How to Learn to Stop Worrying and Love the Job Market

This article conveys information and advice about the job market process for candidates completing their PhDs in economics in the United States. I discuss the mechanics of the job market process in great detail, from the preparatory work before the market starts to the steps after accepting an offer. Throughout, I answer common job market‐related questions and discuss ways to make the process more manageable and less stressful. The focus is on students from non‐top‐tier universities, although the advice applies equally well to students from top schools.     

A Guide to Graduate Study in Economics: Ranking Economics Departments by Fields of Expertise

Ph.D. programs in economics are ranked overall and by subject field. The results provide insight to students researching graduate programs in economics in specific subject fields. Results indicate that (i) differences in overall research productivity measures diminish as a university's rank declines; (ii) a university ranked highly in a particular subject field may be the result of a single, extremely productive faculty member; and (iii) many programs outside the traditional top 20 programs are ranked high in specific subject fields.     

AN INSTITUTIONAL ANALYSIS OF ENVIRONMENTAL POLLUTION DISPUTES IN TAIWAN: CASES OF “SELF‐RELIEF”

During the late 1980s and early 1990s in Taiwan, people's protests against environmental pollution often took the form of “self‐relief,” meaning that they attempted to fight polluters using their own resources, without relying on legal or administrative procedures. Why did such an extreme form of dispute become so widespread? What institutional changes did these movements bring about? These questions are analyzed using the analytical framework of “law and economics.” Our research shows that self‐relief functioned to a certain extent as a means of realizing quick compensation for victims, and for reflecting the opinions of local people concerning development projects; in addition, it served to promote the formulation of law and administrative systems. However, as it was based on direct negotiations between the parties concerned, the outcome of each dispute only reflected the transient balance of forces, and the experience gained in negotiations was not accumulated as a social norm.     

The Role of Teaching and Teacher Training in the Hiring and Promotion of Ph.D. Economists

Surveys suggest that a majority of graduate students seek academic positions after completing their degree. We survey groups involved in the job market to determine the roles of teaching and research in hiring and the subsequent success of new faculty. We find that while characteristics that signal research potential are highly valued by both graduate directors and department chairs, there are significant discrepancies in the extent that teaching is valued in the hiring process across institution types. Furthermore, although new faculty devote half of their time to teaching, only half of them agree that graduate school prepared them to teach.     

Post‐Injury Work Outcomes Revisited

We use data for Ontario workers with permanent impairments resulting from work‐related injuries to investigate the complex relationships among post‐injury work outcomes: wages, accommodations, returning to the same or different employer, and duration of work absence. We argue the different aspects of post‐injury work experience may be jointly determined, making post‐injury job characteristics endogenous in a duration model. To explore the endogeneity issues we instrument post‐injury job variables from first‐stage equations and compare results from this “informed” model to a “naive” model that treats the variables as exogenous. We find that returning to one's pre‐injury employer is associated with more favorable post‐injury work outcomes, including higher wages, greater likelihood of job accommodations, and shorter durations of work absence relative to workers who change employers. We also find substantial differences between the naive and informed models, with accommodations having the predicted negative effect on duration only after we control for endogeneity.     

PCAOB Inspections: Public Accounting Firms on “Trial”

The objective of our article is to obtain a better understanding of how auditors anticipate the potential for PCAOB inspection, experience the inspection, cope with the consequences of the inspection, and understand the PCAOB's influence within the context of professionalism. We use a qualitative approach that uses both surveys (55) and interviews (20) of auditors (of varying rank and firm) across a five‐year period (2012–2017). Respondents suggest that PCAOB inspectors are powerful, representing the “prosecution,” “judge,” and “jury” of the auditing profession. We therefore use a structural metaphor of the PCAOB inspection as a judicial “trial.” By controlling the criteria used to evaluate performance, inspectors have the power to repeatedly “subpoena,” “interrogate,” and return a “verdict” on the firm (auditor); those judged as “guilty” require supervised “probation.” This process is perceived as having improved audit quality but at a cost. Passing an inspection is so important that auditors (firms) have resorted to impression management strategies and “functionally stupid” work practices (e.g., excessive documentation, a decrease in critical thinking as a result of a “box ticking” approach to auditing). Furthermore, some respondents believe that being a good auditor has come at the expense of being a good accountant; the emphasis on audit process and concurrent de‐emphasis on technical accounting could ultimately lead to audits themselves falling short. In addition, it is evident that inspectors and auditors differ in their perceptions of risk, likely manifesting because inspectors are standards‐focused while auditors (firms) are methodology‐focused. Finally, the inspection process has created excessive stress and tension, beyond budget and fee pressures, which some auditors perceive as affecting the pool of talented auditors that firms may be able to attract and retain in the future.     

“Post‐Truth,” “Alternative Facts” and “Fakenomics”

South African companies are accused of hoarding profits to accumulate large amounts of “idle” cash, as well as of being the perpetrators of massive illegal capital flight. This paper argues that much of the claimed corporate cash is either offshore or belongs to banks. It reminds that bank deposits increase when companies borrow, not when they retain profits. It shows, too, that measures of massive capital flight actually reflect data errors. Exaggerating, through faulty methodology the extent to which companies have cash or may be involved in illegal capital flight is unhelpful. It exacerbates already‐fraught government‐business relations, and complicates the search for solutions to South Africa's economic problems.     

