Friday, April 20, 2012

Do we need more engineers?

That's the title of this post and accompanying public radio story. The author interviewed my co-author, Hal Salzman. I provided him with a lot of background information from our work for the stor as well. He was going to get me into a studio for a taped interview, but with some crazy personal stuff this week I never got the chance.

You don't always get sociologists that think like this:

"The conventional wisdom is that more engineers will lead to more innovation and help create the so-called jobs of tomorrow. But when Hal Salzman heard that from the President, he had a very different reaction: disbelief...

Salzman says hoping more engineers would help the economy is kind of like saying building more cars would help the auto industry. Instead, he says, the market does a pretty good job in this field. For instance, an oil boom in recent years has increased demand for petroleum engineers.

“The response is just what you’d expect out of Econ 101, which is: salaries went up and almost immediately the number of graduates increased,” Salzman said.

Salzman doesn’t disagree that engineering can be a good job, and he says graduates landing lots of jobs is exactly what we want. In recent years, the unemployment rate among engineers is about half the national average. But adding 10,000 more to the pool, he says, could make it harder to find work, and drive down wages. Already, many of the best and brightest students are attracted to higher-paid Wall Street or consulting careers

I thought the author did a good job representing our position. There's so many people in this discussion that say "there are too many scientists and engineers!" or "we need more scientists and engineers!" that people often try to put this argument of ours on that spectrum, but it's harder.

My view at least - and I think Hal pretty much shares it - is that "how many engineers do we need?" is a question that's contingent on demand for engineers. Without talking about the demand schedule for engineers, some of these statements don't make very much sense. But I would say that:

1. We have decades of empirical evidence that scientists and engineers respond strongly to market signals, although it's often with an adjustment lag

2. While their may be "market failures" (ugh... hate that word) associated credit constraints and things like that that affect the supply side of this market, there's no real market failure I can think of that would affect the flow of students going into science and engineering majors, and

3. There are lots of important externalities that we know about that affect the demand for science and engineering labor.

So, my take follows pretty simply from all that. I understand if this is not quite the innovative and exploration-oriented society that you would like. I agree with that sentiment, in fact. But the evidence seems to suggest that that is because of a problem with the market for the output of scientific and engineering labor (and therefore the demand for that labor), and not the rate at which we are producing scientists and engineers.


  1. A few questions, Daniel.

    1.) When are you going to publish your paper on this engineering issue?

    2.) Did you use any econometric/statistical techniques to test your findings? If so, what techniques did you use?

    1. 1. The book will probably be 2013. There have been data delays on the OES microdata for one of the chapters, and that has been holding it up.

      Publication - when it's more than just a single author piece with no strings attached - can be a very drawn out process!

      2. Mostly descriptives with a quick regression in the supply chapter. There will be a more elaborate two-stage occupational choice model in the petro chapter to get some supply elasticities.

  2. The unemployment rate for engineers should be compared to other college graduates--not to the national average. One source for the unemployment rate for US engineers is the current population survey(also called the household survey). The cps has a nice time series going back to 1963 from the present.


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