Professor Mark J. Perry's Blog for Economics and Finance
Posted 4:12 PM Post Link
We could really use more plumbers.
And auto mechanics.
Undergraduate business management and business administration majors are among the least academically challenging programs in most universities. Engineering and computer science students who fail often switch to a business major and become 4.0 students. Yet, somehow, so-so business major graduates often end up with high paying jobs, especially if they tack on an MBA. Given these facts, it is not surprising that more people are getting MBAs and fewer are getting engineering, computer science, physics, and chemistry degrees. In the latter majors, most of our graduate students come from other countries.
speaking of auto mechanics. a young friend of mine spent two tough years attending, and graduating from UTI, a auto mechanic tech school.he had zero problems finding a job at a BMW shop.after 8 months of slow business, where his hours and pay did not lead to where he wanted, he now has taken a job as a chauffeur and bodyguard in the female "escort" service sector.bottom line for him, it pays 10 times what an auto mechanic does.
we coould use more escort services to hire more failed auto mechanics:)
It has been observed over and over again taht mass psychology always confirms the peak of an activity, like for example stock market rallies.We see now record application for future job seekers in a shrinking sector. Fibonacci retracements apply in this case too. We should expect to see at least 50% to 61.8% decline in the number of new hires in the immediate future.That followed by an equivalent decline in applicants.
Booming Business-School Applications are often a sign of economic weakness. When recent college graduates are having trouble finding jobs they regularly decide to return to school and wait out the hard times. If you look at the history of business school enrollments you will find a strong association with the business cycle.
anon at 10.32 I partly agree but this is not the fundamental reason behind this.It is basically just another bubble fueled by mass psychology of doing the wrong thing at the right time.Everyone of these candidates thinks that they will be lucky to get good paying job although the market if tough. It is similar to when retail investors jump in a bubble market knowing valuations are extreme but they hope they will make money before it collapses.Behind the fundamental reasons there are primary forces that drive this behavior that are difficualt to pinpoint and explain.One of those IMO is the wrong application of competitivness. People get in a mass behavior because they think they will succeed and win over others. It is a herd mentality.But there are other primitive forces as well. Disrespect for reality, tedency to deny reality, attempt to redefine reality and a host of others.
The graph only gives us data since 2000 which seems to support the idea of executives returning to school during slow economic times. Is it really a long enough period to firmly establish this conclusion?There is also the bandwagon effect as sophist describes although usually, executives use an MBA as an additional enhancement to their existing qualifications rather than the only string to their bow.
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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