It's hardly a secret to anyone who's worked in an economics department: some students enrol in economics because they want to study something that seems vaguely useful, but they don't have the grades, or the mathematics and language skills, to make it in business or engineering.
Economics programs typically have relatively few essay requirements, and require little by way of verbal skills. Relative to traditional arts and humanities subjects, the reading lists are short and manageable. The math gets challenging at more advanced levels, but most of undergraduate economics requires nothing more than high school level calculus. My third year course (open to non-majors) requires about grade 10 or 11 level algebra.
As a result, at most Canadian universities, economics attracts some students who are not strong academic performers (if they were, they were be in their first choice, business), and who don't have much intrinsic interest in economics. They just want a qualification that will help them to get a job.
At this time of year, while I'm marking final exams, I despair for them, yet I'm sympathetic to their plight. Is it so unreasonable for them to expect to get some useful, job related training at a university?
I'm attempting to teach the knowledge and skills that a person would need to analyze policy - to be an economic journalist, a policy analyst in government, to work at a think tank. It's job related training - but for a particular, highly specialized type of job. Why do markets fail? Do programs like the Working Income Tax Benefit increase work incentives? What are the impacts of introducing school voucher programs? How does Canada's equalization program change people's incentives to migrate between provinces, and impact economic efficiency?
Realistically, the students who are struggling to pass third year economics courses are never going to be policy analysts or economic journalists. So what am I teaching them that would help them in the job market?
I wouldn't hire someone in an office job unless they could write a memo relatively free from spelling and grammatical errors. But I don't teach spelling and grammar. Like just about everybody else in the university system, I figure that's not my job. If students want to improve their English skills, they have to pay for special English-language classes. (I could force people to improve their English by taking off marks for every single spelling or grammatical error, but this hardly seems like a way to help and nurture new Canadians and international students either).
I don't teach students anything that would help them to run a business - no accounting, nothing about hiring or firing workers, or human resource management. It's not that I think these things are unimportant - I am very glad that, back in the day, I took some courses in accounting, and would highly recommend them to anyone. But I can't teach accounting. Ironically, it is precisely those useful courses, the training type courses that would help a moderate student find a job working in a financial institution or small business, that students are being shut out of, because business schools have relatively high admission requirements and restricted enrolments.
My students want to learn about the macro economy, about what makes the economy grow, what makes businesses more profitable, what drives innovation. I teach mainstream microeconomics, which means I don't talk at all about the macroeconomy, or jobs and growth. Profits? In a competitive market, economic profits are equal to zero. Innovation? Technology is exogenous, outside the model.
Why not? Well, there is the problem of me being a micro person, but I could fake it. More seriously, there are two ways to talk about the macro implications of specific policy proposals. One is the simplistic "Increasing the size of the Canada Pension Plan Investment Fund increases savings which increases investment which grows the economy." Sure one can say these things - and it sounds great, and so convincing - but is there any evidence? Any sound theory? No. The other is the incredibly complex: "Increasing the size of the Canada Pension Plan Investment Fund would require increasing premiums, which might or might not crowd out private savings. And then there is the question of how the CPP investment fund is invested - can overseas investments, or investments in real estate, really be thought to grow the Canadian economy..." Then we're back to square one - material that just goes right over people's heads.
I called this post "The dirty secret of economics education". But, in fact, it's the dirty secret of post-secondary education more generally: we're teaching students what we want to teach. Sometimes that's what students want to learn. Sometimes it's not.
Business more academic than economics? The very opposite is true in the UK.
Posted by: Britonomist | December 18, 2012 at 10:39 AM
Britonomist - generally, business programs have higher admission averages than economics ones, yes. I wouldn't equate that with being more academic, but anyways.
The UK has that complicated history where business is tainted because of its historical association with polytechnics (plus the traditional British distain for being "in trade" - all those snide remarks in Jane Austen about uncles or ancestors who are in trade).
Posted by: Frances Woolley | December 18, 2012 at 11:00 AM
"The UK has that complicated history where business is tainted because of its historical association with polytechnics (plus the traditional British distain for being "in trade" - all those snide remarks in Jane Austen about uncles or ancestors who are in trade)."
Very true. Still, I remember seeing a breakdown of majors by admission test scores in the US, and econ ranked amongst the highest, well above business, maybe Canada is just different?
Posted by: Britonomist | December 18, 2012 at 11:10 AM
Britonomist - it would depend whether you included community colleges or not. That would make a huge difference to the #s. I suspect the US data would include colleges, but Canadian data wouldn't. This is an issue specific to the university sector.
Posted by: Frances Woolley | December 18, 2012 at 11:13 AM
Britonomist - I think you might be thinking of this, on LSAT scores of economics majors? http://www.potsdam.edu/academics/AAS/Phil/upload/LSAT-Scores-of-Majors.pdf? The students I'm writing about wouldn't be writing the LSAT.
Sample selection bias.
Posted by: Frances Woolley | December 18, 2012 at 11:16 AM
If I were an economics student, I would be in a state of academic- existentialism after reading this. Its more depressing than gender and population aging to the average 20something- jobsearching-almost graduated-econ undergrad.
Posted by: Sheliza | December 18, 2012 at 11:29 AM
Nice post Frances, this basically sums up my academic career. Went into mathematics originally and couldnt hack it, dropped out for a bit, went back for economics because it was "easier" and it was something I was becoming more interested in. Around third year I realized it was going to be a tough job market coming out with just a BA in economics for the exact reasons you state, I had no technical skills that would make me stick out from an average arts BA (not many businesses need mediocre econometricians). Luckily I made it into grad school and am now working doing policy analysis in an economic unit for the government. I cant say thats true for many people I've met who are now graduated. Many of them, even friends from my grad program, are unemployed or underemployed and it seems like its a hard position to get out of as your resume quickly becomes more important than your academic credentials.
Not sure if there is a solution. There must be general business programs in college that would benefit the average B student more than an econ BA. It would be really useful to have a course that teaches you advanced excel techniques and technical writing, I think that would interest most business owners and would have been the skills I have found would have been most useful in the work place.
Posted by: Ian Lippert | December 18, 2012 at 11:43 AM
Sheliza - It's not every student. I'm enormously proud of all of my former students who are doing great things like working in the federal government's accelerated economist training program, going off to law school, working as profs in policy schools - as well as students who are teaching English abroad or working in banks or working in the trades or running small businesses but enjoyed studying economics.
After all, a lot of specific training is pretty useless too - whatever computer program I teach students now will probably be obsolete in 10 years time - so there is a huge amount to be said for teaching general analytic skills.
But, yup, I'm a parent, and I worry about my kids' futures.
Posted by: Frances Woolley | December 18, 2012 at 11:45 AM
Anecdata time!
- I can second the observation of economics being considered more academic and selective than business in the UK. Or management, the other go-to.
- I have been told, by multiple independent sources, that thirty years ago economics was considered a degree for students that couldn't possibly pass anything else in Malaysia and Singapore. Today that has reversed. Correspondingly the content has become much harder. The speculatory reasons given by my sources all differed. I'm not really sure what this suggests, myself.
Posted by: david | December 18, 2012 at 11:55 AM
Ian: "It would be really useful to have a course that teaches you advanced excel techniques and technical writing, I think that would interest most business owners and would have been the skills I have found would have been most useful in the work place."
I've started to include at least one Excel exercise in my second and third year courses. I get people to write an essay and do technical writing in the 4th year seminar course. So it's not all bleak. But there is a trade-off: if I'm doing Excel training and technical writing I'm not teaching public policy. Plus, I kind of feel that with 4 required courses in statistics and econometrics, students should get some Excel training there (they get some, but I don't know how much).
Plus there's the practical matter: if I've got a student who's a journalism major, and a student who is struggling to get by as an ESL student, how do I evaluate the two in terms of their technical writing? Do I hold them to the same standard? How to I design a curriculum that's appropriate for both?
Posted by: Frances Woolley | December 18, 2012 at 11:55 AM
Remarkable than an economists would say this out loud.
Note well -- it is economists who have turned economics into a joke of a subject to teach, and they did this because of a fake model of 'science' and because they wanted to create something easy to grade.
So via Samuelson and and rest it became something like teaching baby engineering to undergraduates.
Economists can teach students whatever they want to teach them -- they've chosen to teach them junk 'science'.
Posted by: Greg Ransom | December 18, 2012 at 12:10 PM
Peter Boettke actually teaches students to think economically in a many that improves their cognitive skills.
Boettke was fired by NYU after receiving the campus-wide award for undergraduate teaching.
This tells you all you need to know about what the profession of academic economics is all about.
The internet & technology can't kill the university departments soon enough.
