Recurring Decimals…..

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First job of the rest of your life……

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Alex Tabarrok at the Marginal Revolution points out to an article in the NYT about how existing economic conditions affect new graduates with their first job, and by extension their whole career.

Graduates’ first jobs have an inordinate impact on their career path and their "future income stream," as economists refer to a person’s earnings over a lifetime.

The importance of that first job for future success also means that graduates remain highly dependent on the random fluctuations of the economy, which can play a crucial role in the quality of jobs available when they get out of school. ……………[It is]  rather disturbing for recent graduates who were driven by recession into taking less-than-ideal first jobs and are now aiming to work their way up.

……….

These data confirm that people essentially cannot close the wage gap by working their way up the company hierarchy. While they may work their way up, the people who started above them do, too. They don’t catch up. The recession graduates who actually do catch up tend to be the ones who forget about rising up the ladder and, instead, jump ship to other employers.

On a personal level, this certainly doesn’t sound like good news. While the dynamics of job market and career paths may slightly differ for advanced degree holders, this basic economic thesis is probably still true. If you cannot start your academic career in a good school, you won’t be able to attract high quality graduate students; your research, in turn, will suffer leading to stagnation or worse, rejection of tenure.

Currently, in my field of biomedical research, the job market is still in a slump. The lifeline for our research is funding by the National Institutes of Health (NIH) and their budget has been stagnant for the last few year (thanks to you know who). Pricing in inflation and the number of new researchers entering the field, that actually amounts to significant cuts in budget. Funding in short, is a nightmare.

Obtaining a tenure-track faculty positions in an above average school has become ultra-competitive (some departments are receiving 500-600 applications for one or two posts!). The industrial sector, while recovering from the recession is not doing very well either. And I think it is going to get worse. I don’t have hard data, but anecdotally I have noticed and heard about increases in graduate school enrollment around 2000-2001 when the recession started. A lot of these students entered graduate school just because they could not get jobs and grad school offered a stable job with a not too shabby salary (thanks to NIH initiatives in its past budget-doubling, PhD students in biology get paid ~ $24K plus healthcare in most programs). These graduates are going to flood the market in coming two years. So it looks like long hard days of post-doc-ing ahead !

On the optimistic side,  one professor remarked to me that given the current severe crunch in funding, many new tenure-track scientists might decide or be forced to quit. This could create a glut of positions in the academia three-four years from now, when (hopefully) the NIH budgets rebound and funding is once again ample ! Not good for those who will be forced out obviously……

Tabarrok, meanwhile, offers some personal pointers from the lessons he learned through his career:

I take three points from my career and this research.  Leaving the academy turned out to be the just the thing to set me apart from the pack.  It didn’t have to work out that way but when your mean is low you need to throw some variance into the mix.  Finance theorists will recognize this lesson from options pricing theory. 

Unfortunately for us, industry is usually a one-way street – only in rare circumstances have scientist been able to get back to academia from the industry. But I do like his final point:

Third, luck matters.

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Written by BongoP'o'ndit

May 26, 2006 at 8:06 am

Posted in Economics, Life, Personal

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