January 23, 2007

Econ professor Levitt presents new paper

Steven Levitt, economics professor and co-author of the 2005 best-seller Freakonomics, presented a new paper at the American Economic Association’s annual consortium earlier this month. The paper discussed the correlation between graduate school performance and placement in the job market after graduation.

The study, “What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes,” is a collaborative effort of the economics departments at the University of Chicago, Harvard, Princeton, and MIT, and uses a data set of the approximately 1,000 economics graduate students who enrolled in the nation’s five top-ranked economics Ph.D. programs during the 1990s.

While the study revealed a strong correlation between high first-year grades in microeconomics, macroeconomics, and econometrics core classes and Ph.D. completion, high grades did not increase a student’s chance of securing a tenure-track position at a top-20 economics department upon completion of the degree.

Although Levitt and his co-authors found that attending an elite undergraduate institution did not significantly improve a student’s first-year academic performance, it strongly predicted a student’s chance of landing a prestigious job after graduation. “Students from top undergraduate institutions are substantially more likely to secure highly ranked positions after graduate school,” the paper reported.

“Our results thus far, unfortunately, are not particularly earth-shattering,” Levitt said on his Freakonomics blog. “Admissions committees are good at predicting who will do well in first-year classes, but not good at predicting who will find good jobs after graduate school. The first-year course grades are strong predictors of job placement. Once you take into account first-year grades, it turns out that GRE scores, gender, and doing a foreign undergraduate degree do not predict who will get a good job.”

The paper also discussed the correlation between pre–graduate school variables and future job placement. In addition to an elite undergraduate education, a high analytical GRE test score “is statistically significant in predicting placement in a top-20 economics department,” the study found. However, the researchers also pointed out that neither verbal nor math GRE scores were significant factors in predicting job placement.

The researchers also noted that many additional characteristics not accounted for in the study determine success in the job market. “Diligence, perseverance, and creativity—factors that surely matter for successful research careers and job placements—are difficult to define and measure. Our results suggest that there is not an easily recognizable star profile or single path to success for an economics graduate student,” the researchers concluded.

The report was initially the brainchild of Alan Krueger, professor at Princeton University, and data was compiled at the U of C by Julie Less, Graduate Student Affairs administrator in the economics department.