Posted by: Greg Ransom | December 18, 2012 at 12:14 PM
Greg: if you were in my third year course, you'd find I covered topics far from the fake model of science you decry - we spend a huge amount of time talking about market failures, about the role of government intervention in the economy, about public choice, interest groups, rent-seeking, bureaucracy, etc etc etc. It's great stuff. You'd probably love it, given that you're on this blog and here reading.
But it's not for students who are looking for practical training on how to run a business - though they probably enjoy it much more than they would if I assigned them the latest issue of the Real World Economics Review to read - now that they would really struggle with! (I've tried assigning feminist readings in the course on gender and economics in the past).
Posted by: Frances Woolley | December 18, 2012 at 12:19 PM
On the plus side, economics courses almost always involve learning how to engage in deductive logic. If someone isn't a strong student, I can think of worse ways they could spend their college years. I think economics education still makes people better off, even if it doesn't translate into directly applicable skills.
To say nothing of the fact that every economics instructor I've ever met has demonstrated a passion for imparting these deductive logic techniques to their students.
Posted by: Ryan | December 18, 2012 at 12:20 PM
Ian: "There must be general business programs in college that would benefit the average B student more than an econ BA."
My father devoted his entire academic career to teaching in one and, yes, I think he got an enormous amount of satisfaction from the fact that he knew he was delivering something of value to students - and from seeing his students, who were often new Canadians who couldn't afford university - go on to make better lives for themselves.
Posted by: Frances Woolley | December 18, 2012 at 12:23 PM
Ian - I'm not talking about the average B student. I'm talking about the average C/D student here.
Posted by: Frances Woolley | December 18, 2012 at 12:24 PM
Ryan - yup, I agree. But suppose I'm starting out assuming students are at level 4, and trying to move them up to level 5 or 6 or 7. What happens to the student who starts out at level 1 or 2. Do they get anything useful out of it at all?
Posted by: Frances Woolley | December 18, 2012 at 12:26 PM
My wife has a law degree, a business degree and an economics degree from top universities.
She knows the law, she knows business, and she knows math, but I wouldn't say she remembers much of any economic math or remembers much about what any of was all suppose to prove.
Indeed, she got a better grasps of the fallacies and pathologies of most economist's models of 'monopoly' from her law professors.
Posted by: Greg Ransom | December 18, 2012 at 12:27 PM
Great post, although I don't think you need to target economics education, what you've identified is probably not a phenomenon that's unique to economists, though I'd suggest that the self-awareness it demonstrates might be less common in some other academic disciplines. While I have a certain intellectual sympathy for those academics who say "look, it's not our job to provide practical skills, that's not what universities are for" (which view I've heard, in particular, from some the flakier social sciences and humanities), the reality is that isn't what universities (and politicians, and parents, and guidance counsellors and high school teachers) tell their potential students (Do universities advertize, for example, that their classics graduates include some of the best educated barristas in the country? Or do they find the one classics graduate who became the CEO of a bank and put his or her picture in the recruitment brochure?).
I think you identify two of the bigger problems with the modern post-secondary education system. First, there are a lot of students who, frankly, should not be in university, and I think they're probably a big chunk of the people you describe. It's not that they're not smart (although some of them are likely not as smart as their previous educational experiences might have led them to believe), it's just that they lack the interest in, or enthusiasm for, the field they're studying (or any other field that their university offers). As a result, they don't get much intrinsic value out of an expensive (both for them and for society) 4-year degree. And if everyone's going to unversity, it loses whatever signalling value it might have had as an indicia of general ability. These are people who might well benefit from some form of post-secondary education, but something less (and less expensive) than that offered by the traditional university. Mind you, to implement that would entail a massive shift in resources from the traditional universities to colleges or the sort of university colleges they have in BC, which I don't see going over all that well with the stakeholders in the traditional universities.
Second, I think you're observation about correcting spelling and grammar, while probably typical of the practice at most universities and departments (including UofT when I was a TA there), I think undermines the one practical skill that a traditional university education does provide - namely to think, write, argue and communicate coherently. While your observation that penalizing grammar and spelling might not "help and nurture new Canadians and international students" is well-intentioned, I'm not sure that it's true. After all, the reality is that they will be expected to communicate with a degree of coherence when they graduate (the same might be said about meeting deadlines, another soft skill that universities have been slipping on - I'm fairly certain that I once got an A in a philosophy course because I was the only student to hand my term paper in on time, and the professor couldn't fail the rest of the class). Far better to call their attention to issues like spelling and grammar in first year, in a university setting with resources (like a writing center) to help them, then to let it slide, and have them wonder why they can't get a job interview when they graduate (since many employers, such as my own, toss applications with serious typos, spelling and/or gramatical errors into the "do not call" pile). Granted, it would be far better if these issues were addressed in high schools, but that's a different matter.
Posted by: Bob Smith | December 18, 2012 at 12:33 PM
"Greg: if you were in my third year course, you'd find I covered topics far from the fake model of science you decry - we spend a huge amount of time talking about market failures, about the role of government intervention in the economy, about public choice, interest groups, rent-seeking, bureaucracy, etc etc etc. It's great stuff. You'd probably love it."
Frances, I'm guessing I would enjoy it. From your posts here, I'm guessing I'd enjoy any class you taught.
What I'm thinking of are the intermediate and upper division micro and macro textbook courses taught in most universities.
I'm coming from a scientific explanatory paradigm -- Coase, Hayek, Boettke -- which identifies textbook economics as providing essentially a false picture of the economic process, a picture which assumes a false picture of explanation and causal processes.
And that is even before we get to the question pedagogics -- what sort of teaching practices produce deep and lasting understanding and comprehension skill.
Memorizing the math models and then forgetting it all the in 3 years isn't it (studies actually show that most graduates have forgotten most of the economics and economic math they were taught in just a few short years.)
Posted by: Greg Ransom | December 18, 2012 at 12:36 PM
"Indeed, she got a better grasps of the fallacies and pathologies of most economist's models of 'monopoly' from her law professors."
Oh dear, if she's learning about economics (or its fallacies) from law professors... that's kinda like taking economics lessons from David Suzuki.
Posted by: Bob Smith | December 18, 2012 at 12:45 PM
There is a tension in economics between teaching the 'tool box' and teaching people to think economically and to help people understand the real world.
What wins out for a variety of reasons is simply teaching the 'tool box'.
And eventually the 'tool box' comes to be understood in a fashion that:
1) isn't compatible with the economic way of thinking
2) blocks people from understanding the real world
Examples
When blogger Scott Sumner goes on and on discussing things as if 'utils' were real entities what were actually economized and which were intersubjectively comparable, Houston, we've got a problem. The problem is ageless and well documented in academic economics.
How does 'tool box' economics block people from understanding the real world? Let me count the ways ... I'll give one example here -- the mistakes in finance of the psst generations using 'rocket science' models assuming 'given' probability distributions and 'given' uncertainty terms, and no fat tails. A number of books in recent years have been written on the topic. The basic mistake has been duplicated when it comes to thinking about central planning, monopoly, competitive markets, anti-trust, utility price regulation, the Coase Problem, and on and on.
Posted by: Greg Ransom | December 18, 2012 at 12:51 PM
When I graduated from undergrad econ at a prestigious Canadian school, the head of the department had a sit-down-type-thing with a bunch of the graduating students to get feedback. One brave soul said that he feels like he hasn't learned any "skills" like his friends in business, who might know how to use, say, Microsoft Access. He suggested doing more of "those kinds of things" throughout the econ degree instead of forcing students to take econ history or a bunch of options within econ.
The response? "Well, there are vocational schools and there are universities. Access if just a database, so if you want to learn Access go learn Access! We don't teach how-to courses at universities." It seemed like a reasonable response, but in line with the original post, it makes people feel ripped off when they apply for jobs and see something like "Experience with Access or SQL an asset" and they have no idea what that means.
Posted by: Dan | December 18, 2012 at 12:54 PM
Doing an Economics undergrad in Canada isn't that bad of an idea. I was originally thinking of doing economics when I was in university but after a short time I came to realize the courses were not very challenging and I frankly felt rather embarrassed about being in some so soft as economics while most of the rest of my university friends were in engineering, math, computer science.
I switched into doing math and computer science and in the long run this was a huge mistake because whereas in economics I could easily get very high grades in math I mostly got B's and a few A-'s. In the end had I stuck with economics it would not have been difficult to get into a good grad program whereas with my math degree I ended up completely unemployed and basically stuck.
As for business, I wasn't aware this was supposed to be an "elite" field. I'm afraid to say the content I've seen of these business courses doesn't seem to take much in the way of intellectual fire-power, I don't see these students doing more than memorizing buzzwords and silly charts. Perhaps the accounting courses are more difficult, I don't know.
