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Posts from the ‘How To’ Category

What are Undergraduate Economics Students Missing in their Education?

120313 Teach the Teachers (3)Earlier this year AIER partnered with the Eastern Economic Association to survey the economics community. We examined the gaps in preparation of undergraduate students for graduate study in economics. This past weekend, I presented the survey results at the Southern Economics Association annual conference.

The results were not surprising, but they identify crucial areas for improvement. The most cited gaps in undergraduate economic education were:

  • the ability to think critically and creatively;
  • attaining a more intuitive understanding of economic concepts; and
  • mathematical abilities, such as understanding the logic behind statistics, econometrics, and economic modeling.

Many respondents also noted that students have inadequate research and writing skills.

Based on these results, we suggest the following intensive courses as precursors to starting a graduate degree in economics:

  • critical thinking, where we encourage students to digest economic articles and identify argumentative and rhetorical flaws in them;
  • math boot camp, where we teach the intuition behind statistics, econometrics and economic modeling, basic math, and econometric skills;
  • topic brainstorming, where we introduce how to read academic articles, as well as how to think about what types of topics are relevant, significant, and timely; and
  • how to write a good research paper, where we cover skills like syntax and structure, as well as research design, the research question, and data collection and analysis.

AIER intends to apply these findings to its Summer Fellowship and internship programs. For both programs, we will evaluate our efforts at the debriefing of the summer. We invite people and programs that work with undergraduate economics students to apply these results.

We would also like you to brainstorm with us: what else are economics students missing? And how can we fill in those gaps in education?

Financial Literacy Lessons Learned

finlitThis Tuesday, I attended the Massachusetts Financial Education Collaborative Summit at the Boston Federal Reserve Bank. The event gathers interested teachers, non-profits, government representatives, and private sector institutions from across the state to discuss financial literacy initiatives. Here are four lessons I learned about financial education in Massachusetts:

1. Most initiatives are in Boston.

AIER was actually the only organization representing the Berkshire region at this event. While this does not necessarily mean there are no initiatives going on in the Berkshire region towards increasing financial literacy, it does definitely call for an increased need in the Western part of the state.

2. Financial literacy is not the same as economic literacy, but both are necessary.

There has been much written on the state of financial education on the U.S. The New York Times has covered surveys that reveal most Americans are not confident in their knowledge of basic financial concepts, such as inflation, interest, and investments. The MFEC event captured much of this problem. Many of the workshops were aimed at helping students learn to make financial decisions. However, in the public sphere there has been less frequent attention paid to economic literacy. Common core standards point out that economic literacy represents the in-depth conceptual understanding behind financial decision making. Thus, perhaps both types of literacy are important in increasing financial education.

3. While Massachusetts is technically failing, organizations are working hard.

In 2013, Champlain College released its annual national report card on state efforts to improve financial literacy. Most states aren’t doing too well. Massachusetts, in fact, received an “F” in high school financial literacy education. It does not require high schools to have personal finance classes, nor does it require that students take economics.

While the state hasn’t made the grade, organizations within the state are certainly working hard to come up with innovative and interesting ways to teach students about economics and finance before college.

Cape Cod Five Cents Savings Bank, for example, has a Credit for Life fair where students fill out a real budget based on what they want their dream careers to be.

Blue Hills Bank has reached more than 80 schools with its free musical on saving and other concepts catered to elementary students.

4. Technology matters.

Almost every workshop had some nod to the importance of technology. These took many different forms: from video games and computer modules being pitched to students to text polling at the event itself and video presentations. Many authors have written about the new generation “i” (iPod; iBook; iLife), wherein new students need engaging, quick, animated, and technology-laden materials to learn best. It was interesting to hear that new financial literacy initiatives are jumping on board.

[Photo: Chris Drumm/ Flickr]

How to Beat the Rise of the Machines

Rise of the machines

This guy won’t know what hit him.

Navigating today’s job market is a lot like being in a post-apocalyptic action movie. You’re constantly face-to-face with slim odds of survival, though in the workforce that means avoiding layoffs or getting your resume plucked from a stack of hundreds of qualified candidates. And just as disaster flicks tend to feature collapsing landmarks and operatic tidal waves, today’s workers may fear the ground will give out beneath them as technology, outsourcing, and the after-effects of the recession put the squeeze on middle-class jobs.

But as any good action hero would tell you, there are some steps you can take to protect yourself. To prevent computers and high-tech robots from elbowing in on your ability to make a living, the best thing you can do is buff up on your problem-solving skills.

“The jobs that are most vulnerable to technology are the ones that can be algorithmized,” says AIER’s Polina Vlasenko. But if you can prove to employers that you have complex problem-solving skills, you’ll be more likely to take on job responsibilities that machines can’t handle (at least, not yet).

