Why economists are flocking to Silicon Valley – The Economist

by | Sep 7, 2022 | Financial

For more than a decade Facebook, now known as Meta, has awarded fellowships to promising graduate students working on cutting-edge research. The prize, which this year comes with up to two years’ worth of university tuition and a $42,000 stipend, has gone to computer scientists, engineers, physicists and statisticians. Now it has gone to an economist. “I was not expecting it,” says Jaume Vives i Bastida, the lucky recipient working on a phd at the Massachusetts Institute of Technology (mit). Silicon Valley is increasingly turning to economics for insights into how to solve business problems—from pricing and product development to strategy. Job-placement data from ten leading graduate programmes in economics shows that tech firms hired one in seven newly minted phds in 2022, up from less than one in 20 in 2018 (see chart). Amazon is the keenest recruiter. The e-commerce giant now has some 400 full-time economists on staff, several times as many as a typical research university. Uber is another big employer—last year the ride-hailing firm hired a fifth of Harvard University’s graduating class.For the dismal scientists pay is a factor, says John List, a professor at the University of Chicago who has worked at Uber and Lyft. But tech companies also offer many of the benefits of a university career without the “publish or perish” culture. In the past, heading to the private sector often meant forgoing research completely. Now, explains Mr Vives, “Research can still be a big component of y …

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