Coordinating the timing of the market for new Economics Ph.D.s: guidance from the AEA

 Here's an email broadcast by the American Economic Association, aimed to promote market thickness by avoiding unraveling and dealing with congestion:

AEA Guidance on Timeline for 2022-23 Economics Job Cycle

 July 1, 2022

To: Members of the American Economic Association
From: Peter L. Rousseau, Secretary-Treasurer
Subject: AEA Guidance on Timeline for 2022-23 Economics Job Cycle

The AEA Executive Committee, in conjunction with its Committee on the Job Market, recognizes that it is to the benefit of the profession if the job market for economists is thick, with many employers and job candidates participating in the same stages at the same time.  Moreover, the AEA's goals of diversity, equity, and inclusion are fostered by having a timeline that remains widely known and accepted, ensuring that candidates can correctly anticipate when each stage will occur. With these goals in mind, and in light of inquiries from both students and departments about how to proceed, the AEA asks that departments and other employers consider the following timeline for initial interviews and “flyouts” in the upcoming job cycle (2022-23).  

Interview invitations
The AEA suggests that employers wait to extend interview invitations until the day after job market signals are transmitted to employers.

Rationale: the AEA created the signaling mechanism to reduce the problem of asymmetric information and allow job candidates to credibly signal their interest to two employers. The AEA asks that employers wait to extend interview invitations until those signals have been transmitted, and to use that information to finalize their set of candidates to interview. This helps the job market in several ways: it reduces the problem of imperfect information, it helps ensure a thick market at each stage, and it promotes the AEA’s goals of diversity, equity, and inclusion. Job candidates from historically under-represented groups may lack informal networks and thus may especially rely on the signals to convey their interest. Waiting to review the signals before issuing invitations promotes a fairer, more equitable process.

We also ask that all employers indicate on EconTrack when they have extended interview invitations; this allows candidates to learn about the status of searches without visiting websites posting crowd-sourced information and potentially inappropriate other content.

Interviews
The AEA recommends that employers conduct initial interviews starting on Monday, January 2, 2023, and strongly recommends that all interviews take place virtually (e.g. by Zoom). We suggest that interviews not take place during the AEA meeting itself (January 6-8, 2023).

Rationale: In the past, interviews were conducted in person at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the in-person meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. 

Interviews should now be conducted virtually to prevent risk of exposure to COVID, and to promote equity among the candidates. Informal feedback to the AEA committee on the job market indicated that the benefits of virtual first-round interviews (e.g. low monetary cost, zero cost in travel time, convenience) outweighed the limitations (e.g. less rich interaction).

We recommend that employers wait until January 2 to interview candidates because job candidates may have teaching or TA responsibilities in December. Moreover, having a clear start date for interviews will help candidates to have accurate expectations of the timing of the stages of the market. An unraveling of the market works against the AEA’s goal of having a thick market at each stage and also works against candidates having uniform expectations of the timing of each stage of the market.

We ask that interviews NOT take place during the AEA/ASSA meetings (January 6-8, 2023) in order to allow job candidates and interviewers to participate in the conference.

Flyouts and offers
Flyouts and offers have historically happened at times appropriate for the employer, and the AEA sees no reason to suggest otherwise.  We ask that all employers indicate on EconTrack when they have extended flyout invitations and closed their searches. Unlike with interviews, the AEA does not take a position on whether flyouts should be virtual or in-person.

Job market institutions and mechanisms
Please keep in mind the various job market institutions and mechanisms created by the AEA to improve the job market:

·       The JOE Network includes a database of job openings for economists.

o   Employers may sign up here: https://www.aeaweb.org/joe/employer.

o   Job candidates may search the database here: https://www.aeaweb.org/joe/listings.

o   The JOE Network has an electronic clearinghouse for job candidates to submit job applications. Job candidates may register here: https://www.aeaweb.org/joe/candidate.

·       The AEA Committee on the Job Market releases data and guidance on the job market here: https://www.aeaweb.org/joe/communications.

·       EconTrack: a board on which employers can indicate when they have extended interview and flyout invitations, and closed their search: https://www.aeaweb.org/econtrack.

Thank you for helping to ensure a transparent and equitable job market for new Ph.D. economists.  

Unraveling of MBA recruitment

 The WSJ has the story:

Some M.B.A.s Are Getting Job Offers Before They Step Onto Campus. Early recruiting—before students and prospective employers see how they take to business school—reflects the fierce competition for fresh talent in consulting.   By Lindsay Ellis

"Just getting accepted into business school is proving a career boost for some students, who are fielding offers from consulting firms before their M.B.A. programs even begin.

"Major consulting firms including Bain & Co. and McKinsey & Co. say they are offering some 2023 internships to students who don’t start business school until this fall. Some offers come with the promise of a full-time job after graduation in 2024.

...

"McKinsey began early recruiting last year after finding some of its recruiting prospects had already committed elsewhere, said Kristin Altenburg, an associate director of U.S. campus recruiting. "

Who Benefits from Meritocracy? by Diana Moreira & Santiago Pérez

 Exams for U.S. civil service positions apparently started for some positions in 1883, and here's an NBER working paper that looks at the difference that made in the composition of people hired, by socioeconomic status.