Ranking U.S. Economics Programs by Faculty and Graduate Publications: An Update Using 1994–2009 Data

This article ranks academic institutions by pages published in top economics journals over the 1994–2001 and 2002–2009 periods. Because it uses a methodology similar to several earlier articles, this article permits a consideration of how institutions' ranks have changed over the past 35 years. I construct rankings based on publications by individuals affiliated with each institution, by faculty members in the economics departments at each institution, and by alumni of each doctoral program. With few exceptions, the positions of programs near the top of the rankings change little over time. However, much more dramatic changes in rank occur for lower‐ranked institutions.     

A Primer for New Teachers of Economics

In many economics programs, both graduate students and new assistant professors are thrown into the classroom without guidance, with the potential for negative ramifications that can last throughout their careers as teachers. This article is a primer in which we offer unique insights into useful methods and practices for new teachers in the economics profession. We discuss organizational and logistical issues that new teachers must consider and then offer our advice on specific pedagogical tools and techniques. Following the growing literature on the benefits of student‐centered and interactive instruction, we focus on ways instructors can move away from the traditional “chalk and talk” approach. We organize and present these alternative pedagogies in terms of their level of complexity and time required. We conclude with suggestions and resources for the continued growth and development of new teachers in economics.     

Learning the “Craft” of Auditing: A Dynamic View of Auditors' On‐the‐Job Learning

We investigate how auditors learn the technical aspects of their professional role while performing client engagements, and how that learning process has been shaped by changes in societal, economic, and regulatory forces. Prior studies explicitly recognize that auditors need social skills and demeanor consistent with professional norms as well as requisite knowledge, but those studies generally focus on the processes through which new auditors are molded toward consistency with social norms. In contrast, we focus on forces affecting the transfer of technical knowledge from supervisor (guide) to subordinate (learner) in the everyday work setting. Our evidence derives from semi‐structured interviews with 30 relatively new and more experienced audit partners at one Big 4 firm, thus spanning multiple “generations” of experience. Results confirm that auditors primarily acquire technical knowledge on the job, through the interactions among individual engagement team members. However, partners express concern about changes in the practice environment that may limit effectiveness of on‐the‐job learning, including characteristics of personnel, the approach to formal training at induction, supervisors' reluctance to provide candid feedback, regulatory and economic pressures, and the increased distraction, and reduced interpersonal contact associated with the use of information technology. At the end of the day, our findings raise implications for practice regarding the difficulty of developing effective learning conditions for auditors in the face of these challenges.     

Salience and the Disposition Effect: Evidence from the Introduction of “Cash‐Outs” in Betting Markets

The disposition effect describes the tendency of investors to sell assets that have increased in value since purchase, and hold those that have not. We analyze the introduction of betting market “Cash‐Outs,” which provide a continual update—and therefore increase the salience—of bettors' paper profits/losses on each bet. We find that the introduction of Cash‐Out increased the disposition effect in this market, as punters sold their profitable bets with greater frequency than before. We do not, however, find that the disposition effect has any impact on asset prices, either before or after this intervention.     

Field publishing performance of U.S. economics departments

Conclusion The purpose of this study is to reduce information costs in the market for graduate education in economics and the market for Ph.D. economists by providing information on research concentration in each of 19 fields for 1980–1986. Some variation in publishing performance across fields is found in highly regarded universities. Unexpected faculty strength is discovered in some middle level departments for particular fields. Among middle- and lower-ranked departments, substantial publishing diversity across fields is evident.     

Public Company Audits and City‐Specific Labor Characteristics

Prior research emphasizes the centrality of audit offices in understanding auditing practices, and documents significant interoffice variation in audit outcomes based on industry expertise and office size. Our study examines how two city‐specific labor characteristics also affect audit offices and local audit markets: the city's average educational attainment, and the number of accountants in a city, which proxy for a city's human capital. Our argument draws on the urban economics literature and predicts that the level of human capital in a city is positively associated with an audit office's ability to conduct high‐quality audits. As expected, there is a positive association between audit quality (quality of audited earnings and accuracy of going‐concern reports) and average education level in the city in which the lead engagement office is located. This association is generally significant for both Big 4 and non‐Big 4 offices, but is relatively stronger for non‐Big 4 firms that are more tied to local labor markets. A company is also more likely to choose a non‐Big 4 auditor in cities with higher educational levels and relatively more accountants, and there is evidence of higher non‐Big 4 audit fees as a city's education level increases. Collectively, these results suggest that local labor characteristics affect audit offices, audit quality, and the ability of non‐Big 4 auditors to compete with Big 4 auditors in the audits of public companies.     

