For students

Deep thoughts
Offered with the recognition that I am often wrong. Please weight appropriately.

On economics:
  • Economics is useful preparation for jobs in public policy, urban planning, education, environmental non-profit work, and other fields not commonly associated with the discipline. It need not be a pipeline to finance and consulting.
  • Thomas Carlyle named economics "the dismal science" in an essay called, "An Occasional Discourse on the Negro Question." He disagreed with anti-slavery economists like John Stuart Mill, who argued that incentives and institutions, not racial differences, explained patterns of wealth and poverty.

On learning:
  • My respect for a student is not contingent on ability.
  • Mathematical ability is malleable. You can improve with practice.
  • You need not be the best at something to contribute valuable work, or to enjoy it.
  • Inputs are important. Carefully plan your study and allocate enough time to execute your plan, rather than allowing others to dictate your course.
  • If you never volunteer an incorrect answer in class, you aren't taking enough risks.
  • It is not only normal, but good and useful to begin a problem with no idea how you will solve it. If you train yourself to respond to a tough problem with patient fascination, rather than fear of failure, that will serve you well.
  • If you get stuck on a problem, try to formulate a narrow, well-defined question that will help you make progress. Go slowly and write the question down. (You may need to review notes or books order to write it.) Then find someone to ask.
  • A challenging class in which you earn a B will be more valuable to you than an easy class in which you earn an A. In the long run skills are far more important to your career than GPA.
  • Economist Chris Blattman wrote a good college advice column. I agree with his recommendation to avoid foreign language classes. It is much more efficient to learn languages abroad.

On jobs:
  • The economics department maintains a helpful list of organizations that hire workers with economics degrees. (Be sure to click on the bar that reads "Examples of Economic Policy Research Jobs" at the bottom.)
  • The department includes job listings in its email newsletter. I recommend you read it.
  • Suppose a competitive labor market equilibrium such that all workers enjoy equal utility (at least conditional on ability). What does that imply about the non-wage attributes of highly paid jobs?
  • Succeeding in a risky endeavor is much more satisfying than succeeding in a safe endeavor.
  • Youth is a good time to take risks, because you have many years to enjoy successes and recover from failures.
  • Resist the urge to take an unsuitable job because uncertainty bothers you, or because your friends have taken jobs. A job search is a matching problem, and a bad match may be worse than seeking out another opportunity.
  • Most students only know about a handful of fields when they finish college. That means the expected return to trying a new field yourself, or carefully interviewing someone in that field, is high.
  • When choosing a job, consider what you will actually do over an 8- to 10-hour day: call clients, visit homeless shelters, attend meetings, fire ceramics, draft legislation, make presentation slides, etc. Ask yourself how you want to spend your time.
  • If a corporate recruiter promises a job will develop "skills" or prepare you for a different job later in life, press for details. Some skills are valuable (in both market and non-market senses of the word), while others scarcely deserve the name. What have past workers actually gone on to do? Keep in mind selection bias: former employees of a firm may fare well because they initially had high ability, not because they acquired useful skills on the job.
  • Economic theory predicts that the cost of learning skills that are not firm-specific is borne by the worker in the form of lower wages, not by the firm. The intuition is that the firm doesn't want to pay for a worker's training, only to have her take those skills elsewhere soon thereafter.
  • Research finds that high financial-sector salaries may reflect rent-seeking, meaning redistribution of social surplus rather than creation of additional social surplus. In other words, these jobs often involve exploiting market imperfections to take advantage of smaller or less-informed participants. The US financial sector may actually be less efficient today than in the past.
  • Active investment management is typically sold based on a fraudulent promise of higher returns. In fact active management generally produces lower returns than a market index, particularly after fees. If your broker has a genuine, repeatable stock-picking skill, why doesn't he just spend the day managing his own money?
  • The expected return to online job applications is typically very low. If you can make telephone or personal contact with someone at your target organization, that will substantially increase the likelihood that someone reads your application carefully.

On graduate school in economics:
  • My undergraduate advisor told me, "Never do a PhD if you could be happy doing anything else." It was good advice, not because PhD programs are terrible, but because there are many good jobs available with a bachelor's or master's degree.
  • The AEA has some useful advice on graduate school preparation here, including suggested mathematics courses.
  • Before you apply, I recommend you read David Colander's book The Making of an Economist, Redux. Based on surveys of and interviews with economics graduate students, it gives a realistic year-by-year picture of economics graduate school. In my view it slightly overemphasizes the nastiness and competition among students; one can avoid much of this by choosing a program with a friendly culture. You can find a shorter Colander article with some of the same material here.
  • In general, recommendation letters matter more than any other element of your application. If you are seriously considering graduate school, you should spend at least one semester (or summer) as an economics research assistant.
  • If you lack some of the required preparation or aren't sure whether graduate school is for you, consider an entry-level research job (e.g. places like this). You can build skills, perhaps take a class on the side, and observe the work done by economists. Ask yourself whether you would be happy doing what they do every day.
  • Investigate the placement records of programs to which you are admitted, and assess your career prospects realistically. Would you be happy with the median placement? RePEC ranks programs by student research success here.
  • RePEC's rankings of "Top institutions by field" (follow the link, then scroll down a lot) provide some guidance on which departments might match your interests. There is noise in these rankings, and sometimes they lag behind a department's current strengths.
  • Choose a department with at least two plausible advisors, in case one leaves. Junior faculty are fine as committee members but your primary advisor (committee chair) should be tenured (associate or full professor).

Other topics:
  • Consider the costs, as well as the benefits, of your screen time. This includes the opportunity cost! Was that hour of desultory web browsing really the best use of your time? I suspect many of us would be happier, more focused, and more productive spending less time online.
  • Before engaging in a transaction, consider the position of your counterparty. What are her goals? How much information does she have? How might her incentives slant the claims she makes? Is it plausible that a mutually beneficial trade between the two of you exists? This is relevant for transactions like home purchases, job offers, and matriculation into graduate school. 

Economics and policy media
Books on economics and applied statistics
Other media
  • In Our Time, BBC Radio 4. A wonderful discussion program ranging from history and literature to mathematics and science.