Posted by: CBBB | December 18, 2012 at 12:59 PM
At the U. of Washington Paul Heyne taught at class on The Economic Way of Thinking.
The class at bottom focused on the role of alternative costs in making sense of life and the world.
Many students thought the class the most valuable and eye opening class they'd taken in college.
It was stuff they didn't forget.
People talk about Milton Friedman's class on Price Theory in the same way.
Heyne was essential teaching the baby economics of Wieser & Hayek, with great examples.
Friedman was essentially teaching the baby economics of Marshall with endless challenging examples.
That's not teaching the 'tool box', that's teaching thinking economically.
It's most verbal and critical thinking and takes dedicated and focused teaching.
People talk about the University Economics course of Armen Alchian in a similar fashion.
Does this paradigm for teaching economics still exist in academia?
Posted by: Greg Ransom | December 18, 2012 at 01:02 PM
"As for business, I wasn't aware this was supposed to be an "elite" field. I'm afraid to say the content I've seen of these business courses doesn't seem to take much in the way of intellectual fire-power, I don't see these students doing more than memorizing buzzwords and silly charts. Perhaps the accounting courses are more difficult, I don't know."
I'm not sure it's an "elite" field, so much as one that is in high demand (which isn't quite the same thing), meaning that business programs generally have a higher (often significantly so) admission threshold than your average humanities or social sciences program. While I'm with you that your typical business program isn't neccesarily particularly intellectually challenging (and, lest I be accused of crapping on business schools, I think the same might be said of law as well), I think it does impart valuable practical skills on its graduates. Certainly, in my experience, there are often noticeable differences in the skill sets between my colleagues with a business background, and those with other backgrounds.
Posted by: Bob Smith | December 18, 2012 at 01:16 PM
Seems like this is striking at the core question of "What's the point of a University." If we see a university degree as being a base job skill, we run into trouble, because universities aren't structured to teach job skills. That's why we have community colleges and technical schools. Universities are more structured to teach thinking skills, the ability to build on what we already know, rather than teaching any specific skill. If students are not bright enough to take whatever you're teaching them and figure out how to go beyond that, then they're really in the wrong place.
And if these mediocre students think they'd do any better with a business degree, they'd probably be disappointed. With an accounting specialty, sure. Accounting, let's face it, (and I say this as an accountant) are really more like a trade than we like to admit. But a generic business management degree doesn't qualify you for any jobs out of the gate. Nobody hires managers with no experience, and a generic management degree doesn't confer any skills useful to entry level positions. My wife found this out the hard way, and ended up going to law school in order to get an actual job qualification.
Posted by: Neil | December 18, 2012 at 01:38 PM
The problem you note is certainly not unique to economics programs. It has a lot do with universities and their role, and the fact that they have acquired a tangle of intangible and incoherent symbolic value (locus of bourgeois values, vanguard of society, prestige, equalizer, builder of elites, etc.) that no one can resolve. The question is why a plausible alternative has not really emerged.
Neil, it's true that community colleges and tech skills fill this role, but only in relation to the transfer of knowledge. What they don't convey is prestige. There are praiseworthy people who don't give a rat's a$$ about that (electricians, MRI technicians, etc) and they will have jobs for life. But for the 19 year-olds that have been reared on bourgeois pseudo-intellectual values of watching the CBC, having lots of opinions, appearing cultured, etc., that kind of option involves what many perceive as a step down.
Posted by: Shangwen | December 18, 2012 at 02:01 PM
A modest proposal: Stop wasting students' time teaching MV=Py, Y=C+I+G, AS/AD, IS/LM, and start teaching more finance. Students appreciate learning about long/short positions, calls and puts, forwards/futures, interest arbitrage, etc., and these are things that most economists are well-equipped to teach.
Posted by: Mike Sproul | December 18, 2012 at 02:15 PM
Shangwen - I think this is a huge issue for immigrant parents (and, by extension, their children) who come from countries where manual labour is poorly paid and stigmatized. That can't imagine that becoming a carpenter or an electrician or a plumber would be a pathway for their child to become a successful and economically secure entrepreneur.
Posted by: Frances Woolley | December 18, 2012 at 02:21 PM
I have to get my marking finished. Will comment later.
Posted by: Frances Woolley | December 18, 2012 at 02:22 PM
My understanding of the earnings situation of economics grads is that they don't do too badly, at least in comparison to the rest of Arts and the Social Sciences, so perhaps we are producing something of value.
On the question of practical skills, our program does require an IT course, in which they learn Excel skills among other things. We also have a required research methods course in which they are exposed to writing a variety of types of reports and some practical things like how to access CANSIM and so on. I think we can do that kind of thing. What surprises me as I look about is how few programs seem to.
Posted by: Jim Sentance | December 18, 2012 at 02:37 PM
Is it correct that in the 1950's and 1960's in Canada (maybe the US too?) business was the easy program to get into? That it only became fashionable in the late 1970's/80's?
A couple of vague thoughts:
Maybe there is some stuff we are teaching them that is very important that is just so commonplace to us we don't even realise how important it is. Like opportunity costs. Comparing costs and benefits.
Mike Burns asks and answers a closely-related question: "What does Business want from Economics?"
Posted by: Nick Rowe | December 18, 2012 at 03:45 PM
@Greg That paradigm is rare in any field, not just economics.
When I was doing my degrees in English Literature, I was furious—furious—at how much time we wasted on biography. What's the point of learning about where the author lived? We could be THINKING!
When I was doing my M.A. in English Literature, I prepared a long, thoughtful seminar on a poem that went on about the poem's analysis of society and the utopian impulse, and, when I was done, the first question was, "I didn't hear you say what city this author was born in."
That's the exact moment I decided to turn down the offer of a spot and funding for a PhD.
Posted by: Daniel I. Harris | December 18, 2012 at 03:46 PM
To be fair I came out of economics with few practical skills but I did come out with a very important skill, the ability to learn a lot of material at a rapid pace. I came into the office environment with zero skills in excel but my learning ability acquired from university allowed me to basically learn any excel skills in short notice that were required by the projects that my supervisor put me on. It's practically a cliche but learning how to learn can be one of the most important skills and if you are really good at that you don't really need any practical skills (barring stuff required for certifications like CFA, CA, etc)
I think the problem with Econ is that there really aren't that many electives and there isn't necessarily the demand from students in any specific area. I specialized in finance and so I did learn stuff about accounting, option pricing, etc but not everyone is in economics for that specific program. This means that the department has to spread its resources thin to accommodate other fields in economics that portions of the student popullation might be interested in such as history, labour, industrial organization, etc.
Posted by: Ian Lippert | December 18, 2012 at 04:26 PM
"But for the 19 year-olds that have been reared on bourgeois pseudo-intellectual values of watching the CBC, having lots of opinions, appearing cultured, etc., that kind of option involves what many perceive as a step down."
I think it's more fundamental than that. Your average high school student lives in an environment populated with people with university degrees - how many teachers are there without a university (other than Teacher's college) degree? 50, 60 years ago, your average teacher might have had a year at Teacher's college (normal school) and a high school diploma. Now, your average teacher will have, at least, an undergraduate degree, a 1 (or, in some province, 2) year teaching degree and possibly (given the inexplicable predilection of school boards to pay for credentials) a master's degree. A high school diploma and a teacher's certificate was apparently enough to equip the "Greatest Generation" to fight Nazis or put a man on the moon, but I guess it's not enough to train the current generation of kids. Apart from the momumental waste of societal (and private) resources associated with that sort of educational overkill, is it any wonder that your average high school student graduates thinking that she needs a university degree (even if a "less prestigious" career path might be better suited for them and provide better opportunities) when the only non-university graduates they meet in schools are the janitor and the secretary?
(That isn't intended to be a knock on teachers - although I'm a bit miffed at today's strike. The University route is the career path that they know, it's natural to expect that they'd encourage their charges to follow-it.)
Posted by: Bob Smith | December 18, 2012 at 04:26 PM
What if economics was "professionalized" in the way that accountancy, law, densitry and medicine have professional associations that certify the "quality", skill or knowledge of its members (and restrict competition)? Even a non-regulated professional body, similar to CFA Institute, or the Canadian Council of Human Resources Associations, might be able to raise the profile of economists as practicing professionals. That, in turn, could raise the quality of your average economics undergraduate student, particularly if post-grduation professonal salaries were to increase as well. Economics departments could then afford to be more picky about who they admit as students.
I suspect that one of the reasons professionalization might not work, given the small number jobs in industry for economists, and the dominance of academia as the preferred destination for economics graduates.