To start building up your problem-s0lving muscles, Vlasenko recommends that you take every opportunity to step outside your comfort zone. “People who consistently try to do something they haven’t done before are rare,” she says. So the next time you hit a bump in the road at your job, try to figure out how to fix the issue before asking someone else. Do some research, experiment, and see if you can’t find a solution on your own. Take the initiative to teach yourself about new things related to your work–from Photoshop to car repair–so that you become accustomed to operating in the unknown.

The same logic applies outside of work too. If you’re puzzled about how to download a new app on your iPhone, resist asking a nearby tween for help and give it your best shot. When you hit the Ikea-dresser-assembly stage where you’re ready to punch a hole through some plywood, don’t give up–take a step back and try to approach it from a new angle.

As with any skill, the key to becoming a better problem-solver is practice. So keep throwing yourself into challenging situations, and don’t give up when things get hard. “What employers want,” Vlasenko says, “is someone with the ability and courage to begin something, even if you don’t know if it can be finished.”

For Fresh Grads, Advice That’s Not By the Numbers

Graduate-Plastics

“Just one word: Plastics.”

It’s the time of year when college seniors are slipping on gowns that look straight out of Hogwarts, grabbing vodka-filled water bottles to sneak into graduation ceremonies, and marching onstage to snag their diplomas and begin their lives as full-fledged adults. It’s also a time when many young people start worrying about what comes next.

For those feeling a little at sea, NPR’s Planet Money has an excellent round-up of economists offering new grads advice on first jobs and chasing your dreams.

Though you might expect economists to spout gritty, money-talks realism, most of their advice is very reassuring. Columbia’s Charles Calomiris says, “If you don’t reach your dream job destination until age 35, no problem: you will still have about 35 years working at that job. So look for jobs that build toward a goal, based on an informed understanding that comes from asking older people about their jobs, their skills, and their paths.”

University of Michigan professor Justin Wolfers advises, “‘Approach your career ambitions the same way you approached your romantic ambitions at college. Sure, you’re looking for ‘The One,’ but the only way to find that is by going on a lot of dates. And you should think about your first job as a good first date. Try it out. If you like it, stick around for another year. But if not, ask another employer out. And keep playing the field until you’ve found the job you want to stay with.”

Inspired by all this practical wisdom, I asked a few of AIER’s economists what advice they have for new grads.

Julie Ni Zhu

If you don’t know what you want immediately after you graduate, it’s all right. You can always learn something from anyone, anywhere, and in any situation. Your experiences, whatever they are, will help you figure out what you want from your job. Then go for it! Read more

Build-a-Skill Series: Learn to Code

USE THIS ONE coding

via xkcd

Nearly four years into the economic recovery, far too many Americans still don’t have jobs. Some economists believe that structural unemployment–a mismatch between available jobs and people looking for work–is a big part of the problem. In a 2011 AIER report, economist Zinnia Mukherjee took an in-depth look at the issue. “There are jobs out there,” she wrote, “and there are workers willing to work, but workers do not have the skills to fulfill job requirements.”

To solve the skills gap, job-seekers need to get education and training that will give them the expertise that employers want. That’s all well and good–but exactly what skills are companies looking for, and how can people get them?

That’s where our new Build-a-Skill series comes in. Each week, we’ll highlight one skill with plenty of practical application in today’s tough job market and explain how to learn it for free or on on the cheap. Whether you’re looking for work or just trying to stay competitive in your field, this series will help you up your professional game. For our inaugural post, we’ll look at a skill that’s been called “the new literacy”: computer coding.

Read more

4 Ways Schools Can Teach Kids About the Economy

Young people starting out in life encounter many situations that require a basic grasp of economics and finance, from taking out college loans to getting a first credit card to opening up a Roth IRA. But a recent report from the National Center for Education Statistics suggests that more than half of today’s students leave high school without a solid understanding of how the money and the economy work.

At AIER, we’re determined to change that. Here are just a few of our initiatives aimed at helping young people strengthen their financial and economic literacy:

  • Career days that invite high school students to visit our campus and talk to our researchers about what economists actually do, how their work helps the economy function better, and how to think critically and scientifically about real-world issues like the minimum wage debate.
  • Participating in pre-school programs that help prepare young children to make smart financial decisions in their futures. (One accessible, age-appropriate ways to talk to four-year-olds about money?  The Berenstain Bears’ Dollars and Sense, which Research Fellow Natalia Smirnova read to a pre-school class just last month.)
  • Partnering with Jump$tart, a national coalition of organizations that teaches pre-school through college-age students about financial literacy.
  • Visiting high school economics classes to talk to students about the best ways to obtain economic data and research—and how to apply that information.
  • And starting this fall, we’re launching a year-long internship program for students from local high schools and community colleges. With once-a-week visits to the Institute to meet with our economists and plenty of hands-on research experience, the internships will supplement students’ academic understanding of economics with observations of the everyday functions of the economic think tank.