Who Benefits from Meritocracy?  by Diana Moreira & Santiago Pérez

NBER WORKING PAPER 30113 DOI 10.3386/w30113 June 2022

Does screening applicants using exams help or hurt the chances of lower-SES candidates? Because individuals from lower socioeconomic backgrounds fare, on average, worse than those from richer backgrounds in standardized tests, a common concern with this "meritocratic" approach is that it might have a negative impact on the opportunities of lower-SES individuals. However, an alternative view is that, even if such applicants underperformed on exams, other (potentially more discretionary and less impersonal) selection criteria might put them at an even worse disadvantage. We investigate this question using evidence from the 1883 Pendleton Act, a landmark reform in American history which introduced competitive exams to select certain federal employees. Using newly assembled data on the socioeconomic backgrounds of government employees and a difference-in-differences strategy, we find that, although the reform increased the representation of "educated outsiders" (individuals with high education but limited connections), it reduced the share of lower-SES individuals. This decline was driven by a higher representation of the middle class, with little change in the representation of upper-class applicants. The drop in the representation of lower-SES workers was stronger among applicants from states with more unequal access to schooling as well as in offices that relied more heavily on connections prior to the reform. These findings suggest that, although using exams could help select more qualified candidates, these improvements can come with the cost of increased elitism.

From the conclusions:

"Our findings have implications for the broader debate on exams and meritocracy. Allocating opportunities based on exams is sometimes described as an equity-efficiency panacea, helping select the most qualified candidates while simultaneously increasing the representation of lower SES individuals. Our results challenge this view: although using exams could, in principle, help select more qualified candidates, we show that these improvements can also come with the cost of increased elitism. More generally, our findings show that adopting less discretionary selection criteria might not necessarily help the chances of lower-SES individuals.

...

"Importantly, while we investigate how exams shaped the social origins of government officials, an important question that remains unanswered is whether the poor themselves were on net made worse off by the reform. The answer to this question is not an obvious one for a variety of reasons. For instance, individuals from disadvantaged backgrounds might benefit the most from having a well-functioning state, even if achieving this efficiency implies that they might lose direct access to government jobs. "

***

This paper makes me think of an earlier paper, about the historical introduction and then abandonment of a national exam-based school choice system in Japan, where the result of national exams was that urban students filled more of the places...

Friday, February 21, 2020

School choice, centralized and decentralized, in Japan, a century ago, by Tanaka, Narita and Moriguchi

(Mis)Matching airmen to bases

 The Military Times has this story, suggesting that the Air Force still has lots of room to improve it's internal matching procedures:

Air Force to end preferred basing for enlisted as it changes how airmen find new jobs.  By Rachel S. Cohen

"The Air Force this month will suspend its 4-year-old “base of preference” program for airmen who are on at least their second enlistment contract, saying it fails to send most applicants to the installations they want.

"Stopping the initiative at the end of May can also offer the service more flexibility to move airmen around as military staffing needs dictate.

The change affects “career airmen,” or those who have reenlisted at least once. They previously needed to spend at least four years in their jobs before leaving for a preferred base.

...

"That success rate would have been way higher if we actually had a resource where your standard airman could easily see what bases had openings/low manning, without having to have your [senior enlisted leader] ask your [career field manager] (who probably gets pinged about that at least once a week from people all over the world),” Reddit user JustHangInThere wrote April 28."

**********

Here's a post from 2020 about a NAS report that offered some suggestions on how to improve Air Force matching of personnel to bases and jobs:

Tuesday, December 1, 2020

The labor market that is the military: a report from the National Academies of Science, Engineering, and Medicine

HT: Cherie Shauvin

The market for ballet dancers, by Olivia Hartzell

 Here's a post about the market for ballet dancers, by Olivia Hartzell, an econ Ph.D. student at Harvard whose previous profession was ballet. She writes in Dance Magazine that the market for dancers isn't as thick as it might be, because there aren't uniform times at which companies hire, and efficient matches are hard to predict. She proposes a centralized clearinghouse, but anticipates some obstacles to adoption and implementation.

The Ballet Job Market Needs a Market (Re)Design  by Olivia Hartzell

"The ballet job market is what an economist would refer to as a “matching market”—you cannot simply choose where to go, but you must also be chosen. What makes the ballet market peculiar is that, unlike most professional athletic markets, directors have vastly different preferences for dancers and they mostly do not (and cannot) compete for hires with salaries. Rather, dancers are first and foremost committed to finding their best artistic fits and are often willing to work for less than their worth.

This phenomenon would not be quite as problematic if dancers and directors were nonetheless matched efficiently. Unfortunately, there are two major failures that plague the current system.

First, although many, but not all, major ballet companies in the U.S. operate under the dancers’ union AGMA, there is virtually no regulation in terms of hiring. Deadlines to hold auditions, renew or cancel contracts are company-specific and are not standardized industry-wide. This is problematic because when streams of dancers are released into the audition market at different times, both companies and dancers can end up with undesirable results.

...

"In other settings, centralized clearinghouses have been enormously effective in eliminating similar market failures. Specifically, what I have in mind is a variant that I’ve designed of the well-known top trading cycles algorithm. It would work something like this: After all company departures have been announced and auditions held, dancers and directors would simply submit their preferences to a centralized algorithm that would quickly determine final assignments based on those preferences. 

...

"Of course, centralized clearinghouses are most effective when the majority of the market agrees to partake in them. While leaders may fear that this would require them to relinquish some control, they would only make offers to the dancers who they would under the best possible scenario, and the gains they would achieve by thickening and coordinating the market would far outweigh any perceived losses.

"As new leaders begin to take the reins at companies around the globe, time will tell whether they will be brave enough to challenge the status quo and reshape the marketplace in a way that truly works for both dancers and directors."