Posted by: Robillard | December 18, 2012 at 04:34 PM
@Nick: "Maybe there is some stuff we are teaching them that is very important that is just so commonplace to us we don't even realise how important it is. Like opportunity costs. Comparing costs and benefits."
Didn't you have a post once, something about "why everyone should take ECON 1000"? I don't think the point of that post was that everyone should understand opportunity costs, and how to compare costs and benefits - but it could have been.
Look, by standard criteria I'm not a bad prof - close to a smiley face on ratemyprofessors, teaching evaluations at or above the departmental norm. But I'm failing to convey these ideas - e.g. benefit/cost analysis - to a significant percentage of my students. They deserve to get something useful out of their post-secondary education, and I don't know if I'm delivering it to them.
B.t.w., that post by Mike Burns which you link to starts from a similar place: "Despite globalization and the associated increased need for understanding of the real and financial processes at work in the global economy, since the 1950’s there has been an ongoing significant and worldwide fall in the number and quality of undergraduates studying for an economics degree. Surprisingly, responses by the economics profession have included very little serious consideration of the factors underlying the actual and potential demand by business for their product."
@Dan - yup, I understand exactly those dynamics. I think it's exacerbated by the fact that a lot of profs are completely self-taught when it comes to computers and word processing (except perhaps that Cobol course we took as undergrads - ah, I remember the day when someone managed to write an infinite loop in computing class and crash the SFU system.) We think "I picked up Excel/Stata/R/Outlook on my own, why should anyone have to take a course in it?" Also, the kind of teaching facilities that one would need to do this kind of teaching - labs with good powerpoint projector systems, for example - are seriously lacking.
@Bob "Mind you, to implement that would entail a massive shift in resources from the traditional universities to colleges or the sort of university colleges they have in BC, which I don't see going over all that well with the stakeholders in the traditional universities."
Er, yes, which is why I hesitated before posting this, and am just hoping not too many people are reading.
The writing thing is a difficult one. You can hear more of my views on this on this CBC radio show: http://www.cbc.ca/babel/episodes/2012/06/27/how-important-is-spelling-these-days/. In fact the BC colleges are going the other way, all going towards being universities and forsaking their traditional mandates. Which I think is a real pity.
@Daniel - English is another subject with all sorts of fascinating and conflicting dynamics. I'm not even sure what English is these days.
@Jim - interesting on the IT course and the research methods. I do some related things in the 4th year seminar. On the earnings of econ grads. Corrected for gender? Also, I think returns to different degrees are changing over time - 2006 census data on earnings by degree, which is driven primarily by the experience of people who graduated 20 or 30 years ago, may be a misleading guide to the present.
@Mike - but so much of that finance has so little real econ behind it!
@Neil: "universities aren't structured to teach job skills" Which is fine when 10% of the population gets a university degree. But when 30% of the population - or more in urban area, and in certain demographic groups - gets a university degree, the disconnect between universities and job skills starts becoming serious - this gets at the points Bob Smith raised above.
CBBB - As a biz skool drop-out, I agree with what you say about it - I knew that if I did a PhD in accounting, I could "write my own ticket", but couldn't stick it.
I'd advise anyone in your situation to do an math major/econ minor. The awesome grades you're bound to get in econ will be enough for you to get funding for an MA if you're a domestic student.
Posted by: Frances Woolley | December 18, 2012 at 04:40 PM
Er I should have said in my last sentence that academia was one of the preferred destinations for the cream of the crop of economics graduates. The number of academic economics positions and professional positions is surely outstripped by the number of people who graduate with undergraduate economics degrees.
Posted by: Robillard | December 18, 2012 at 04:43 PM
Robillard: Frances had a prior post last year on whether or not economists should be licensed.
Posted by: Shangwen | December 18, 2012 at 04:56 PM
Skilled trades may not be a good bet for a young person starting off for much longer, even in AB. Most require apprenticeships to get started, but what I'm hearing is that firms in AB are figuring out that they can refuse to train apprentices, claim a labour shortage, and get temporary foreign workers in to do the work for much less, and without a union. That effectively shuts the door on kids wanting to get into trades.
I don't know much about business grad prospects, but engineering is not exactly a road to interesting, well paid work. At least not the way students seem to believe it is when they are studying it. Mostly it is a road to middle management in a large firm, and these days those positions go to Biz Skool kiddies as often as they go to an engineer promoted from the ranks. And engineering work is mostly pretty boring. The fact is that unless you are a rock star with a PhD, nobody is going to let you anywhere near anything serious. There's just too much at stake. That's why most engineering is done by handbooks and established codes. The hard stuff is already worked out and you just look it up. So engineers end-up being project managers or sales/service people. A far cry from their youthful dreams of building space ships or F1 cars.
As for biz skool propects ... well, the very large firm I used to work for canned the entire accounting dept. and outsourced it to ... India. Yup. India. That was about the same time they closed their Indian operations because of a bribery scandal and the US execs where worried about it sticking to them. You couldn't make this stuff up if you tried.
Posted by: Patrick | December 18, 2012 at 05:01 PM
Frances, that was actually what attracted me to English Literature. I had the freedom to pursue almost any topic I wanted. My M.A. thesis was more philosophy than literature, and I lead a seminar class on the economics of utopias, and how they deal with scarcity and leisure—it was how I first got into economics as a discipline (I read Mankiw's textbook to give myself a crash course in economics). For me, English literature was a chance to explore almost anything I wanted and have some of the smartest people in Ottawa correct my mistakes in judgement and style.
Also, it taught me to read quickly and process complex thoughts. There's no other way I could have made it through Mankiw's textbook in 3 days.
Posted by: Daniel I. Harris | December 18, 2012 at 05:03 PM
Skilled trades may not be a good bet for a young person starting off for much longer, even in AB. Most require apprenticeships to get started, but what I'm hearing is that firms in AB are figuring out that they can refuse to train apprentices, claim a labour shortage, and get temporary foreign workers in to do the work for much less, and without a union. That effectively shuts the door on kids wanting to get into trades.
Engineering, at least in Ontario, already figured out that model 10 years ago. It destroyed the market for new grads. It also set up a vicious immigrant/Canadian born cleavage in Engineering that is just nasty to see and experience.
I have yet to figure out a way to argue against using the immigration system as a tool of labour arbitrage without coming over as completely racist.
But who believes business, which is simply another form of bureaucracy, is intelligent anyway? I have proof I lost a government job which I would have loved to do, the duties were just what I liked, due to a website update.
Posted by: Determinant | December 18, 2012 at 05:29 PM
Reading this post and the subsequent discussion, it seems that the root problem is that Canadian universities are not serving their students very well. What would it take for business schools/depts to expand and accept a higher fraction of students? Also, you could have an econ major/biz minor, where the econ side would have a higher focus on courses which are relevant to how real-world businesses are run. Think labor econ, industrial organization, corporate finance etc. Accounting could be analyzed from a law-and-economics perspective - IIRC, David Friedman has some writings on this.
Posted by: anon | December 18, 2012 at 06:57 PM
Anon: "Also, you could have an econ major/biz minor, where the econ side would have a higher focus on courses which are relevant to how real-world businesses are run. Think labor econ, industrial organization, corporate finance etc. Accounting could be analyzed from a law-and-economics perspective - IIRC, David Friedman has some writings on this."
Business schools generally offer the option of a minor in business - here's Carleton's. Notice that it has a minimum GPA requirement of 7 on a 12 point scale, which works out to a B-. It's not available to the students I'm concerned about - the ones who are struggling to get through their degree programs.
Posted by: Frances Woolley | December 18, 2012 at 07:07 PM
Anon: "What would it take for business schools/depts to expand and accept a higher fraction of students?"
It would probably take a diversion of resources away from the humanities, social sciences and hard sciences, who aren't likely to be amused by the prospect. Moreover, while I think that business schools do over some tangible skills, I can't discount the likelythat to some extent it performs the sort of signalling role that used to be performed by a BA i.e., if business schools are selective about who they admit, than a business degree still serves as a useful indicator of inate ability. That value disappears if they admit everyone and their dog (just as the value of a BA as a signalling mechanism has been degraded as university enrolment swelled).
Patrick: "I don't know much about business grad prospects, but engineering is not exactly a road to interesting, well paid work."
Is there ever such a road?
Posted by: Bob Smith | December 18, 2012 at 08:06 PM
Nick Rowe asks: "Is it correct that in the 1950's and 1960's in Canada (maybe the US too?) business was the easy program to get into? That it only became fashionable in the late 1970's/80's?"
Yep. As late as the early 1980s (when I was teaching at Illinois State University), the intro economics courses were required for business majors partly on the rationale that we would flunk out the poorer students for them...business courses were regarded as *intrinsically* easier than econ courses.
