Bryan Caplan  

My Back-Up Plan

How Sticky Are Nominal Wages?... David Sedaris on TSA...
Today at lunch we were discussing the predictability of career outcomes.  How often do small chance events make or break a person's success?  Eventually someone brought the case down to earth: What would have happened to me, Bryan Caplan, if I didn't get my job at GMU econ back in 1997?

I actually had a detailed contingency plan.  In my 4th year of grad school, I only applied to academic jobs.  If I got something good, I'd take it.  Otherwise I'd hang around Princeton for a 5th year, and try again.  The second time around, I intended to apply to a wider range of positions, including business jobs. 

Part of my contingency plan was never applying for non-academic government jobs.  I turned down interviews with the Fed and other agencies without telling my committee.  Why did I draw such a stark distinction?  Simple.  In an academic government job, unlike almost any other government job, I knew I'd never have to act against my conscience.  Like Thoreau, I believe that "The only obligation which I have a right to assume is to do at any time what I think right."

I was fortunate.  I had nine academic interviews in 1997, and received exactly one job offer... for my dream job.  If GMU hadn't been hiring that year, I would have tried again in 1998.  In the latter scenario, there's roughly a 50% chance that I would have ended up in a high-stress, intellectually unfulfilling job like economic consulting.

If that happened, I would have made far more money than I did.  But with a 60-75 hour work week, it would have been nearly impossible to publish.  So I probably would have been frozen out of the academic game forever.  Since I never liked high-stress conventional work, and have strong self-control, I would have saved most of my earnings to retire early.  The upshot: If GMU hadn't hired me back in 1997, I'd probably be retiring right around now. 

What would I have done with the rest of my life?  I would have tried to get a think tank job.  If that failed, I would have searched for a decent adjunct professorship somewhere.  Maybe in the end I could have wormed my way into a tenure-track job, but I doubt it. 

Luck largely does wash out in purely financial terms.  That's yet another lesson of twin research.  If you have conventional tastes, luck might wash out for broader measures of career success, too.  But if my experience has taught me anything, it's that a weirdo like me who wants a fulfilling career needs to be at the right place at the right time.

P.S. In my case, "luck" is also known as "meeting Tyler Cowen the summer before I started graduate school."

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COMMENTS (15 to date)
Elvin writes:


I went the other way and decided against a career in academia and became a consultant instead. Now I'm an in-house economist at a major firm. I found that you can be intellectually honest and earn a really good living as an economist. There's been nothing but respect and appreciation for the overall problem-solving and analytical skills that my Econ PhD has given me.

Consequently, I don't regret one bit having passed up academia (I would have been a good teacher, but a mediocre publisher). I can't believe I get paid so well to work on such interesting and important problems. I love the real-world aspect of what I do. I look forward to going to work, so the long hours aren't a big deal.

My "luck" was not getting an academic job when I first looked into it. I'm glad your luck has worked out well for you, too.

Andrew writes:

"In an academic government job, unlike almost any other government job, I knew I'd never have to act against my conscience."

But you knew you'd never have to act against your conscience in a consulting job?

liberty writes:

Interesting. Luck, personal relationships, ideology, and "personal fulfillment" play a very large role in your career 'choice' (or path). Yet how large a role do these play in economic models? Models generally depict workers choosing where to work based upon the wage level (not upon what is "fulfilling work"), and offered to them based on productivity (not luck or connections)?

RPLong writes:

Caplan, I think if you had ended up in economic consulting, I'd still be reading your blog right now, and you'd be writing about how fulfulling your career was, and how you're glad you missed out on academia.

I think personal attitude and personal integrity play a much larger role in career satisfaction than the particular path itself. I am engaged in work I never thought I'd ever be doing (I always thought I'd be an academic - so did my professors). But I find it endlessly satisfying because every day I am able to find something about my work that appeals to me.

I think I feel this way because that's the kind of person I am. I find enjoyment in whatever it is I do. There are some cantankerous folks who are insufferable pessimists, who always feel that they missed out on their "big chance" in life. But did they? Or did opportunity knock and they never knew it because they were too frustrated by the fact that they didn't end up where they expected to be?

Just my two cents.

Javier writes:

I agree with RPLong. On average, people who get PhDs and then leave academia are about as happy with their jobs as people who become tenured professors.

Here is one example:

Thomas Boyle writes:


I went the consulting / high-stress, high-ish-paid job route. Saved like crazy, because I don't enjoy high stress and long hours.

You should take comfort in knowing that your estimate of time-to-retirement was far too optimistic. My savings have appreciated little in value, thanks to the market's lost decade (and counting).

So here you would be, older and tired of the high-stress, long-hours job, with much less fun to look back on - and retirement still decades away.

Feel even better now?

