What should you major in?

While it’s important to study what you love, it is also useful to consider your future opportunities when choosing a major. Salaries and unemployment rates vary widely among majors. And when we add the possibility of going to grad school into the equation, things get even more complicated.

In this post I will discuss data from a paper by Akbari and Aydede that examined the earnings potential and unemployment for a plethora of college majors using micro data from Canada.

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3%: the magical inflation target

Developed countries have been keeping their inflation low, between 0 and 3%, for some time now. Developing countries have been trying to do the same with varying success. But what is so special about this range? In particular, why is it detrimental if inflation goes above 3%, or below 0%?

This question is indeed a pressing one as cross-country regressions of GDP on inflation fail to find any significant effect of inflation on GDP.

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The effect of home ownership on unemployment

In an interesting working paper Blanchflower and Oswald (2013) take a look at how home ownership rates may be connected to unemployment. We are pretty much used to thinking of home ownership as a “good” and desirable thing. It is quite often encouraged by governments through subsidies and the like. However, this may have adverse effects.

If you think about it it’s quite intuitive: higher home ownership rates will reduce labor mobility because if you own a house somewhere you will be more reluctant to move. Lower labor mobility will make the labor market less efficient because labor supply will not necessarily follow labor demand in a geographic sense. The result is higher unemployment altogether.

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