I will also note that my undergraduate econ courses (at a small, fairly selective liberal arts college) had more extensive reading lists than anything I have attempted in a long, long time. It's apparent (from some evidence from experiments with e-textbooks) that many intro econ students rarely even read the assigned textbooks, or other assigned readings. (And, if you look at some of the MOOcs--massive, open online courses--you will find that many of them, and not just in economics have no assigned, or even suggested, readings...which scares me.)
Posted by: Donald A. Coffin | December 18, 2012 at 09:43 PM
I should also note that many of my students for the past 25 years have been employed full-time. Many of them have told me that they see no reason to worry about how clearly (or correctly) they write, because their bosses wouldn't recognize good writing if they saw it. And not a small number of my students have told me that the standards for good writing were higher in the economics (and business) courses they took than in their first-year composition courses or in the (required of business students) course in business and professional writing. All of which also scares me.
Posted by: Donald A. Coffin | December 18, 2012 at 09:56 PM
Patrick:
Huh? Is engineering really so different in Canada vs the USA? All the engineering students I knew seemed to like their work, and as someone from a similar major (compsci) I feel the same way.
Posted by: Alex Godofsky | December 18, 2012 at 10:06 PM
"if I've got a student who's a journalism major, and a student who is struggling to get by as an ESL student, how do I evaluate the two in terms of their technical writing?"
As somebody who teaches English for academic purposes, I'd say, "you hold them to the same standard." You design a grading rubric that is focused mainly on the content, but under which a student cannot get a great mark without great writing. A student who clearly understands the ideas but drops the odd article and plural -s here or there without causing too much confusion should get a very good grade too. A student who can't write to be understood should get a failing grade on an assignment that requires them to write to be understood.
Most courses will include a variety of assessment types, and it's up to the professor to decide what percentage of the grade is based on writing, what on speaking, on drawing diagrams, on doing math, etc.
Posted by: Brett Reynolds | December 18, 2012 at 10:09 PM
Reminds me of a Chinese undergrad at UChicago. I asked him why he was studying economics--what interested him. His response was that he owned high rises in China. I said, you mean your family? He said, I have my own now.
Conversation petered out. I don't think he cared about anything I would call economics.
Posted by: Jon | December 18, 2012 at 10:36 PM
Donald - that's really interesting about the e-texts and just how much students read.
Posted by: Frances Woolley | December 18, 2012 at 10:56 PM
Donald - that's really interesting about the e-texts and just how much students read.
Posted by: Frances Woolley | December 18, 2012 at 10:59 PM
"The math gets challenging at more advanced levels, but most of undergraduate economics requires nothing more than high school level calculus... As a result, at most Canadian universities, economics attracts some students who are not strong academic performers..."
I think you may be underestimating the obstacle the mathematical requirements of econ pose, as compared to a field such as politics. There is also a difference between being able to do the math and wanting to. If many students want to avoid having to do calculus and matrix algebra - some them smart and able - this will tend to increase demand for fields such as politics. Depending on resources and how admission to plan / Major / department works, at the university, there could be situations in which a student wanted to be in politics because politics doesn't require any math, but was only accepted into econ because he or she didn't meet the GPA requirement for politics at the end of first year. Not a good situation, for that student. Is this possible, at Carleton?
Posted by: Andrew Lister | December 18, 2012 at 10:59 PM
Is engineering really so different in Canada vs the USA?
Yes, obviously job conditions in the US are far from perfect but the quality of opportunities available to particularly STEM graduates in the US is far beyond what is generally available in Canada.
Posted by: CBBB | December 18, 2012 at 11:08 PM
Andrew "there could be situations in which a student wanted to be in politics because politics doesn't require any math, but was only accepted into econ because he or she didn't meet the GPA requirement for politics at the end of first year" - that situation arises most commonly with business or other more specialized degrees. I don't think it arises with politics, and I couldn't see anything in the calendar that suggested it would.
Posted by: Frances Woolley | December 18, 2012 at 11:14 PM
For the majority of university students there is no magic ticket. Most of them hope to get a great job, but there are no guaranteed paths to this objective. My suggestion, after graduating 20 years ago from Economics is to study and do what you love and let the jobs follow. I think learning to learn is a good skill to have, so is communication, analysis and leadership could be valuable skills to learn at university. An analysis course with Excel, SQL, R/SAS would help get a foot in the door.
I understand Frances concern for C/D students, they don't have the stuff to be doctors, accountants, programmers, opticians and the don't want to be in construction or the trades. I suggest that they limit themselves to a 3 year degree, perhaps move over to a college business program.
There are jobs that don't need extensive university level studies and only some minimal specialized training for example business analysts, project managers, account managers, systems analysts, telecom analysts, etc ...
Posted by: Antonio de Sousa | December 18, 2012 at 11:31 PM
I sympathise. When the rewards are reserved to the very top, those in the second or third rank cannot hope for much. I do wonder about the claim that economics offers some special insight into costs and benefits or the consideration of alternatives. It does offer a way of thought that lends itself to precise quantification of choices, but then that's not terribly useful in a world where much that really counts cannot be quantified, and where an appreciation of the limits and pitfalls of quantification is essential. In the fields I worked in (intelligence, policy analysis, law enforcement) we came to prefer graduates in history or similar disciplines over economics - they were more likely to look at all the evidence, and be aware of the limits of knowledge (degrees in business were a marker for flashy superficiality). Still, most people seem to find a home that suits them eventually.
Posted by: Peter T | December 19, 2012 at 01:28 AM
Even in the US, I'd say STEM is dicey in the long run. You don't want to find yourself at 40+ years old having only ever done purely technical work. It's a dead-end
Posted by: Patrick | December 19, 2012 at 01:40 AM
You're working from the view that the point of a university education is to educate.
Which is only half-true.
A university education filters society into graduates and non-graduates. And grades the graduates. It filters them by a measure of persistence, intelligence, and social class.
As an employer I find that extremely useful (not perfect - for example I find the social class bit a tad annoying - but there are employers like law firms who find that useful). The fact that you've also taught them some stuff - well, it's a nice bonus if they've learned something relevant.
Posted by: meno | December 19, 2012 at 02:00 AM
For the reasons listed here, (and the realization that most students in Korea attend university solely as a signalling exercise - ending up in a prisoner's dilemma...) of the six courses I have to teach every year, I made sure that one of the classes each semester consists of reading the newspapers, giving presentations and writing papers (though dressed up as an economics course). However, there's always a few students every semester who complain that "they don't learn anything..."
Posted by: Junsok Yang | December 19, 2012 at 03:11 AM
And here I thought I got a bad education in MEPhI Economic Analysis Department. I've learned, let's see:
Calculus, linear algebra, analytical geometry, discreet mathematics, combinatorics, graphs, stochastic theory, statistics, basics of algorithms, a few simple programming languages, theory of databases, mathematical modeling (on paper and using tools), ODEs, system dynamics software, undergrad-level micro, Neo-Keynesian macro (the teacher was cool but kinda behind the times... I like Post-Keynesian school more now), accounting, financial management, history of sociology, history of economics, economical history, political history, history of philosophy, theory of politics, BPM, ERP systems, MS Office.
Alright, most of those courses weren't very deep, and I'm starting to forger some of the least useful things I've learned, but I've certainly touched a lot of topics. Compared to some Western student I am a jack-of-all trades (but master of a relatively few). I used to envy the fact that American/European students of economics learned a lot of models and read a ton of books on the subject, but now I think that perhaps it is better to get a wide, if shallow, education that will show you what is -there- to learn and then to deepen it in the necessary areas in the process of working.
I currently work in IT consulting, and reading about economics is just one of my hobbies. I hope to grind through the Mas-Colell textbook one day, just for the hell of it, even if that won't be particularly useful in future.
Posted by: Roman P. | December 19, 2012 at 05:37 AM
I have not experience with Canadian education, however I really do not think that you should be that much worried. My wife is an attorney and according to her she learned nothing of really practical value as part of here law education. She was thought history, theory of law or Roman law - but all this is all not really that much useful in practice, especially if you end up doing just a firm lawyer running through labor contracts and devising internal company rules. The few courses where they were really required to write a contract or practice speeches before judge/jury were to far in between to have any significant impact on real skills. Most of those came as part of apprenticeship.