HT: Scott Kominers

*************

The market for ballet dancers is tough in other ways as well, e.g. it's the rare dancer who finds her way to graduate school later. Many professional dancers never go to college. See e.g. (also in Dance Magazine)

What Directors Really Think of Ballet Dancers Going To College by Sarah Wroth

"In the ballet world, the phrase “going to college” is sometimes regarded as the musings of a dancer who’s not really serious about their craft. Although schools like Juilliard and Bennington College have made degrees acceptable for modern dancers for decades, the competitive ballet world (which often follows a philosophy of “the younger the better”) tends to discourage higher education."

***************

And this, from a story about a dancer with an unusually long and storied career who was able to make a post ballet career in contemporary dance:

When Ballet Is Your Life, What Does Life After Ballet Look Like? Wendy Whelan only ever wanted to dance. But what happens when you can't dance anymore?  by Chloe Angyal

 "Career paths out of ballet are notoriously narrow. Dancers usually skip college, and even the end of high school, to devote themselves to dancing in their late teens and early 20s, which means that when they retire from dancing, they’re out in the job market without an entry-level degree. Some dancers go on to teach or coach, and some to choreograph, though the latter path is often even less stable, predictable or lucrative than being a dancer. Some go into ballet-adjacent work, like dance photography. Some will be picked to run companies; Pacific Northwest Ballet, Miami City Ballet, Washington Ballet and Pennsylvania Ballet are all run by alumni of the New York City Ballet or American Ballet Theater. But there are only so many ballet companies to run, and turnover at the top can be infrequent."

Vacancy chains in urban housing

 Vacancy chains occur not just in labor markets, but also in housing markets. (Earlier this week I wrote about housing chains for hermit crabs that result from evictions.)  A vacancy chain in a housing market can be thought of as a moving chain: someone moves into a vacant house or apartment (perhaps a newly constructed one), and someone else moves into the home they vacated, and so on, until the chain ends when a person who was in some different market (e.g. in rental housing, or in a distant location) moves into the last identifiable home in the chain.

Here are two papers that explore what happens when newly constructed housing is relatively expensive. They find that the chain often reaches much more moderately priced housing, i.e. adding to the stock of expensive housing also makes more affordable, existing housing available to new occupants.

The first paper draws on data from a dozen American cities (from Atlanta to San Francisco):

The effect of new market-rate housing construction on the low-income housing market, by Evan Mast, Journal of Urban Economics, Available online 27 July 2021, https://doi.org/10.1016/j.jue.2021.103383

Abstract: I illustrate how new market-rate construction loosens the market for lower-quality housing through a series of moves. First, I use address history data to identify 52,000 residents of new multifamily buildings in large cities, their previous address, the current residents of those addresses, and so on for six rounds. The sequence quickly reaches units in below-median income neighborhoods, which account for nearly 40 percent of the sixth round, and similar patterns appear for neighborhoods in the bottom quintile of income or percent white. Next, I use a simple simulation model to roughly quantify these migratory connections under a range of assumptions. Constructing a new market-rate building that houses 100 people ultimately leads 45 to 70 people to move out of below-median income neighborhoods, with most of the effect occurring within three years. These results suggest that the migration ripple effects of new housing will affect a wide spectrum of neighborhoods and loosen the low-income housing market.

%%%%%%%%%%%

A more recent working paper draws on data from metropolitan Helsinki and reaches similar conclusions:

Bratu, Cristina and Harjunen, Oskari and Saarimaa, Tuukka, City-wide Effects of New Housing Supply: Evidence from Moving Chains (August 31, 2021). VATT Institute for Economic Research Working Papers 146, Available at SSRN: https://ssrn.com/abstract=3929243 or http://dx.doi.org/10.2139/ssrn.3929243

Abstract: We study the city-wide effects of new, centrally-located market-rate supply using geo-coded total population register data from the Helsinki Metropolitan Area. The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.

**********

Earlier:

Vacancy chains in housing for hermit crabs   

Blum, Y., A.E. Roth, and U.G. Rothblum "Vacancy Chains and Equilibration in Senior-Level Labor Markets," Journal of Economic Theory, 76, 2, October 1997, 362-411.

Working remotely may lessen income inequality between men and women: Claudia Goldin in the WSJ

 Here's Claudia Goldin in the WSJ, on how income inequality between men and women may be lessened by the growth of remote work. (She argues that women pay a price for flexible hours, since the highest paying jobs are "greedy" for long and on-call work.)

How the Pandemic Could Make the Future Brighter for Women in the Workplace. It could lead to less gender inequality at work, and more equity at home By Claudia Goldin Dec. 11, 2021

"Whereas the job with flexible hours paid far less than the greedy job before the pandemic, previously greedy jobs are now more flexible and the previously flexible jobs are now more productive. The working couple with children can now have a more equitable household without giving up as much income. The on-call parent will be able to compete for the previously greedy job, and employers will expand the previously flexible jobs, because these jobs have become more productive. As a result, the difference between the wages of the previously greedy and previously flexible jobs will narrow.

"Consider the mergers-and-acquisition work that once had to be done in Tokyo, or the contract that needed to be signed in Zurich. They actually don’t need to be done in person, we have learned. The on-call, at-home parent, generally the mother, hadn’t been able to do these transactions. But now they can be accomplished without being away during the evening and without flying across an ocean. The flexible job has become more productive and the greedy job has become more flexible."

What we know about labor market interviews

 Erling Skancke is on the job market from Stanford this year. You should interview him. If you do, you'll learn a lot about interviews, which are the subject of his job market paper, which provides a lot of new insight into an important practical set of isssues.

