What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes

What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes

By
Susan Athey, Larry Katz, Alan Krueger, Steve Levitt, James Poterba
American Economic Review. May
2007, Vol. 97, Issue 2, Pages 512–520

Economists devote considerable effort to grad­u­ate stu­dent edu­cation bu­t have condu­cted rela­tively little research on the determinants of stu­dent performance or placement in the job market. Do gradu­ate stu­dents who do well in core microeco­nomics (micro) cou­rses also do well in core mac­roeconomics (macro) and econometrics (metrics) cou­rses? Are stu­dents who achieve higher grades in their first­ year core classes or general exams more likely to complete their PhD and obtain higher ranked positions in the job market? In an attempt to answer these qu­estions, we assem­bled a rich dataset on 1,029 economics gradu­ate stu­dents who enrolled at Harvard University, Massachu­setts Institu­te of Technology (MIT), Princeton University, Stanford University, or the University of Chicago in the 1990s. These schools were selected becau­se, in 1993, they had the five highest ranked economics PhD programs, accord­ing to the National Research Cou­ncil (NRC). Ou­r resu­lts indicate that stu­dents’ grades in requ­ired core cou­rses are highly correlated across su­bjects. The PhD admissions com­mittee’s evalu­ation of a stu­dent predicts first­ year grades and PhD completion, bu­t not job placement. First­ year performance is a strong predictor of PhD completion. Most importantly, we find that first­ year micro and macro grades are statistically significant predictors of stu­dent job placement, even conditional on PhD comple­tion. Conditional on first ­year grades, Gradu­ate Record Examination (GRE) scores, foreign citi­zenship, sex, and having a prior master’s degree do not predict job placement. Stu­dents who attended elite u­ndergradu­ate u­niversities and liberal arts colleges are more likely to be placed in top­ ranked academic jobs.