Another example is me - I am compscience major and I had an intensive math/physics courses as part of my education. We did some programming courses - a little bit of everything, from assembly language and C++ through some scripting, object-oriented programing and some web programming + databases. It is almost impossible that you will find a job where you will be able to use all that. If you really are to find a job, your programming skills (as they are taught on university) in a particular area are not vastly superior to any high school student who did a few programming jobs in that area to make some money aside. It is all that math and physics and theory that made you ask questions existence of which you were not aware, that make you different. All that, if used correctly can make you use your practical skills more efficiently. So to sum it up, I think that university education really does not have to prepare anyone for any particular job. The best they can do for your average student is to let him taste different things, make him ask questions that he would not ask if let on self-education and then let him loose. World is changing, people are more likely to do more things during their life and to educate until they die. I really believe that education should prepare you for this more than it should prepare you to use a particular tool for a particular job that is popular nowadays.
And last - but not least - truth to be told I really do not get this notion that education is there solely to help you make more money. There is huge value in being educated that goes beyond what you personally will really "use" in your life. If you were taught to think in some special way, if you use different categories to evaluate world around you, if you practiced critical thinking for almost 20 years then it becomes part of your personality, of what person you really are. These are things that make you more valuable not just by sheer amount of work you personally can do, but it increases your value for your colleagues, friends and other people around you.
Posted by: J.V. Dubois | December 19, 2012 at 05:49 AM
The main issue with an university education is that expectations aren't aligned.
Students expect to learn stuff that will be useful to their future jobs. Some of the most clued up students may also expect to gain useful perspective, and make useful contacts, but as far as I can tell, not many people are that aware of those possibilities at the age that they enrol in University. They often don't realise how little of what they will study at University will be useful at work, and even if they have some inkling of that, they still usually expect that academic performance will be highly valued by employers. Which it often is, as one of their criteria. But only one.
Students' parents (an important part in this since most students are young and still to some extent dependent on their parents) have similar expectations, plus expectations of sending some social signals. They often have some old-fashioned ideas about what going to college means, since (by definition) they belong to another generation. But being older, they usually assume they know better than their children, when in actual fact, they're usually equally uninformed.
Lecturers expect to teach about their chosen subject. Which may or may not be that relevant to student needs. And they often have little idea of what the student needs are anyway, unless they happen to be particularly interested to know.
Employers expect to hire people, not based on their knowledge, which most likely won't be particularly relevant, but based on some useful signals that indicate how intelligent, committed (both generally and particularly to the job subject) and/or well connected a graduate is. They often assume that they understand these signals. In actual fact, since they don't employ people who give off the "wrong" signals, they don't get to know.
In short, it's a highly inefficient system that operates because everybody holds mostly unrealistic expectations.
If students realised how little they are going to get of value, and the fact that the most useful resources of an University can be accessed either for free or at a very small fraction of the cost of a University education, they would choose the latter path. If parents had a similar understanding, they would go along with this instead of pressuring their kids to go to college.
If lecturers realised how little value they usually contribute to students, they'd be seriously re-thinking the whole role of Universities, and trying to work out what it is that they can offer to society (Useful research? A mix of Internet-based education plus personalized advice? Not sure, but certainly not lectures.)
If employers realised how much noise and how little signal they are getting when they classify potential employees, they would start demanding systems that provided them with better signals. I suspect a combination of IQ test, social skills test, English language test, and a two-week hands-on getting them to know the job in real life for those that passed the tests would be far more useful to estimate the ability for most jobs.
But then, if we had an efficient system, unemployment figures would go through the roof because there wouldn't be all those people stuck doing University degrees. Which is politically unacceptable.
Posted by: Doly Garcia | December 19, 2012 at 06:27 AM
The primary purpose of a university education is signaling. A credential tells the employer that the candidate has the combination of intelligence and work ethics needed to get a degree. With the exception of a few professional fields, the actual material they study is not really relevant.
My firm only hires university graduates. If a resume comes in without a degree in it, it will usually end up in the trash. This is true for sales positions, HR positions, and all sorts of posts where no degree program directly teaches the knowledge these jobs require. It just is taken as a signal of the applicant's quality.
There is frequently grumbling that the taxpayer is paying for a highly expensive tertiary educattion system just to give the private sector a resume prescreener. But what alternative is there that is better? How, really, can you distinguish one 18-year-old from another?
Posted by: tyronen | December 19, 2012 at 06:49 AM
Interesting comments.
For my thoughts on education as a signal v. human capital theories of education, and what it means from a policy perspective, please see this post - my first on WCI: http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/03/human-capital-literal-truth-fairy-tale-or-myth.html.
(B.t.w., Nick or Steve, could you change the category tag on that post from Nick to me?)
Posted by: Frances Woolley | December 19, 2012 at 08:26 AM
Hmmm. I have changed the tag to "Frances Woolley", but it still has "posted by Nick Rowe".
Posted by: Nick Rowe | December 19, 2012 at 08:36 AM
Nick - thanks so much! Now if someone clicks on posts by author, this will show up under my name not yours.
Posted by: Frances Woolley | December 19, 2012 at 09:25 AM
J.V. Dubois:
I disagree strongly. Yes, a CS degree gives you very broad education about the field, so you won't directly use most of it. But you don't know what you will be doing at graduation until you do - web design, OS programming, etc. - and so the breadth really is useful. No one goes into university knowing that they will end up working on the NT kernel (some may hope), so it's pretty good that those that do had to take an OS class.
I also disagree re: relative superiority. A CS major has probably done some number of CS courses in high school; by graduation they have about 6-8 years of intensive programming experience in a wide variety of settings. This gives you really excellent priors about what can and can't be done and how to do it, in any language. Post-graduation, a lot of my programming is actually in VBA, which I had done none of in college - but I can learn almost anything I need to about it instantly, because I know what sort of things to look for in the documentation if I need to accomplish a certain task.
Posted by: Alex Godofsky | December 19, 2012 at 09:50 AM
My undergrad major in Sociology was far more practical and useful than my econ courses, in part because almost all my econ professors avoided using real world examples (widgets, utils, and coconuts are far less messy). The impression I get is that an econ degree is mostly useful as a signal. It shows you are a practical, business-minded person who can do math and is willing to sit through numerous boring classes in hope of a future reward.
It's pretty rare that one will learn anything in undergrad that is immediately useful. Even with my more "practical" major, if was ultimately side/summer programming work that got me into a job once I graduated.
Posted by: Eric Titus | December 19, 2012 at 11:11 AM
Eric - what country was that in?
Posted by: Frances Woolley | December 19, 2012 at 11:24 AM
"...we spend a huge amount of time talking about market failures, about the role of government intervention in the economy, about public choice, interest groups, rent-seeking, bureaucracy, etc etc etc."
Frances, can you recommend any interesting economics articles that deal with bureaucracy?
Thanks
Posted by: Matthew | December 19, 2012 at 02:15 PM
"Is it correct that in the 1950's and 1960's in Canada (maybe the US too?) business was the easy program to get into? That it only became fashionable in the late 1970's/80's?"
Yes, I think so. I recall my father telling me that when he was at McGill in the late 50s early 60s, business and, believe it or not, engineering were known as the less demanding fields.
Posted by: Matthew | December 19, 2012 at 02:55 PM
Matthew - classic references are Niskanen, Bureaucracy and Representative Government (that's the theory I do in class), or Mancus Olsen, The Logic of Collective Action. For something recent and academic, take a look at the journal Public Choice. Also some cross-dressing economists publish in the American Political Science Review or the Canadian Journal of Economics.
Posted by: Frances Woolley | December 19, 2012 at 03:09 PM
no accounting, nothing about hiring or firing workers, or human resource management.
Only one of those is actually useful, I think. The rest just rely on hip voodoo-of-the-week and badly flawed heuristics.
Vaguely reminiscent of your "purple pill" desire from your post about behavioral economics, it'd be nice if there were some blend of economics and, say, business or finance curricula, but not simply what you would get if you double majored. Economics can leave one without obviously marketable skills - at least, not obvious to the HR departments and middle managers - but the narrow and frequently bizarre focus of business and finance leaves many otherwise bright people with deeply wacky ideas. For example, the prevalence of "Austrian" ideas among finance professionals.
It's an incredibly sketchy notions on my part, but take your typical economics and finance curricula. Emphasize econometrics, (applied) behavioral economics and/or economic psychology, some elements of industrial organization and the parts of finance that aren't terrible shibboleths (use discretion - I don't feel like a smarter person or investor for knowing CAPM, but I do for getting Modigliani-Miller). What else...maybe business law? It'd give graduates the practical, nuts-and-bolts knowledge of business so they can swim with the fishes, but technical knowledge that your typical business majors completely lack - knowledge that lets them assess and critique data and business schemes in a way virtually no one out of an undergraduate business school can. Call the major "business physics" or "social physics" or something, because that will pique the interest of the masses and irk virtually everyone in business and the natural sciences.
Posted by: Edmund | December 19, 2012 at 03:51 PM
Edmund - the kind of curriculum you describe would be hugely popular.