Skancke, Erling, Welfare and Strategic Externalities in Matching Markets with Interviews (November 10, 2021). Available at SSRN: https://ssrn.com/abstract=3960558 or http://dx.doi.org/10.2139/ssrn.3960558

Abstract: Recent debate in the medical literature has brought attention to issues with the pre-match interview process for residency and fellowship positions at hospitals. However, little is known about the economics of this decentralized process. In this paper, I build a game-theoretic model in which hospitals simultaneously decide on which doctors to interview, in order to learn their preferences over doctors. I show that increased interview activity by any hospital imposes an unambiguous negative welfare externality on all other hospitals. In equilibrium, both hospitals and doctors may be better off by a coordinated reduction in interview activity. The strategic externality is more subtle, and conditions are derived under which the game exhibits either strategic complementarities or substitutes. Moreover, an increase in market size may exacerbate the interview externalities, preventing agents from reaping the thick market benefits that would arise in the absence of the costly interviews. This effect increases participants' incentives to match outside of the centralized clearinghouse as markets become thicker, jeopardizing the long-term viability of the clearinghouse. The model also provides new insights into several market design interventions that have recently been proposed.

Blockchain job, with Sven Seuken, at Worldcoin

 Sven Seuken, a practical market designer for whom I have great respect, writes to ask that I advertise a job for a market designer.  Here is his email.

"I was wondering if you could advertise a market designer job on your blog. About six months ago, I have joined the Blockchain start-up Worldcoin (https://worldcoin.org/) and am now their Head of Economics and Chief Economist. We already have a team of six economists and computer scientists. But we are currently greatly expanding our team, looking for market designers, crypto economists, experimental economists, statisticians, etc., who are interested in developing practical incentive mechanisms that scale to more than a billion participants of the Worldcoin network. I believe that this is a fantastic opportunity for anyone interested in applying market design in practice. The positions are available on the junior and senior level, and they are available full-time or part-time. Anyone interested can contact me directly, or even better, directly apply here: https://worldcoin.org/job/4111358004

 Thank you very much!

Best,

Sven

 Prof. Dr. Sven Seuken

Head of Computation and Economics Research Group

University of Zurich

 Web: https://www.ifi.uzh.ch/en/ce/people/seuken.html

 Associated Faculty at the ETH AI Center

Co-Director of the Zurich Center for Market Design

Head of Economics and Chief Economist at Worldcoin"

Market design in Tokyo

 Fuhito Kojima and Hiroaki Odahara report on some of the projects presently underway at the University of Tokyo Market Design Center (UTMD), which include matching for child care, for medical residencies, and for internal labor markets.

Kojima, F., Odahara, H. Toward market design in practice: a progress report. Japanese Economic Review, (2021). https://doi.org/10.1007/s42973-021-00103-w

Abstract: In recent years, many developments have been made in matching theory and its applications to market design. This paper surveys some selected topics from this research area and describe our own work. We also describe the newly established University of Tokyo Market Design Center (UTMD), which works as a vehicle for practical implementation.

Keeping the market for new economists thick: AEA guidelines on timing of interviews

 Below are some guidelines suggested by the American Economic Association for the conduct of this year's job market for new Ph.D.s

AEA Guidance on Timeline for 2021-22 Economics Job Cycle

"The AEA Executive Committee, in conjunction with its ad hoc Committee on the Job Market, recognizes that it is to the benefit of the profession if the job market for economists is thick, with many employers and job candidates participating in the same stages at the same time.  Moreover, the AEA's goals of fairness, inclusion, and diversity are fostered by having a timeline that remains widely accepted, even as public health conditions necessitate a virtual ASSA meeting again this year. With these goals in mind, and in light of inquiries from both students and departments about how to proceed, the Association asks that departments and other employers consider the following timeline for initial interviews and “flyouts” in the upcoming job cycle.

Interview invitations
The AEA suggests that employers wait to extend interview invitations until at least Thursday, December 2, 2021.

Rationale: the AEA will deliver signals from job candidates to employers on December 1. We suggest that employers review those signals and incorporate them into their decision-making before extending interview invitations. Job candidates from under-represented groups may lack informal networks and thus, may especially rely on the signals to convey their interest. Waiting to review the signals before issuing invitations promotes a fairer, more equitable process.

We also ask that all employers indicate on EconTrack when they have extended interview invitations; this allows candidates to learn about the status of searches without visiting websites posting crowd-sourced information and potentially inappropriate other content.

Interviews
The AEA suggests that employers conduct initial interviews starting on Monday, January 3, 2022, and that all interviews take place virtually; i.e. either by phone or online (e.g. by Zoom). We suggest that interviews not take place during the AEA meeting itself (January 7-9, 2022).

Rationale: In the past, interviews were conducted in person at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the in-person meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. Given that the 2022 AEA/ASSA meetings will be entirely virtual, we suggest that interviews NOT take place on the meeting dates to allow job candidates and interviewers to participate in the conference.

We recommend that employers wait until January 3 to interview candidates because job candidates may have teaching or TA responsibilities in December, and to ensure that candidates have accurate expectations of the timing of the stages of the market. An unraveling of the market works against the Association’s goal of having a thick market at each stage and also against candidates having uniform expectations of the market’s timing. All interviews should be conducted by phone or online to prevent risk of exposure to COVID, and to promote equity among the candidates.

Flyouts and offers
Flyouts and offers generally happen at times appropriate for the employer, and the AEA sees no reason to suggest otherwise.  We ask that all employers indicate on EconTrack when they have extended flyout invitations and closed their searches.

