What Does Performance in Graduate School Predict?

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Abstract: http://www.aeaweb.org/annual_mtg_papers/2007/0105_0800_0603.pdf

Economists devote considerable effort to graduate student education, but have conducted relatively little research on the determinants of student performance while in graduate school 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 Ph.D. and to obtain higher ranked positions in the job market? In an attempt to answer these questions, we assembled a rich data set on 1,030 economics graduate students who enrolled at Harvard, the Massachusetts Institute of Technology (MIT), Princeton, Stanford or the University of Chicago in the 1990s. These schools were selected because they have the five highest ranked economics Ph.D. programs according to the National Research Council in 1993.
Our results indicate that students’ grades in required core courses are highly correlated across subjects. The Ph.D. admissions committee’s evaluation of a student predicts first-year grades and Ph.D. completion, but not job placement. First-year performance is a strong predictor of Ph.D. completion. Most importantly, we find that first-year Micro and Macro grades are statistically significant predictors of student job placement, even conditional on Ph.D. completion. Conditional on first-year grades, GRE scores, foreign citizenship, sex, and having a prior Masters 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.