Economists Are Getting Sexier
What is happening to the traditional field of Economics?
Economics is the practical and theoretical science of the production and distribution of wealth. The trading floor is traditionally flooded with economics graduates. The field of economics, for decades, has been linked with plenty of opportunities and riches. About 15 years ago, before my sister graduated with an economics degree, a dream job was already waiting for her in a large bank. From there, the financial industry continued to bless her with handsome remuneration and fancy cars.
In recent years, there has been an influx of fresh university graduates flooding the job market, increasing competition and making it more difficult for people to land a job they desire. This has impacted employment opportunities across disciplines; however, for the economics graduate, there is a rise in opportunities in a different sector.
Economics + Technology = The Next Sexy
In the boom of technology advancement, we noticed a resurgence in one particular area of economics study – Microeconomics. Briefly, this is the study of the dynamics between individuals and industries which also incorporates a number of other subjects, such as sociology and law, to form a collective understanding of the economic systems that exist today.
Professor of Economics at Stanford University Susan Athey, in recent times, spoke about technology companies in Silicon Valley hiring economic teams at a very rapid clip. One of the main roles these teams have is in the area of pricing and product design, which requires an innate understanding of microeconomics. This trend arises from the need to facilitate interactions between users with microeconomic principles such as regulating supply and demand, and incentivisation mechanisms. Some examples of economists playing a key role in product design include the Google AdWords auction system helmed by Google’s chief economist Hal Varian, and cupid.com’s limitation on the number of date requests men can make per month to women, greatly incentivising selective behaviour and creating a better experience for all users.
The Economics behind job matching
At JobTech, we have set out to reduce friction between jobs and talents, through analyses of labour market data. We examine the efficiency of models such as skill-based matching algorithms to resolve issues including jobs mismatch (where jobs and talents are not of the right fit) and miss-match (where jobs and talents cannot find each other due to imperfect information).
We have two key economists managing our core product designed to solve inefficiencies in recruitment and help companies build sustainable talent pipelines, along with relevant skilling recommendations. Their training in data analysis provided a great foundation to pick up further technical skills such as Python, SQL and machine learning techniques to reveal patterns in massive amounts of data (we have collected more than 150 million job data points). With a firm grip on economic principles, they began to shed light on the reason behind these patterns.
One insight that we have gleaned relates to the tragedy of the commons: individual users acting independently according to their own self-interest create detrimental effects to the entire community of users through their collective action. In the traditional online job market it’s almost trivial to submit one more CV for one more role, so employers receive hundreds of unsuitable profiles for every open position, which does not benefit the employer nor the jobseeker. This, along with other findings, has guided our approach in designing our products. If we could ensure that employers receive only CVs that are the best matched for them, and job seekers were informed of their chances before applying for a job, the experience would be a better one for all.
This is indeed a great time for economists.
Ang Wee Tiong
Co-Founder Of JobTech
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