Job market institutions and mechanisms
Please keep in mind the various job market institutions and mechanisms created by the AEA to improve the job market:

• The JOE Network includes a database of job openings for economists.

  • Employers may sign up here: https://www.aeaweb.org/joe/employer.

  • Job candidates may search the database here: https://www.aeaweb.org/joe/listings.

  • The JOE Network has an electronic clearinghouse for job candidates to submit job applications. Job candidates may register here: https://www.aeaweb.org/joe/candidate.

• The AEA ad hoc Committee on the Job Market releases data and guidance on the job market here: https://www.aeaweb.org/joe/communications.

• EconTrack: a board on which employers can indicate when they have extended interview and flyout invitations, and closed their search: https://www.aeaweb.org/econtrack.

• EconSpark: a moderated forum in which one can discuss topics of interest to the profession, including the job market: https://www.aeaweb.org/forum/categories.

Thank you for your attention to this initiative."

Preference Signaling and Worker-Firm Matching: Evidence from Interview Auctions, by Laschever and Weinstein

 Here's a recent working paper from the IZA Institute of Labor Economics concerned with the importance of signals of interest in labor market matching:

Preference Signaling and Worker-Firm Matching: Evidence from Interview Auctions, by Ron A. Laschever and Russell Weinstein,  IZA DP No. 14622

Abstract: "We study whether there are improvements in worker-firm matching when employers and applicants can credibly signal their interest in a match. Using a detailed résumé dataset of more than 400 applicants from one university over five years, we analyze a matching process in which firms fill some of their interview slots by invitation and the remainder are filled by an auction. Consistent with the predictions of a signaling model, we find the auction is valuable for less desirable firms trying to hire high desirability applicants. Second, we find evidence that is consistent with the auction benefiting overlooked applicants. Candidates who are less likely to be invited for an interview (e.g., non-U.S. citizens) are hired after having the opportunity to interview through the auction. Among hires, these candidates are more represented among auction winners than invited interviewees, and this difference is more pronounced at more desirable firms. Finally, counterfactual analysis shows the auction increases the number and quality of hires for less desirable firms, and total hires in the market

...

"Auctions for interview slots may address two important frictions in the matching process: uncertainty over applicant quality, and uncertainty over the likelihood that an applicant accepts an offer. Even if employers can successfully identify desirable applicants, there remains the challenge of identifying which candidates are truly interested in the job and would accept an o↵er with high probability. In recent years the cost of job applications has fallen as more postings and applications are online. This

further raises the potential that applicants will have a low likelihood of accepting an offer.

...

"Though not common, there are a few markets in which all applicants have an equal opportunity to credibly signal their preferences for an employer. One example is the American Economic Association (AEA) job signaling mechanism, which allows candidates to send a signal of interest to two departments. Importantly, there is no requirement that employers interview the applicants sending the signal. In contrast, in our setting an employer is compelled to meet with some signaling job seekers.

"A second example, and the focus of this paper, is the auction system used in the market for professional master’s degree students, most commonly MBA students, at many top-ranked programs. These programs allow employers to choose some percentage of the applicants they interview, but require the remainder of the interview slots are allocated through an auction. Typically, firms first invite applicants for interviews, before applicants have had the opportunity to signal. Next, there is an auction for the remaining interview slots, and thus auction participants are students who were not invited for an interview by the firm. Each student is provided with an equal allotment of “bid points,” and the auction winners are guaranteed interviews

with the firm."

Matching Foreign Service officers to positions: the labor market at the State Department

 Many public servants became discouraged during the Trump administration, and those who serve in U.S. Embassies and consulates, and at the State Department in Washington, are no exception.  But the demands of overseas assignments make their internal labor market a matching market with many specific requirements.

Here's a new report:

Retention Issues at the State Department

"In a new report published by the Institute for the Study of Diplomacy, Constanza Castro Zúñiga, Mojib Ghaznawi, and Caroline Kim highlight the retention crisis at the State Department. The Harvard Kennedy School Master in Public Policy (MPP) graduates surveyed 2,853 Foreign Service Officers (FSOs) and Foreign Service Specialists (FSSs) on their experiences at State.

"Their report finds that “31.42% (797) of current officers surveyed are seriously considering leaving the Foreign Service and are actively exploring their options. Of these officers, 31.27% (247) plan to leave in the next year and 56.58% (447) plan to leave in the next five years. This indicates a clear discontent within the Foreign Service that will increase attrition above the Department’s historical averages” (p.11).

"The authors conclude that “FSOs and FSSs feel lost in a workplace that lacks accountability and transparency, to the point where our data suggests a coming exodus on the horizon. While it is impossible to design the perfect system, the Department can strive to create a Foreign Service that feels fair, equitable, and inclusive. However, that can only happen if the Department understands what is driving people away. By surveying over one-fifth of the State Department’s officer corps, we discovered the four biggest drivers that motivate members to leave the Department. By targeting structural and cultural changes to address families, assignments, promotions, and bias, the Department can begin a proactive approach to address retention. However, this will require leadership to listen from the bottom-up and implement from the topdown. If the State Department can begin implementing the recommendations that we have suggested here, it will be on its way to having a Foreign Service that is truly talented and representative” (p. 41).

"Recommendations include extension of Leave Without Pay (LWOP) for Department employees; updated and more flexible remote work policies; a centralized preference matching system to streamline, standardize, and increase transparency in the assignments process; and that the State Department should consider conducting an annual Organizational Climate Survey."

