March 22, 2018

Kathryn Graddy, Fred and Rita Richman Distinguished Professor of Economics and Senior Associate Dean of the Brandeis International Business School (IBS), was awarded an honorary doctorate at the Copenhagen Business School’s 101st Annual Celebration on March 16, 2018.

See the full article on IBS News and Media

The Brandeis Economics Department has achieved top rankings in College Factual.

College Factual, a data-filled website that helps students discover the right college, major and career for them through national rankings, matching technology, and in-depth college profiles, has released their rankings. See the link below:

https://www.collegefactual.com/colleges/brandeis-university/news/top-college-2018-top-ranked-economics/

 

In a paper in Proceedings of the National Academy of Sciences (PNAS), George J. Hall, professor of economics, and his New York University colleague Thomas J. Sargent calculated the US debt limit for every year between 1776 and 1939, and found that Congress used to promptly repay the nation’s loans.

Read The article on Futurity

Read Professor Hall’s paper

The Economics department welcomes our newest faculty member, Jean-Paul L’Huillier. Jean-Paul’s primary area of expertise is Macroeconomics (Information Frictions, Monetary Economics, Business Cycles) and secondary is Experimental Economics.

The complete interview with Professor L’Huillier from BrandeisNOW, can be found here.

Prof. Raphael Schoenle won a prestigious research grant from the Fondation Banque de France, the research foundation of the central bank of France. A maximum of four grants are awarded under this internationally highly competitive research award each year. More information can be found at: https://fondation.banque-france.fr/en/sponsorship/research-grants

Professor Nader Habibi’s article “Why Iran’s protests matter this time” can be found here: https://theconversation.com/why-irans-protests-matter-this-time-89745

Also by Professor Habibi, “Will Protests in Iran Pave the Way for Economic Changes?”

Iran’s embattled government may respond to recent protests with populist measures – but those will not necessarily create more jobs, experts say.

Read the article here:

http://knowledge.wharton.upenn.edu/

Turkey has experienced a rapid rise in university enrolment in the past decade. The total number of students in universities and other institutions of higher education increased by 91% from 3.5 million students in 2008 to 6.7 million in 2013. The uptrend has continued in recent years and as of December 2016, nearly 7.2 million students were enrolled in 118 public and 65 private foundation universities on various academic programmes.

This sharp increase is a direct result of the higher education policies of the Turkish government.

At the same time the unemployment rate among university graduates remains high. The most recent labour statistics show that among adult workers with university degrees (with a two-year degree or higher), the unemployment rate rose from 11.5% in June 2016 to 12.6% in June 2017. Most of this burden has fallen on women, who experienced 15.6% and 18.4% unemployment rates respectively.

Underemployment

In addition to high unemployment rates, university graduates are also at high risk of underemployment.

A university graduate is considered underemployed if his or her current job is a non-university job. Non-university jobs are the type of jobs that, according to the standards of the International Labour Organization, do not require a university degree. When we look at the education level of the Turkish labour force, it is clear there is a growing number of university graduates who fall into this category.

The most popular non-university jobs among Turkish university graduates are clerical, customer service and sales jobs, which enjoy more social status in comparison to manual low-skill jobs in industry and agriculture.

Some 11% of workers in clerical, customer service and sales jobs had a university degree in 2004, but this figure rose to 22% in 2016. When we look at workers in all jobs that do not require university skills, we can see that the number of graduates increased from 3% in 2004 to 9% in 2016.

Even in 2004 as many as 21% of workers with university degrees were employed in non-university jobs. Unfortunately, as a result of the rapid increase in the number of university graduates, this figure has steadily increased in the past 12 years and reached the alarming rate of 33% by 2016.

The implication is that in addition to a high rate of unemployment among university graduates, nearly one third of those who are working have found employment in professions that do not require university skills.

This growing rate of underemployment is alarming and it points to a major disconnect between the labour market job opportunities and the supply of university graduates in Turkey.

Clearly, no university graduate accepts a non-university job voluntarily after spending several years in pursuit of a university degree. They are forced to make this compromise because the supply of university graduates in many fields exceeds the available jobs.

Furthermore, the rapid increase in enrolment has forced some universities to compromise on the quality of training they offer because of a shortage of professors and educational resources. As a result some university graduates have not received adequate training to meet employers’ skills requirements.

As employers fill low skill and semi-skilled jobs with university graduates, the job market becomes less favourable for high school graduates. This creates a false incentive for many high school graduates to apply for university education.

Unfortunately, since social demand for university education is very strong, Turkish politicians are reluctant to call for substantial limits on university enrolment – a necessary step for reducing the oversupply of graduates.

A measured debate

Turkey would benefit from an honest and unbiased debate about the costs and benefits of mass higher education. Like many Asian and Middle Eastern countries there is a strong bias in favour of higher education in Turkey, which forces the government to heavily subsidise public universities. Families also spend large sums on preparation for university entrance exams and tuition for private universities.

But when more than 30% of university graduates cannot find adequate jobs after graduation, Turkey’s higher education system is not effective. Turkey would be better off if fewer students were enrolled in universities and a larger share of government resources was spent on improving the quality of higher education rather than the quantity of university graduates.

In September 2017, the Turkish government announced that it had designated 10 universities as research universities and would provide them with additional resources to achieve excellence in research and graduate education. This is a positive step, but it must be complemented by better regulation of enrolment in university disciplines that suffer from high rates of unemployment and underemployment.

The recent sacking of a large number of university teachers after the failed 15 July 2016 coup attempt is another cause for concern with regard to growing enrolment in universities. Many university departments have lost experienced faculty and have to manage the same number of courses or an even larger number with a smaller number of teaching staff.

What is more, the new faculty members who have been hired to fill the gap are young PhD graduates with limited teaching experience. Under these circumstances, increasing enrolment is likely to lead to a decline in the quality of education students are offered.

Nader Habibi is the Henry J Leir professor of the economics of the Middle East at the Crown Center for Middle East Studies, Brandeis University, United States. His research on the status of higher education in the Middle East is available at: www.overeducation.org.

On Tuesday, March 7th, the economics department held it’s annual “Life After Brandeis” event.  We were pleased to have a great group of alumni attend to answer questions from our students. The panel, pictured from left to right, are: Haotian Shen ’15 MAief’16, Ben Luxenberg ’09, Axel Szmulewiez ’16, Anna Kaufman ’10, and Joey Wang ’15.  Thank you to all for a successful and very informative evening!

Prof. Raphael Schoenle’s work “Inflation Dynamics During the Crisis” with Simon Gilchrist, Jae Sim and Egon Zakrajsek was published in the 2017 March issue of the American Economic Review, the flagship journal of the American Economics Association.

From the latest issue of the Atlantic

A well-known study by the economists Eli Berman and Linda T.M. Bui of Boston University looked at the aftermath of new regulations governing air quality in Los Angeles. The South Coast Air Quality Management District in Los Angeles enacted some of the country’s most stringent air quality standards in the 1980s, and Berman and Bui compared Los Angeles firms with those in Louisiana and Texas to see if the more regulated firms cut jobs as a result. They found that the local air quality regulations were not responsible for a large decline in employment, and that the regulations might have actually increased labor demand since firms need to hire people to help them deal with the new regulations. They argued that because all firms in a region were affected by the same regulations, they were still able to compete against one another while facing the same costs. “We find no evidence that local air quality regulation substantially reduced employment,” they concluded.

Linda T.M. Bui is at Brandeis!


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