Finch writes:

Are the problems in economic consulting really seen as unfulfilling to academic economists? That's the opposite of what I experienced in technology.

It's better to work on problems that really matter - where people are desperate for your help - and where you've got the budget to do what you need to do to get the work done.

dave smith writes:

Luck is endogenous.

tjames writes:

In my own case, luck certainly played a part in my career. After a bit of drifting through college, I ended up on an MS track in Electrical Engineering, with the goal of working in the semiconductor industry. One day, my advisor recommended me - pre-graduation - for a job at a small semiconductor startup she was involved with. I decided to leave school (goal was to finish MS on the side, but startups do not often leave time fot that) and join the company.

2 years later, the start-up became a die-off, as start-ups often do. I could have gone back to school, or looked for another job. But right at that critical moment, we had customers whose work wasn't finished, contracts which weren't completely drawn down, tools to do the work, and I had the know how. I took a leap of faith and went out on my own, scooped up the customers and remaining contract dollars, and set off on my own as a semiconductor design consultant.

I am extemely satisfied with my career path. I started on my own in late 1999 and am still going strong. I have been priveledged to work with people around the world and work on a wide variety of projcts. Did finsih the MS in '02.

I often reflect back on the confluence of events that occurred for me to be able to start such career at that particular moment, with only a BSEE, and I am in wonder. Right place, right time, decision to make a leap of faith - it all came together.

Kyle writes:

Yes, thank goodness you got a government job and didn't have to be subject to the intellectually empty horrors of work in the private sector. The unfulfilling wasteland that the free market creates is every bit as dismal as your fellow lifetime government workers have told you; there are no interesting problems to solve, no room for creative personal growth, and certainly no time to think interesting thoughts and post them onto an internet blog.

But future generations are in luck. With the rapid expansion of government, explosive university (and other government) costs and ideological assaults on libertarian ideals, I dare say the future looks more and more like you and less and less like us. I worry that there are fewer permanent university positions where intellectual giants can go sit around and think great thoughts free from the vagaries of the public whim, but surely we can push that pendulum the other way if we try.

Arthur B. writes:

The flipside is that you won't really know if you're pulling your own weight. There is something very gratifying to the realization that someone is voluntarily parting with their money for your work. How do you know if your teaching measures up to your salary?

I'm not claiming it doesn't! I am a big fan of yours and I think it probably does. But there is undeniable value in having the market's seal of approval on your activity. It's hopefully something you've gotten through your books.

Making money in the private sector is a signal of ability that can't be faked. I find it comforting.

Steve Sailer writes:

"Luck largely does wash out in purely financial terms. That's yet another lesson of twin research."

Not at the very high end. Luck plays a huge role in, say, making the Forbes 400.

Invisible Backhand writes:

Bryan is very fortunate that he really and truly wants to be a cats paw for the oligarchs.

He reminds me of Reese Witherspoon in Election (1999). She was a hot teenage girl who really and truly liked to have sex with old men. (This leads to teacher Mathew Broderick's friend and fellow teacher being fired and eventually Mathew himself.)

The very last scene in the movie has Mathew years later across the country working as a tour guide in the Smithsonian. He's walking by the Capitol and he sees...Reese Witherspoon getting out of a stretch limo. And its like, of course this is the prosperous future that awaited her. It was inevitable.

I'm sure Bryan is just as oblivious to his inevitable prosperity as Reese was in the movie.

ajb writes:

If luck does wash out (at least financially) how does Caplan reconcile the findings of Lisa Kahn of Yale that getting a first job in a recession has income and career effects lasting two decades?

Presumably other shocks could have similar effects.

Daniel Goodman writes:
Making money in the private sector is a signal of ability that can't be faked.
-- comment by Arthur B.

I would like to qualify this statement. Making money in the private sector is a signal of being able to make money in the private sector. It is not a signal of intellectual ability, analytical rigor, or moral justification. In its simplest form, it is a signal that someone valued the service more than they paid for it and the other party valued their remuneration more than their labor time. This, unto itself, is an honorable thing and one of the best signals we have for identifying individuals who can learn a specific set of skills and apply them. However, labor market valuation is subjective and often determined by those with limited information. It is a well established fact that lobbyists are able to make money in the private sector. Does this by itself pass the litmus test of a noble enterprise that deserves our admiration? Perhaps if the lobbyists are advocating the policies you believe in, but what if they're not?

The market valuation of labor is hands down a much better indicator of efficacy than the public sector. However, this shouldn't be taken as justification for the objectivist deification of these services.

I would argue that entry to the public sector for many positions is so competitive and rigorous and the compensation and lifestyle is so nice that they are often able to bid away talented and able workers from the private sector. The fact that half of all economists in the US work for the government should speak to this.

Prof. Caplan, I'm rather grateful you were saved the intellectual void of economic consulting.

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