***********

The report itself is here:  https://georgetown.app.box.com/s/vu5gk9qfh6vd0uc6feagqu1u6o7mmawc 

Here's part of the discussion of the matching market: 

"The  current  assignments  process  at  State  is  broken.  Bidders  and  hiring  managers  waste  considerable  time and energy under the current system trying to extract commitments from each other. Rules related to  bidding  prevent  commitments  and  formal  offers  before  imposed  deadlines,  relying  on  informal “handshakes”  of  mutual  interest.  Pressure  on  both  sides  to  secure  desirable  positions  or  candidates  leads to suboptimal outcomes in a process that is growing increasingly non-transparent, stressful, time-consuming, and inequitable.

...

" The Bureau of Global Talent Management’s Office of Career Development and Assignments (GTM/CDA) is collaborating with the National Resident Matching Program (NRMP)58 to design, execute, and evaluate a pilot use of a preference-matching algorithm in bidding and assignments. NRMP will adapt its ranking process to account for CDA bidding rules on eligibility.  NRMP will provide a software platform for collecting rank ordered preferences from bidders, hiring-managers, and bureaus.  CDA  and  NRMP  will  develop  training  and  communication  materials  for  bidders,  hiring  managers, and bureau decision-makers on the use of the algorithm during one or more regular bidding cycles, as well as provide customer support on using NRMP’s proprietary software. Using the collected preferences, NRMP will run the algorithm to produce matches for bureaus to use as the basis for handshake offers for assignments."

Redesigning the US Army's Branching Process, by Kyle Greenberg, Parag A. Pathak & Tayfun Sönmez,

 Here's a new NBER working paper that marks a significant step forward in matching soldiers to positions.

Mechanism Design meets Priority Design: Redesigning the US Army's Branching Process by Kyle Greenberg, Parag A. Pathak & Tayfun Sönmez, NBER WORKING PAPER 28911 DOI 10.3386/w28911,  June 2021

Army cadets obtain occupations through a centralized process. Three objectives – increasing retention, aligning talent, and enhancing trust – have guided reforms to this process since 2006. West Point’s mechanism for the Class of 2020 exacerbated challenges implementing Army policy aims. We formulate these desiderata as axioms and study their implications theoretically and with administrative data. We show that the Army’s objectives not only determine an allocation mechanism, but also a specific priority policy, a uniqueness result that integrates mechanism and priority design. These results led to a re-design of the mechanism, now adopted at both West Point and ROTC.

One of the unusual features of this paper is that the first author is both an economist and an Army officer, working in West Point's Office of Economic and Manpower Analysis:

"MAJ Greenberg is an Assistant Professor of Economics in the Department of Social Sciences and is OEMA’s Director of Long-Term Research. His primary areas of research are labor economics and public finance, with a focus on veteran employment, disability compensation, and military labor markets. Currently a Major in the U.S. Army, Kyle served tours in Iraq and Germany prior to teaching at the United States Military Academy. He earned a BS in Mathematics from the United States Military Academy in 2005 and a Ph.D. in Economics from the Massachusetts Institute of Technology in 2015."

*********

Here's a related earlier post, in which Major Greenberg discusses some of the design issues still facing the Army's assignment systems.

Monday, December 7, 2020

Officer assignment in the U.S. Army

The pandemic and the job market for economists

 It's been a tough year on the academic job market. Here's hoping it recovers quickly.

Committee chair John Cawley submitted the following Report of the Ad Hoc Committee  on the Job Market  AEA Papers and Proceedings 2021, 111: 801–802 https://doi.org/10.1257/pandp.111.801

" To share information about how COVID-19 is affecting the job market for PhD economists, we have regularly released memos providing information on the demand and supply of new PhD economists. These memos can be found on our committee’s webpage, but below is a summary of the most recent information.

a. Regarding labor demand: the overall number of job openings on JOE in 2020 was down 26.5 percent from 2019. The number of full-time academic jobs in the United States was down 52.8 percent, and the number of full-time academic jobs outside the United States (and listed on JOE) was down 20.3 percent. The number of fulltime nonacademic jobs listed on JOE was down 17.7 percent from 2019.

b. Regarding labor supply: the number of new JOE job candidate accounts created by students was down 19.1 percent from 2019, and the number of people sending AEA signals was down 14.9 percent."

Keeping pilots in the Air Force, in the face of renewed, post-pandemic demand from airlines

 I spent a good deal of time last year working on understanding the internal labor market of the Air Force, and how it interacts with the larger American labor market.

During the pandemic, with airlines cutting back on flights, it may have seemed as if the problem of retaining pilots had eased. But airline demand for pilots is growing,rand the Air Force will have to think creatively about retention of pilots who are at or near the end of their service obligation.

Here's a short piece in Defense One, by two Air Force officers:

The USAF’s Bad Bets on Pilot Retention Show It Needs Outside Help. Service leaders think the same old tactics can reverse a pilot shortage in a resurging economy.  By BRIAN KRUCHKOW and TOBIAS SWITZER

"Despite the pandemic, the Air Force is still short of pilots, thanks to low retention and strong airline hiring. Before COVID-19 reached the United States, the Air Force had a deficit of more than 2,000 pilots, requiring $15 billion to train replacements. The pandemic temporarily paused airline hiring to the Air Force’s relief, reducing pilot losses, but Covid-19 also hampered pilot training, leaving the overall shortage almost unchanged. Instead of using the reprieve as an opportunity to try bolder retention initiatives, the Air Force recently placed a large wager against airline recovery and renewed airline pilot hiring.

