Graduate School

1. Should I go to Grad School? And if so – which one?Anindya Sen*Department of EconomicsUniversity of WaterlooSeptember 24th 2012* The opinions expressed here are mine and do not represent any official position of the Department of Economics or the University of Waterloo.

2. Graduate School • Should I go to Graduate School? • If you have the marks - an MA in Economics makes a lot of sense. • Significantly higher earnings ($45,000-$80,000) relative to an undergraduate honors degree in economics • Greater responsibility and more interesting work. • Relatively low opportunity costs. Most MA programs consist of 8 months of coursework and funding is available. • There are, of course, costs. You need to be certain that you want to pursue economics as a profession. Switching careers - with an undergraduate degree – is definitely easier.

3. Graduate School • In terms of specific opportunities – there are many different applications of economics in the public and private sectors as policy advisors, research economists, or consultants. • Some examples of former students - Rob Nicholson is the Executive Assistant and Special Policy Advisor to the Assistant Deputy Minister and Chief Economist of the Office of Economic Policy at the Ontario Ministry of Finance. He provides advice and analysis on issues impacting Ontario’s economy. • May Luong is a research economist at Statistics Canada and has written numerous papers on teenage pregnancy, the financial consequences of poverty and student loans.

4. Graduate School • Sarah Fong, is Senior Market Analyst at the Canada Mortgage and Housing Corporation and is responsible for analyzing and forecasting economic and housing market conditions in Southwestern Ontario. • The point is that professional possibilities are rich and diverse. You could work at a crown corporation like Ontario Hydro or the Independent Electricity Supply Operator and be responsible for designing tariffs aimed at more efficient electricity consumption. • You might work at the Provincial or Federal Ministries of Finance and provide advice on optimal income tax structure, income transfers, or commodity taxation such as the recent HST. Employment at Industry Canada or International Affairs could lead to roles in policy issues concerning trade liberalization and industry subsidies/tax credits (R & D)

5. Graduate School • You could work for financial institutions and insurance companies and offer forecasts of the economy, interest rates, and market outlooks • Employment at firms such as Charles River Associates or NERA raises the possibility of work relating to anti-competitive practices and constructing models aimed at establishing lost sales or profits.

6. Hotness, pay, and productivity II. The MA as a step towards further education • Having an MA distinguishes you from other law school applicants and makes you appear focused. • If you want to do an MBA – then do not do an MA. • But the skills with even an MA are different from an MBA- particularly data analysis and interpretation skills. You could be in big demand with an MA. • There is of course the PhD. If you are passionate about economics and doing research – then this is an option. However, unlike the MA – there are significant short run opportunity costs in terms of lost income. • Of course, they may not be significant if this is what you want. There are opportunities in the private and public sector. Bear in mind that getting an academic job is not impossible – but relatively very difficult.

7. Graduate School III. Typical structure of an MA program • 8 month coursework. Core courses in micro, macro, and econometrics. At Waterloo taking a Research Methodology and an applied micro or macro econometrics course are pre-requisites. So students then have 3 Electives. • You could also do 7 courses and a Major Research Paper. • Examples of electives are Industrial Organization, Public Economics, Labour Economics, Financial Economics, Real Options and Investment under Uncertainty, Environmental and Natural Resource Economics, Topics in Numerical Methods. • The 8 month option is ‘Regular’. With the Co-op option, courses can be completed in 2 terms (8 months) . Co-op placement is an additional 8 months. This is unique to Waterloo and reflects the applied nature of our program.

8. Graduate School • Most U.S. universities do not offer a separate Master’s degree in economics. Undergraduates are admitted directly to doctoral programs. Those who fail out or decide not to continue are awarded an MA. • On the other hand, a Master’s is a stand alone respected degree in Canada and Europe. • I would NOT recommend applying directly to a PhD program in the U.S. First do a Master’s at a reputable Canadian school. This will allow you to determine whether you want to commit to a PhD. Second, U.S. schools are aware of challenging Canadian programs and often offer good funding to Canadian applicants as good performance at the Masters is a signal of potential success at the doctoral level. • But students with a very strong math background may consider this route.

