash. This thought experiment illustrates that the debates about trade are not about whether we should accept those good deals offered to us by cheap foreign labor - of course we should. The debate is all about who will capture the benefits from those deals and who will bear the costs. Ideally, those who benefit the most from trade would compensate those who lose. In practice, virtually everyone benefits to some degree from cheaper goods and services, so compensation for those who lose from trade should come from general revenues.

Sunday, July 8, 2012

Perceptions in Europe

According to a recent Pew Research Center survey, Europe countries have different perceptions of their neighbours and themselves. For example, Greeks consider themselves as the most hard-working country in Europe while the rest consider Germany as the perfect society to live in.

Sunday, July 1, 2012

World Bank data

You may already know this, but the World Bank is an infinite source of data. World Bank Data website offers millions of data. 7,000 indicators for almost every single country in the world. Micro and Macrodata. On social, environmental, economics, governance, policy,.... issues. They offer a data visualizer application and also the application to map all this data including the micro one. These applications are easy-going and fast.