...

"Before the pandemic, the Air Force offered retention contracts as short as three years to pilots completing their initial ten-year commitments. Seizing on the collapse of airline hiring in 2020, though, the service changed the terms of its contracts. Gone are three- and four-year contracts; the shortest pilot contract is now five years, which gets you about 70 percent of the maximum retention bonus. To get the full amount authorized by Congress—$35,000 per year—the Air Force requires at least an eight-year commitment. These are hardball terms compared to past years and are a strong bet that airline pilot hiring will be weak for an extended period. 

...

"Air Force pilots are poised to leave active duty, not stay, according to our research. Despite the incredibly dire economic and health conditions in 2020, only 51 percent of the Air Force’s eligible pilots signed retention contracts, a small increase from recent years. Of those pilots who signed retention contracts last year, though, we found that 33 percent signed on for only three years. The rest stayed on active duty without service commitments and are now free agents able to depart on short notice. Air Force pilots are keeping their options open and believe airline hiring will return soon, offering better opportunities.  

*****************

Earlier:

Tuesday, December 1, 2020

The labor market that is the military: a report from the National Academies of Science, Engineering, and Medicine

The market for radiation oncologists

 Dr. Wes Talcott at Yale points me to some contemporary discussion of the labor force in radiation oncology.  As with a number of other medical specialties, there's a tension between the number of staff needed to prep a patient for treatment and the number of new board certified specialists needed to supervise such treatment. Residents fill the first kind of position, and time and training transforms them into the second.

The contemporary discussion seems to focus on proposals that individual residency programs should reduce the number of residency positions they need to fill, in a decentralized manner, either by offering fewer positions in the Match, or declining to fill positions that aren't filled in the main Match. There is a concern that a coordinated reduction in positions would invite antitrust scrutiny, although other specialties (such as gastroenterology*) have managed that.

Here's an article from the International Journal of Radiation Oncology*Biology*Physics:

Chicken Little or Goose-is-Cooked? The State of the US Radiation Oncology Workforce: Workforce Concerns in US Radiation Oncology by Chirag Shah, MD and Trevor J. Royce, MD, MS, MPH, Published:March 11, 2021 DOI: https://doi.org/10.1016/j.ijrobp.2020.11.056  

"oversupply worries have reached a fever pitch among trainees, with the job market being the primary concern and 52% perceiving an increasingly competitive market10; these concerns have manifested in a precipitous decline in student interest, with 14% of RO residency positions unmatched in the 2020 Match (compared with previous rates of near 0%) and worse numbers expected for the 2021 match."

#####################

Here's a reply, suggesting that the current situation presents an opportunity for the RO profession to remake itself in various ways:

When in a Hole, Stop Digging: In Reply, Workforce Concerns in US Radiation Oncology  Louis Potters, MD, FASTRO, FACR,  Published:March 11, 2021, International Journal of Radiation Oncology*Biology*Physics, DOI: https://doi.org/10.1016/j.ijrobp.2020.12.024

#####################

A different kind of reply is that fewer U.S. medical graduates are applying for RO residency positions in the Match:

No Longer a Match: Trends in Radiation Oncology National Resident Matching Program (NRMP) Data from 2010-2020 and Comparison Across Specialties  by Chelain R.GoodmanM.D., Ph.D.aAustinSimM.D., J.D.hElizabeth B.JeansM.Ed, M.D.dJustin D.AndersonM.D.bSarahDooleyM.D.cAnkitAgarwalM.D., M.B.A.gKarenTyeM.D., M.S.eAshleyAlbertM.D.fErin F.GillespieM.D.iRahul D.TendulkarM.D.kClifton D.FullerM.D., Ph.D.aBrian D.KavanaghM.D.jShauna R.CampbellD.O. Available online 11 March 2021,In Press, Journal Pre-proof International Journal of Radiation Oncology*Biology*Physics https://doi.org/10.1016/j.ijrobp.2021.03.006

"In the 2020 NRMP, 122 US MD senior graduates preferentially ranked radiation oncology, a significant decrease from 2010-2019 (Median [Interquartile Range],187 [170-192], p<0.001). Across all specialties, radiation oncology experienced the greatest declines in the 2020 NRMP cycle relative to 2010-2019 in both the number of ERAS applicants from the US and Canada (-31%) as well as the percentage of positions filled by US MD or DO senior graduates (-28%). Of 189 available positions, 65% (n=122) were filled by US MD senior graduates who preferentially ranked radiation oncology as their top choice of specialty, a significant decrease from 2010-2019 (Median=92% [IQR, 88-94%], p=0.002). The percentage of radiation oncology programs and positions unfilled prior to the SOAP was significantly increased in 2020 compared to 2010-2019 (Programs: 29% versus 8% [5-8%], p<0.001; Positions: 19% versus 4% [2-4%], p<0.001). Despite >99% (n=127 of 128) of US senior applicants successfully matching in the 2020 NRMP, 16 of 24 remaining unfilled positions were filled via the SOAP. Radiation oncology was the top utilizer of the 2020 SOAP, filling 15% of total positions versus a median of 0.9% [0.3-2.3%] across all specialties (p<0.001).

Conclusions

Supply of radiation oncology residency positions now far exceeds demand by graduating US medical students. Efforts to nullify a market correction revealed by medical student behavior via continued reliance on the SOAP to fill historical levels of training positions may not be in the best of interest of trainees, individual programs, or the specialty as a whole."