Clearly, talking to young people about money is one of our passions. With that in mind, I asked a few of AIER’s researchers: How can schools improve economic education? Read more

Saving for Retirement the Smart Way

Retirement

This week’s episode of PBS Frontline is all about the state of retirement in the U.S.  Long story short? Things aren’t looking so hot. People are overwhelmed by investment choices, management and sales fees are eating into portfolio returns, and most people are confused about how much to save–and how to save it–to begin with. No wonder so many Americans are in shaky financial shape for their golden years.

Frontline’s Martin Smith says that many of these issues can be traced back to a single source: an untrustworthy financial services industry.

Eighty five percent of all financial advisers and financial planners are really just brokers or salesman. Their incentive is to sell you a product that makes them a higher commission, not necessarily a product that maximizes your chances of saving more. Only 15 percent of advisers are “fiduciaries” — advisers who by law must operate with your best interests in mind.

In fact, as AIER reported last summer, a recent study by the National Bureau for Economic Research suggests that many financial advisers put their own best interests before those of their clients. But that’s not to say that everyone has to muddle through hard investing decisions on their own, Lord of the Flies-style. Armed with a few strategies, you can track down financial advice that’s reliable and ethically sound–and begin preparing for retirement responsibly.

Here are a few suggestions to help you find on-the-level financial advice.

1. Check credentials. Look for a Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Chartered Financial Consultant (ChFC). These credentials emphasize a strict code of ethics, and certification requires that consultants pass rigorous exams.

Find out whether you are talking to a broker or an adviser. The primary job of brokers is to sell financial products made available by their company. Advisers provide ongoing management of a portfolio. It’s also a good idea to confirm that the adviser has a clean record through the U.S. Securities and Exchange Commission and state securities agencies. Read more

How to Help Low-Skilled Workers Find Jobs

Photo credit Dan A’vard

The U.S. economy is adding jobs–but employment prospects aren’t improving for everyone. As AIER economists Steven Cunningham and Zinnia Mukherjee write in “Labor Market Recovers Unevenly,” much of the current job growth is being driven by fields like health care, accounting, information, and professional and business services–all of which are dominated by high-skilled workers. That leaves low-skilled workers in the lurch. They explain:

Higher rates of unemployment tend to occur in industries dominated by low-skilled workers, whereas lower rates occur in industries dominated by high-skilled workers. The unemployment rate for those 25 years and older who have at least a bachelor’s degree is currently 3.8 percent. Most economists would refer to a rate that low as essentially full employment.

This suggests a potential problem that could limit growth and shorter-term improvements to the unemployment rate. If the industries critical to growth have used up their labor pools, they are going to hit hard constraints to growth. If industries that employ low-skilled workers are not growing, those workers are likely to stay unemployed.

This is almost the definition of a structural unemployment problem. It also helps to explain why U.S. firms are hiring so many high-skill foreigners while Americans go unemployed and overall unemployment rates remain high.

If there’s a skills mismatch between jobs and workers, the question is: What should we do about it? I asked Mukherjee for her recommendations about how to help low-skilled workers find jobs.

In the short term, Mukherjee says there are several things low-skilled workers can do to navigate a lackluster economy: Read more

Networking 101: How to Mingle with Confidence

Carla Oleska knows how to work a room. The CEO of the Women’s Fund of Western Massachusetts, a grant-making organization dedicated to advancing economic and social opportunities for women and girls, spoke at AIER yesterday as part of our Women’s Financial Empowerment lecture series. The theme of the evening: How to network like a pro. After offering the eager crowd some pointers, Oleska had the group put their new knowledge to the test with an on-the-spot professional mixer. As business cards and handshakes flew, it was clear Oleska’s wisdom had worked wonders. “The only problem was getting them to sit back down,” said AIER’s Natalia Smirnova.

If you couldn’t be there, no need to worry about missing out. Here are a few of Oleska’s tips to help you make a smashing impression at your next professional event. (Of course, while these are aimed at women, they’ll work for people of any gender.) Happy networking!

  • When you enter the room, don’t skitter off to a corner and wait for someone to approach you. Instead, stand confidently at the front of the room and scan the crowd. That way, you’ll be able to find people you want to talk to–and other people will notice you, too. Oleska says the master of this move was none other than Henry Kissinger, who would find an elevated perch like a staircase or platform in order to get an eagle’s eye view of the room. No wonder the man rose so high in Washington. Read more

Setting Savings Goals for Retirement

Most of us are aware that we ought to be saving for retirement. What’s not so clear is how much we’re supposed to save.

One of Daily Economy’s readers, keh211264, responded to Wednesday’s post on retirement savings with a question about this issue:

Are there some data that suggest how much savings one should have for a retirement that is in line with one’s accustomed living standards? In other words, if I’m accustomed to living on a gross annual income of $35,000, should I save 10 times that amount to be able to retire at the Social Security benefit age? What would that mean in terms of a yearly savings bogey? Some information like this might help people see a target to shoot at.

I turned to one of my colleagues for some quick pointers on planning responsibly for our golden years.

Great question.   While there is no simple and direct answer to your query, you may be able to get a better sense of where you stand now vs. reaching your retirement bogey by thinking about how you would answer the following questions: Read more