Posted by: Frances Woolley | December 19, 2012 at 04:38 PM
I don't understand this critique.
I have a MS in Engineering and took Advanced Calculus.
But, this guy, http://en.wikipedia.org/wiki/Dale_W._Jorgenson, made my head hurt with statistics and matrix algebra.
I think Eco is tough.
Posted by: [email protected] | December 19, 2012 at 05:21 PM
Edmund has a point.
You ve got to have the "physics" in the word. People know that the nukes work, but dont hit them at home, like chemistry : - ).
Econophysics is already taken.
Nano, opto, bio,
community, governance, network, fractal, global, holistic
combined with :
advanced, interdisciplinary, something with string, soft, sigma, viral, native
I think "entrepreneurial" is too long and overused already
Posted by: genauer | December 19, 2012 at 06:14 PM
Alex: Ok, so take your average University major who spent 5 years learning math and physics, then some years learning all that theory, and who maybe tested some of his practical programming skills on a few university projects. And compare him with somebody who took a job directly from high school and who now has 5 years experience in a technology startup or who has several projects under his belt working as part of some larger development team. Now compare their marketable "programing" skills. If you end up programming .NET applications you really do not need to know all that math, physics and skills to make a program in assembler.
Oh and yes, please take into account that we are talking about your average guy - we assume 30% of people have university education. We are not talking about the brightest geniuses who are snatched from university by Google or Microsoft to design next gen operating systems and whatnot.
Posted by: J.V. Dubois | December 19, 2012 at 07:04 PM
"Even in the US, I'd say STEM is dicey in the long run."
Yeah I'd agree, finance is much better these days but I think there's a lot of confusing engineering in general with coding. For the reasons JV Dubois highlights above programming is a bad profession in general, namely someone who just learns to program themselves can get a job coding without any credential. This means that unlike with professions like law, medicine, and professional engineering there's no legal protections to help shelter you from competition which means most programmers are open to full market forces and hence all but the best can look forward to lower wages as they age.
STEM isn't the most lucrative field to be in these days but if you're in a STEM field you'll have much more luck looking for work in the USA than in Canada, especially for new grads.
Posted by: CBBB | December 19, 2012 at 09:08 PM
I was a math major until until 2'd year university, my experience is that math, much like a language is understandable until it isn't. My barrier was admittedly low - I could barely understand 2'nd order differential calculus and third order was beyond me. I switched to economics and computer science and found even more math: matrix multiplication, non-stochastic algebra, formal logic and statistics. My economic faculty was divided between monetarists and communists - my later econ classes were shall we say very different. Coming out in the mid-80's I looked at my prospects working at a major bank (the only ones hiring economists) or working with other sweaty nerds programming in COBOL, PL1 or C and took the LSATs instead. As a lawyer I can say that my economics training developed my understanding that social systems such as the justice system, business and yes economics are complex with no right or wrong answers (like in mathematics) but only better or worse answers. Economics, in normalizing one or more variables (read assumptions) and conducting thought experiments using various logically derived models to estimate results (statistics again) is a valuable tool in my work and other predictive trades. It is not just a liberal arts degree that teaches one to think critically. The current fetish of downloading training by businesses onto Universities is in my humble opinion very destructive.
(Yes, I graduated from a glorified trade school)
Posted by: Formerlawyer | December 20, 2012 at 12:11 AM
Overdue @Robillard:
I recently came across this gem, a letter from Adam Smith on giving universities a monopoly to grant medical degrees. It has wider application, to be sure.
www.historyofscience.com/articles/smith-medical-education.php
Posted by: Jamie Carson | December 20, 2012 at 04:56 PM
@Edmund, @Sproul and @Titus:
I have worked in national statistics, plus done some accounting and investing. I majored in economics (at Carleton, after dropping down from combined Economics and Math ), and later studied some accounting, statistics, and finance.
From this standpoint, I think teaching the value of using and interpreting economic indicators is quite useful, including Y=C+I+G+(X-M).
Giving practical advice on how accounting statements relate to national accounts and financial models is something that appears to fall between the cracks, and I suggest that economics would be a good home for that (professors of economics will no doubt back me up).
And somewhat on a side-note, I've been pondering lately how is it that so many of the social workers that I've met are, shall we say, less than financially literate. One would think that financial woes would be at the root of much of their clients' needs, and that financial literacy (or even economic thinking) might be a key item to have in their tool-kit. Just a casual observation, no slight intended.
Nice post, and great discussion.
Posted by: Jamie Carson | December 20, 2012 at 05:28 PM
I think American data on the salaries if different undergraduate degrees is interesting. The Payscale College report only includes individuals with undergraduate degrees. When you rank them by midcareer salary, economics does better than any undergraduate business degree. Even when ranked by starting salary, economics does better than most (I am looking at the 2011-2012 report).
As an economist currently working in a business school, I can understand why this is. Business courses seem to concentrate on specific job skills. Many of these skills will become dated after students graduate. For example, the person who teaching the accounting course in taxation here works very hard to keep it up to date with changes in tax policies. That is admirable. However, I wonder if it matters given there will be further changes before students graduate.
I think that economics students end up doing better because they learn how to learn which in the end is much more valuable that most general business skills.
BTW, both my experience and that of the business professors here is that those majoring in economics (as a major in a business faculty) are on average much better than those majoring in business subjects.
Posted by: Derek | December 20, 2012 at 05:47 PM
Jamie - thanks for those comments. The point about financial literacy and social work is an interesting one.
Derek - with all of these stats, it's vital to control for, e.g., the gender composition of the college major. If women's incomes are on average 70% of men's incomes for reasons completely unrelated to field of study, then a 100% female field of study will generate earnings 70% of those of a 100% male field of study. Are the earnings of econ majors relatively high becomes econ imparts valuable human capital or sends a strong positive signal, or because econ is more male-dominated than other social sciences?
Posted by: Frances Woolley | December 20, 2012 at 07:35 PM
Frances: Are economics undergraduate programs, more male dominant than areas like finance? I don’t have statistics handy but I doubt it and economic majors have higher midcareer salaries than finance majors (although only slightly higher starting salaries).
As far as human capital versus signaling, I can really see how both could be working. However, the fact that economics does much better in terms of comparing midcareer salaries rather than starting salaries makes me suspect that human capital is at work. If it were all signaling, I would think it would be reflected in starting salaries.
Posted by: Derek | December 20, 2012 at 08:04 PM
JV:
I agree physics is not going to be useful, but your course of study was also unusual; most CS degrees only require intro physics as part of their general education requirement.
If I compare my own undergrad experience (and that of my classmates) with your hypothetical person, we would have a large advantage over that person because of the breadth of ideas we'd been exposed to. There are a million wheels in software design and development that you don't have to reinvent if you know they exist and can look them up.
A simple example: memoization (more generally, caching). An application I developed at the office was running slowly, so I just added a hashtable and slapped a few lines at the front of the offending functions (which I knew were idempotent) and bam, requests were handled 400% faster.
I'm perfectly open to the idea that there are margins on which someone should forgo a university CS education and instead go straight into programming, but I think they are much further out than you seem to. The world isn't divided into "Microsoft programmers" and "everyone else"; software systems are used everywhere to do everything, and the toolkit you get from a university degree lets you make better systems with less effort.
Posted by: Alex Godofsky | December 20, 2012 at 08:49 PM
@ Frances: "It's hardly a secret to anyone who's worked in an economics department: some students enrol in economics because they want to study something that seems vaguely useful, but they don't have the grades, or the mathematics and language skills, to make it in business or engineering. "
I whole heartily disagree with the entire premise of this blog post! To suggest that an education in economics is easier to complete than business school is complete hogwash! Ask any number of my colleagues currently studying for their M.A. in Economics today! Many of them have undergraduate degrees in economics, some humanities, while some other have B.Comms. Throughout my experience in networking with them, and other students over the years, the conclusion has been overwhelmingly similar: the B.Comm is an un-stimulating degree, business school is for the ‘brainless’, it’s ‘boring’, ‘simple’, ‘unchallenging’, and requires nothing but tactics in short term memorization which does nothing to challenge a critically minded person!
I was enrolled in business before I switched to Classics/Economics/Philosophy, and I can tell you that at least at Carleton, the business college offers nothing in comparison to the Economics department!
With respect to the ‘skills’ one learns in throughout a B.Comm, I highly encourage anyone here to speak to any 4th year undergraduate pursuing the B.Comm in Ontario. I happen to know a few of them (ok sample size of only about 15), and the majority of them tell me they could have learned the material faster on their own, with better clarity/understanding, without the expense of tens of thousands of dollars… From what I understand, many of their courses are literally just “read the book” “write the exam” pay as you go credits! That is not an education one wishes to start a life on… is it?
