AMAZING newsletter here today: Cat bonds, SpaceX IPO valuation, aaaaand: university degrees as signals for hard workers!
I was a classics major in college, focused on reading Greek and Latin poetry. Somewhat later, I became an investment banker. That was a thing that people used to do. You treated college as a sort of luxury consumption good, you read some poetry, you had some fun, you lazed about on the quad, you graduated, you were like “ugh job I guess,” and you got a job.
"Most kinds of jobs, though, were open to bright hard-working young people with good general educations and a willingness to learn on the job.""Most kinds of jobs, though, were open to bright hard-working young people with good general educations and a willingness to learn on the job."
In fact, people who treated college as a luxury consumption good were in certain ways more appealing to investment banks. ... This all shaped my view that finance is an essentially humanistic profession, that the study of the financial markets is the study of human behavior, that the essential quality of a derivative structure or tax strategy is its aesthetic beauty, that finance is a proper subject for art criticism.
Oh well?
If the only people who work in finance are people who have pursued that goal single-mindedly since they were 16, the pool will be less diverse, and maybe less fun.
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Less wise, too, would be my guess.
The economic forces which are driving the rat race earlier into peoples' lives would be an interesting one to explore. I'm not sure I fully understand it deeply.
At the surface level, it feels like a prisoner's dilemma. (I gotta get my kids these high powered internships early because otherwise they'll fall behind.) But that still doesn't explain, what changed? between now and 30 years ago?
The labor market is broken and no one really understands why or how to fix it.
Sometimes economists deploy different matching experiments on JOE to see if we can make some headway on our own broken labor market, but it's worse than ever.
I'm expecting us to circle back to nepotism as the default.
I honestly wonder if technology has made the matching function too thick.
For example, in a standard job market matching model, a thicker matching function is always better because you can select from a greater pool of applicants.
But the model doesn't account for the cost of evaluating applicants. If you have too many applicants, your standard methods for sorting through them may start breaking down.
Maybe things are moving earlier because on the job-seeker side, it's what they feel like they have to do to stand out from the crowd.
On the employer side, if they can get a good enough pool of interns early, it reduces the need for them to do costly sorting of a greater universe of applicants (even if some in that greater pool would be better)
That's my sense, on both counts.
They've tried things like giving econ applicants a limited number of signals that can be sent to employers to indicate especially strong interest and letting both sides ordinally rank their top 10 preferred match partners.
Introducing prices somewhere in there could help with the volume problem, maybe even some sort of auction mechanism.
There's also filtering value, for both sides, in getting the interns in-house earlier.
That doesn’t happen in pragmatic Singapore though. Liberal arts majors will have zero chances of securing jobs in the finance industry
That's, I guess, reassuring in some sense