The Great Depression: Mises vs. Fisher

Ludwig von Mises established the foundations of modern Austrian economics while Irving Fisher established the foundations of modern mainstream macroeconomics and central bank policy. Fisher helped create and was a proponent of mathematical economics, statistics and index numbers, and a monetary policy that “stabilized” the value of the dollar. Fisher claimed that his scientific approach established a new era of prosperity during the 1920s. Mises published a book in 1928 that critiqued Fisher’s approach and predicted that it would lead to an economic crisis and collapse. Before the stock market crash in 1929 Fisher proclaimed a perpetual prosperity for the economy and continued to recommend investing in stocks long after the market had collapsed. In this important case study, Mises passed the “market test” while Fisher lost his personal fortune during an economic crisis that his economics help create.     

The Impact of R&D Intensity on Demand for Specialist Auditor Services*

The audit fee research literature argues that auditors' costs of developing brand name reputations, including top‐tier designation and recognition for industry specialization, are compensated through audit fee premiums. Audited firms reduce agency costs by engaging high‐quality auditors who monitor the levels and reporting of discretionary expenditures and accruals. In this study we examine whether specialist auditor choice is associated with a particular discretionary expenditure ‐ research and development (R&D). For a large sample of U.S. companies from a range of industries, we find strong evidence that R&D intensity is positively associated with firms' choices of auditors who specialize in auditing R&D contracts. Additionally, we find that R&D intensive firms tend to appoint top‐tier auditors. We use simultaneous equations to control for interrelationships between dependent variables in addition to single‐equation ordinary least squares (OLS) and logistic regression models. Our results are particularly strong in tests using samples of small firms whose auditor choice is not constrained by the need to appoint a top‐tier auditor to ensure the auditor's financial independence from the client.     

A Discussion of “Audit Review: Managers' Interpersonal Expectations and Conduct of the Review”

Gibbins and Trotman's study both explores reviewer attributes that auditors judge to influence review quality and replicates earlier, largely experimental findings about preparer and reviewer decision behavior. Such exploration and intra‐method replication create opportunities to refine theory and better design future experimental and nonexperimental studies. Naturally, as with any study, the opportunities that this study creates are not without bounds. To help in thinking about these bounded opportunities, this discussion raises four topics that I have entitled “retro‐spective biases”, “stylization perceptions”, “manager styles”, and “real‐time review complexities”. After discussing these topics in turn, I end with a short summary.     

UNION EFFECT ON THE USE OF NON‐REGULAR LABOR IN THE REPUBLIC OF KOREA

Our paper aims at analyzing the union effect on the externalization of employment relations, focusing on how labor unions affect management's strategic use of non‐regular labor within the Korean context of industrial relations. Our study presents several interesting implications. Firstly, the unions' motivator role for managerial use of non‐regular labor is more evident than its constrainer role. Secondly, union power exerts a “U‐type” impact on the use of indirect non‐regular labor, while affecting directly employed non‐regular labor in a positive linear way. Thirdly, labor unions in large establishments are more active and influential in representing their members' interests than their counterparts in small establishments with limited financial resources. In particular, the interactive function of the union's power and union leaders' attitudinal inclinations is found to be significant in the negative direction among large establishments.     

DEALING WITH EARNINGS BRACKET RESPONSES IN HOUSEHOLD SURVEYS – HOW SHARP ARE MIDPOINT IMPUTATIONS?

Earnings functions form the basis of numerous labour market analyses. Non‐response (particularly among higher earners) may, however, lead to the exclusion of a significant proportion of South Africa's earnings base. Earnings brackets built into surveys intend to maintain response rates. Econometric tools to incorporate brackets vary from “simplistic” imputation to interval regressions. Coefficient differences are investigated here to establish reliable remedies. Monte‐Carlo simulations suggest that “simple” methods fail only under extreme skewness and when a substantial number of right‐censored observations appear in the sample. Testing procedures applied to LFS data reveal that in practice coefficients are virtually invariant to the proposed methods.     

Gender and Competition between Economic or Non‐economic Labor and Schooling: Evidence from EPAM Mali

Abstract: We use the Understanding Children's Work (UCW) definition of child labor and data from the Mali Permanent Household Survey to highlight the gender difference in the competition between economic or non‐economic labor and schooling. A quadri‐variate Probit estimation allows to account for the interdependency between school and various kinds of labor: household chores (HHC), market‐oriented (MO) activities and non‐market‐oriented (NMO) activities. Empirical results provide interesting findings, including differential gender socialization according to the gender of the offspring, gender bias in repartition of tasks and time, and competition between labor activities and schooling.     

“Exports‐at‐Risk”: The Effect of Multimarket Contact in International Trade

Despite a well‐established literature examining possible impacts on competition in oligopolistic markets from multimarket contact (MMC) among diversified firms, only recently have trade theorists considered the possible effects of MMC among exporters in limiting the anticipated procompetitive role of imports. This article presents a first effort to test the empirical importance of a measure of this MMC, called “exports‐at‐risk,” on import prices (unit‐values). Suggestive evidence of anticompetitive impacts of MMC among exporters is obtained for highly traded four‐digit harmonized system (HS) products within the broad category of “fats and oils.” Exporters in fats and oils seem to price higher in markets where they meet rivals with the ability to retaliate against their “exports at risk.”