##################

*The reduction in gastroenterology residency positions was combined with an increase of a year in required training, and this combination contributed to the unraveling of the gastro Match, which has since been restored. See the background discussion in

McKinney, C. Nicholas, Niederle, Muriel and Alvin E. Roth, "The collapse of a medical labor clearinghouse (and why such failures are rare)," American Economic Review, 95, 3, June, 2005, 878-889.

***************

Update: here's a discussion of the RadOnc situation by the Rad Onc Virtual Visiting Professor Network

A shortage of medical residency positions

 Rising numbers of American medical graduates, combined with more constant numbers of medical residencies (which are required for medical licensure), leave more graduates of international medical schools unmatched and underemployed, including many Americans who studied medicine overseas.

The NY Times has the story:

‘I Am Worth It’: Why Thousands of Doctors in America Can’t Get a Job.  Medical schools are producing more graduates, but residency programs haven’t kept up, leaving thousands of young doctors “chronically unmatched” and deep in debt.   By Emma Goldberg

"Dr. Cromblin is one of as many as 10,000 chronically unmatched doctors in the United States, people who graduated from medical school but are consistently rejected from residency programs. The National Resident Matching Program promotes its high match rate, with 94 percent of American medical students matching into residency programs last year on Match Day, which occurs annually on the third Friday in March. But the match rate for Americans who study at medical schools abroad is far lower, with just 61 percent matching into residency spots.

...

"The pool of unmatched doctors began to grow in 2006 when the Association of American Medical Colleges called on medical schools to increase their first-year enrollment by 30 percent; the group also called for an increase in federally supported residency positions, but those remained capped under the 1997 Balanced Budget Act. Senator Robert Menendez, Democrat of New Jersey, introduced the Resident Physician Shortage Reduction Act in 2019 to increase the number of Medicare-supported residency positions available for eligible medical school graduates by 3,000 per year over a period of five years, but it has not received a vote. In late December, Congress passed a legislative package creating 1,000 new Medicare-supported residency positions over the next five years."

Regulating the timing of job search: evidence from the labor market for new college graduates, by Hiroko Okudaira

 

Regulating the timing of job search: evidence from the labor market for new college graduates

Hiroko Okudaira, Doshisha University, Labour Economics, Volume 67, December 2020, 101941

Abstract: In entry-level labor markets, students search for post-graduation positions well in advance of their actual start dates, prompting debates over regulating job search timing. This study examines a unique case concerning the new college graduate labor market in Japan, where a guideline revision successfully delayed the timing of job searches and forced market participants to search under a shorter horizon. Based on differential exposures to the guideline revision across regions, I find that the revision significantly increased the employment rate at graduation. No positive effect was observed on students’ human capital investment. Additional analyses offers one plausible interpretation, that the positive employment effect was driven by thick market externality.

"This paper provides the first evidence on the consequences of regulating job search timing by exploiting the unique case of the new college graduate job market in Japan, where a guideline revision successfully delayed search timing and forced market participants to search under a shorter horizon. 

...

"By 2009, the job search timing advanced to the middle of the junior year, nearly 18 months prior to graduation. In 2010, the biggest business association announced it would revise the guideline and establish a job search start date for the first time since its introduction. 

...

"Unlike previous cases, however, the revision successfully delayed the overall timing due to the closure of a popular online platform until the first date specified in the revision. Because college students start communicating with firms’ personnel via these online platforms by registering for first-step seminars and because these online platforms were so dominant, the market was diluted substantially in that much fewer firms and students were available in the market prior to the first date.

***********

Xiaolin Xing and I included some of the unsuccessful attempts to control the timing of the college graduate market in Japan in 

Roth, A.E. and X. Xing, "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, 84, September, 1994, 992-1044

Jobs for market designers in Washington D.C. and at Facebook

 I still get a small thrill when I see jobs for market designers appear, appropriately, in places that not so very long ago hadn't heard of market design.. Here's an ad from the Congressional Budget Office.

Climate and Energy Economist, Congressional Budget Office – Washington DC, Published October 2, 2020  

"The Energy, Environment, and Infrastructure Unit conducts research and analysis on certain topics of interest to the Congress, including climate change, energy and related environmental issues, transportation and infrastructure, and federal policy toward research and development. In the coming years, the unit expects to expand its capacity to model the effects of climate change and climate change policy on the budget and the economy.

...

"Qualifications: Applicants must have either a Ph.D. in economics or a related discipline or a master’s degree with five years of experience in one of those fields. They should also have strong quantitative and modeling skills; preference will be given to candidates with experience modeling energy markets or systems. A background in industrial organization or market design, public finance, or a related microeconomic field is desirable"

********

And here's an ad for a crypto-economist at Facebook:

Novi Economics/Blockchain at Facebook

"Description: Novi is a Facebook subsidiary whose goal is to provide financial services for Libra, a new global currency powered by blockchain technology. The first product Novi will introduce is a digital wallet, which will be available in Messenger, WhatsApp and as a standalone app. The first version of Novi will support peer-to-peer payments and a few other ways to pay such as QR codes which small merchants can use to accept payments in Libra. Over time there will be many other use-cases for Novi including in-store payments, integrations into Point-of-Sale systems, and more. When launched, Novi will have strong fraud and privacy protections. The Novi digital wallet is expected to launch in 2020.

"The Novi economics team is seeking exceptional candidates from all fields, with a special focus on applied microeconomics, development, macroeconomics, finance, and market design, to join our team. Individuals in this role are expected to have deep expertise and the ability to leverage economic theory into real-world, practical solutions for blockchain based problems."