I’ll cut the rant for now… but just as parting consideration, ask your average B.Comm student what his/her hardest class is throughout their degree. In my experience it has always been one of the following: Intermediate Micro/Macroeconomic theory, Introduction to Statistics with application to Economics and Business…
Posted by: Scott P Bacon | December 21, 2012 at 02:29 AM
Scott - I agree with much of what you say, e.g. that intermediate micro is a brutally hard course for many business students, and that economics offers many more opportunities for rigorous, deductive reasoning than business.
I disagree with your conclusion, however, for two reasons.
First, in many Canadian universities, business has tougher admission requirements than does economics, and requires a higher GPA to continue in the program. Higher admission requirements + some element of training = signal + human capital = better prospect of a job=strong demand for program = higher admission requirements. The virtuous circle. That's what drives the phenomenon I'm observing here, not the intrinsic difficulty of business.
Second, the really weak students in undergraduate econ classes typically have very poor language skills. They come into economics to avoid having to write essays and or do presentations or participate in class - the elements of business classes that are "birdy" for someone who has reasonable language skills. A class presentation can be an absolutely brutal, utterly terrifying experience for someone who's not grown up in Canada. In Carleton, the weakest students typically take applied econ or 3 year degrees. Remember that often only 1/2 or 2/3 of students at most come to class. You might not ever have met any of these struggling students.
Posted by: Frances Woolley | December 21, 2012 at 08:08 AM
Your post really hits home with me --
I started in economics mainly because of the financial crisis; I was a political science major at the time and my professors couldn't make sense of the crisis. Everything they said seemed like a secondary observation: "this is what happens when Congress bows to special interests like finance," or "this is a great exercise in how legislation can quickly be passed through in times of crisis."
I wanted to learn about the crisis itself and thought taking economics courses would help. Yet when I got to class, we were learning the same old textbook theory -- and very little of it involved higher-level maths. I was quite happy with myself until I took Game Theory -- I finished with a C+, devastated that I couldn't make sense of the course.
I picked up a mathematics major thinking that might help; after all, the people who excelled in Game Theory tended to have been Math / Statistics majors taking economics for fun. My mathematics grades were all over the place, finishing with a B+ average overall. But despite being at least proficient in math, I was never able to apply that skill set to economics. I even tried to take courses that would matter: advanced linear algebra, advanced probability and statistics, calculus 4, etc.
The result has been taking a job far from my core interests and outside of the 'skills' that I developed as an undergraduate. I kind of feel like I was defrauded by the economics department -- I received too little by way of economic maths/modelling to pursue that field, and too little in business training to fit the finance mold. So what now?
Posted by: Jsndacruz | December 21, 2012 at 08:28 AM
From what I understand econ professors think what they teach their undergraduates is mostly bullshit. Is that true for any other major?
Paul Heyne was popular teacher, but his economics was just the usual dumbed-down libertarian junk. People (including me before I knew better) lap it up because it's easy to learn and makes you feel smart. It's like how people trick children into paying attention by pretending what they're saying is a secret.
Posted by: chrismealy | December 23, 2012 at 12:04 PM
That is also not my experience with economics (in the US). In my math major I only had to take tests. My humanities major friends only had to write final term papers. In my economics classes I had to do both in almost every class. People who couldn't handle the math in economics classes (and there were many since we didn't have a business major) dropped out and became political science majors instead.
At most schools I know of that have both economics and business majors, the business major is the creampuff major and the econ major is tough. I know of a few exceptions with exceptional business schools, but those are exceptions.
Posted by: nicoleandmaggie | December 24, 2012 at 08:21 AM
"If I were an economics student, I would be in a state of academic- existentialism after reading this. Its more depressing than gender and population aging to the average 20something- jobsearching-almost graduated-econ undergrad."
This is way after the fact, but I'm a current econ student and I don't really care. Well, care isn't really the right word, but I knew about this when I applied. I'm not going to learn a lot of useful job-related things, I'm not going to learn how to run a business or whatever, I'm going to learn economics. I'm going to learn about how markets work, I'm going to learn about monetary theory, I'm going to learn about hyperinflations. None of these things will really help me and a job, but I'm fine with that. I like economics, plain and simple. After lugging myself through a year and a bit of pre-med I finally just decided to do something I actually care about.
I know I'm not really the kind of student you're talking about in this post, but I thought I'd just offer my two cents. ;]
Posted by: Canadian Nerdo | January 02, 2013 at 05:45 PM
Canadian Nerdo - wonderful - this is a perfect spirit with which to approach an econ degree. I wish you all the best with your studies.
Posted by: Frances Woolley | January 02, 2013 at 06:02 PM
Personally I think that one of the worst things to happen to higher education is the "partitioning" of knowledge. One reason I have a strong interest in economics is that I like asking questions like "so why does that happen?" and once you view the world through an economic lens, you start to see *interesting* things. Like analyzing the economics of college majors and job interviews. Once thing that sort of became pretty obvious to me once I thought of things in economic terms was that it was a horrible idea to focus on a major, because the dynamics of education practically insures that you end up in a major that is oversubscribed, so I focused on general liberal arts skills. I ended up with a Ph.D. in astrophysics, because that turns out to be the hardest subject I could find, and I'm something of an intellectual masochist.
One thing that is interesting is that I have an incredible amount of impatience with formal economic models. The thing that I find most useful is economic history and also sociology and psychology.
Since we are talking dirty secrets.....
It's also been useful in job interviews, and analyzing the job market, and it doesn't look good. There are basically two types of jobs in finance. Those that require high level technical skills, and those that don't. For ones that require high level technical skills, there is a strong bias in financial firms *against* economics majors. People are looking for people with mathematics, physics, computer science, and engineering degrees. The presumption is that a physics major or a CS major is just better at math than an economics major, and if you have a supercomputer than handles billions of dollars in transactions each day, you want (and can pay for) world class geeks.
That leaves those that don't require technical skills. The good news is that there are a ton of them. The bad news is that financial firms tend to look for those from "name brand" universities. One thing that I find amazing is how much people will pay for "name brands" and that includes people as well as cell phones. Part of that is risk aversion. Part of it is a sales channel. A lot of it has to do with brand transference. The dirty secret of finance is that much of it is clerical. Type in numbers into a spreadsheet. Photocopy these reports. Summarize these findings. They actually don't require that much skill. But it looks better for a company to tell their clients that their janitors and plumbers all have Harvard MBA's.
One bit of advice is not to focus too much on the classroom. When it comes to jobs, it's not what you know. It's who you know. If you want to improve student's job prospect you need to improve career services. Set up your career services to "sell" your students to companies the way that people sell refrigerators or used cars. When people want a cell phone they go to the Apple Store or local big box retailer. When big companies need people, they go a university, and often a "big name" one. Also keep track of your alumni. Find out what they are doing and keep them involved in the school so that they are your "inside agents."
The other thing that I fought is that my self-study of economics was extremely useful in getting a job. The job market is a market. If you really understand how markets work, then you should be able to figure out how to make the job market work for you. When I was writing a resume, I was thinking in terms of transaction costs, information asymmetry, and signaling, and as I was interviewing I was learning more about the *type* of market I was in. Grade and credential inflation is a type of inflation. Trying to figure out what to study is an exercise in portfolio management. Even reading about hyperinflation and the great depression was useful. Learning how people survived was pretty useful, and I was thinking to myself "well at least I didn't live in X location at Y time."
One curious thing is that I ended up with a major admiration for Karl Marx, and I'm pretty much a dyed in the wool Marxist. The thing that Marx got right was that the rich get richer and the poor get poorer, and one of the most important insights that Marx made was that capital is not really about money. It's about social relationships. Once your realize that, then a lot of what goes on in a job interview makes sense.
Posted by: Twofish | January 05, 2013 at 10:31 AM
The main reason that employers like university degrees is that a university degree shows that the graduate has some of the *real* skills that the employer really cares about. Namely the ability to take orders, respect authority, follow schedules, control emotions, and carry out tasks that you think are stupid. If you have a bachelors degree it means that you can function in a bureaucratic office environment, which is not true for a lot of people.
The test that you too might be useless. The class may be garbage. But the fact is that you were willing and able to jump through the hoops, and do complete tasks even if you personally thought they were useless and idiotic. When the professor tells you to talk, you talk. When the professor tells you to shut up, you shut up. This is ***exactly*** what people want in a corporate environment, and universities took over this socialization function from the military sometime in the 1960's.
One other function of the university is "young adult day care." Universities are places where 20 year olds can learn about alcohol, relationships and other things in an environment were a mistake isn't fatal.
Posted by: Twofish | January 05, 2013 at 10:52 AM