Is Financial Economics the specialization with the highest job market demand?

[Uncompromisable]

Among private and public institutions at least.

[Walras]

No, the field with the highest job market demand is econometrics. Why? Because they the private sector likes those candidates, which also brings down the supply of econ PhDs specializing in econometrics going into academia. If you'd like to see some statistics on the total supply side see page 5 of http://cber.uark.edu/2009-10_new_phd_labor_market_survey_report.pdf. There's a lot of macro people. I'd suspect, by the way, the most popular questions (to the general public) aren't how we got here but how to fix things. Finance profs, econ profs, and history profs all have the same set of facts and are coming to a somewhat common conclusion: America was too leveraged. Workers were incentived to take risks, and the govt. at the behest of some in our own profession rolled back the oversight, and too many consumers weren't able to help stimulate demand because they had their own ill-conceived debt loads. The questions the public cares about, thus, for macroeconomists: where do we go from here?

 

Anyway, I'd also argue that from a departmental hire perspective they generally try to hire economists not based upon who they think can answer the popular question of the day, but based upon which field they want to specialize in (if they're gathering coauthors to support existing faculty) or what they need someone to teach. Every dept. always needs some stats/econometrics class, and it's not very popular to teach. Thus, from a teaching perspective you can do without a financial economics, environmental, labor or even political economy guy, but you usually want at least one econometrics person.

[OneArmedEcon]

An empirical micro field with training in applied microeconometrics probably represents the most versatile skill set. Of course, it's highly saturated, but a range of types of employers hire people with that profile on an ongoing basis.

 

While there is some demand for econometric theory in the private (particularly financial) sector, I'm not sure that I would say that's the subfield with the highest demand. I'm not sure that I understand the point about it being advantageous on the academic market because there's a constant need to teach undergrad metrics... you certainly don't need to be an econometric theorist to teach undergraduate econometrics (in fact, it's probably better if the instructor can present the material with real world applications).

[Walras]

I'm not sure that I understand the point about it being advantageous on the academic market because there's a constant need to teach undergrad metrics... you certainly don't need to be an econometric theorist to teach undergraduate econometrics (in fact, it's probably better if the instructor can present the material with real world applications).

 

I agree it's not needed and some people would be willing to teach anything to place a tiny bit higher. Still, a professor I talked to once told me that this is in fact a criteria for their department because they're trying to attract the best APs, and so one of the perks they try to offer is the opportunity to teach classes related to what you love to research. I gave your argument plus an even better one (specialization for small-medium non-PhD granting institutions makes sense because if you don't have enough people to have multiple professors in each field I'd prefer co-authors to having the freedom to teach classes about my field). The response I got was to try saying that after I've taught classes to undergrads for a few years. So apparently it does matter for full professors utility function.

 

Still, I don't want to overgeneralize. It could be very different elsewhere.

[OneArmedEcon]

one of the perks they try to offer is the opportunity to teach classes related to what you love to research.

 

Teaching courses in something resembling one's field of research is certainly valued by faculty. And for many fields, it definitely matters. Most labor economists would absolutely loathe having to teach a macro course, for example.

 

But, having gotten to know several, I'm not sure that teaching the material that's typically taught in a BA-level econometrics is really something that econometric theorists see as being at all related to their area of research. That is, there's a pretty big difference between teaching a BA-level version of the classical linear model and what econometricians actually do for research, perhaps more so than even macro.

 

There is some demand for econometric theorists, but it isn't because academic institutions (from a super-elite R1 to the lowest tier public university) want to hire them because they are the only ones interested in (or qualified for) teaching undergraduate econometrics.