There are not too many economists, say economists

Take note – story published 7 years and 9 months ago

Latvia doesn't have too many economists, because if it did, they wouldn't earn such good wages, according to a new study produced by Oļegs Krasnopjorovs and Kārlis Vilerts, two economists from the Latvian central bank (Latvijas Banka, LB).

The brief study titled: "Overproduction of economists and lawyers in Latvia? Let's debunk this myth" says that the principle of supply and demand refutes the common supposition that Latvian universities are churning out a surfeit of social sciences graduates.

"A typical Econ101 course would tell us that prices of goods go down when supply exceeds demand. If Latvia would have overproduced university graduates in fields of social sciences, they would receive low wage premiums compared to graduates of other study areas. This is not what we see in reality," the economists point out.

"Contrary to media highlights about 'overproduction of economists and lawyers', our results show particularly high returns to education in the fields of social sciences, law, business and administration."

In short, economists and lawyers continue to be paid a lot more than teachers, doctors, engineers and the like. 

The question of whether economists actually perform a more important social function than teachers or medics is not tackled in the paper, however the central bank representatives make it perfectly clear that they believe young people should not be dissuaded from following in their footsteps.

"Probably, the best thing government can do is to promote and reward education quality rather than to try and discourage youth from studying in the fields one believes suffer from 'overproduction'," the study concludes.

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