9. Graduate School IV. Admission Requirements • Honours bachelor’s degree in economics. Sometimes we admit students with limited economics but with an extensive mathematics background. • Strong preparation in economics and in the mathematical tools are needed to be successful in the program, including the following university-level courses: • two semesters of intermediate and/or advanced microeconomics, two semesters of intermediate and/or advanced macroeconomics • at least one semester of mathematical economics or equivalent. (Note that two semesters of mathematical economics are highly recommended or equivalently two semesters of calculus and one of linear algebra.), at least two semesters of statistics and/or econometrics • Two/three academic letters of reference • Some departments – like Western – admit students with very strong math and limited economics

10. Graduate School • At Waterloo, as in most universities – we focus on performance in the last two years and we look at grades in ECON 211, ECON 311, ECON 301, ECON 401, ECON 302, ECON 402, ECON 321, and ECON 421. Most successful applicants to our program have an 80% average in these courses. • It is possible to get admission without ECON 421 and ECON 311- but you will be given lower priority. And students without these courses often find an MA to be initially very challenging. • You usually need an 85-90% average in the above courses and very strong letters to get into the top Canadian schools – Toronto, UBC, Queens, and Western (Western follows the U.S. model and all students are admitted directly into the PhD). Our undergrads have been admitted to these schools- but the successful ones have usually taken more math courses- even the economics students. Some (not all) have a computer science/engineering background. • Last year was an outstanding year for our students. We placed 9 students in the MA/PhD programs at Toronto, 2 at Western, and 1 at Queens. These are the ones I’m aware of.

11. Graduate School • In terms of more math courses I would recommend MATH 126, 128, Cal 3- MATH 237, Basic differential equations - AMATH 250, probability STAT 334, and Applied Real Analysis AMATH 331. • However, be VERY CAREFUL. MATH 207 may be better than MATH 237. And you do not NECESSARILY have to take these courses. It’s a gamble. Real analysis is difficult even for math majors. • I am more likely to admit a student with a 78% average who has taken all the difficult courses including ECON 311 and ECON 421, rather than someone with a 82% average who has not taken these courses. Other departments think similarly. They go over your transcripts and look at your courses VERY CAREFULLY. We have enough experience to detect a trend towards ‘bird’ courses.

12. Graduate School • Now just because a school has stricter admission standards – does not mean that you just aspire to that department and ignore all others. Each department has strengths in specific fields. • The top schools (UBC, Toronto, Queens, Western) are pretty theory oriented – which may not be a good fit if you’re interested in policy and applied theory. In other words go to the top schools if you think there’s a slight chance that you may want to do a PhD. • McMaster and Waterloo are more applied. McMaster is very strong in health and public economics. In addition to its regular MA, McMaster also has a Master’s in Economic Policy, which is a terminal degree (you can’t do a PhD at Mac afterwards) and is meant for people who are sure they want to go into policy. Our strength is applied economics and the outstanding co-op program. No other program really has that. • Guelph, Calgary, and Alberta have strengths in natural resources. Calgary is unique in its offerings of behavioral and experimental economics.

13. Graduate School • Brock and Laurier offer a master’s of business economics. So if you’re interested in a hybrid MA/MBA – that might be a good fit. • Carleton and Ottawa have the advantage of being in Ottawa and easy to apply to federal job postings. They are also established programs with good course offerings. • Dalhousie and McGill are strong in development economics.

14. Graduate School V. References and how many schools should I apply to • A good reference can make or break an application. Choose your reference with great care. Be honest with your professor and ask if she could write you a strong letter. When you make a request make sure that you attach an unofficial copy of your transcript and a cv. • Carefully listen to the professor’s advice. They may be willing to write strong letters for specific institutes and weaker ones for others. This is common. • Letters from professors who publish frequently are respected, because they are well known and thus, credible. Lecturers are usually not well known. • Be very polite in asking for a reference and make sure that you are well organized. You should be very clear in what the deadlines are and what the professor has to do. Most applications these days are on-line. However, some (like Mac) are still through paper and envelope. Make sure that you offer to provide stamped and pre-addressed envelopes. A small courtesy like this goes a long way.

15. Graduate School • Most applications are due in January and February. So you should be trying to finalize references now. Most of my successful applicants contact me and send me requests by September. • Almost all professors write a significant number of letters in January and February. Each year I am usually approached by 10-12 students who ask me to write 6-8 letters. • This does take a considerable amount of time. So always ask how many letters a professor can write for you. I think applying to 8 schools for an MA is reasonable. Three top tier, three middle, and two lower ranked. You just never know what happens and who you are competing against, and funding cuts a university may be going through. Sometimes, admissions seem quite random. • In terms of your application – offering evidence of research ability may be useful. We are one of the very few schools where (honours) undergrads have to write a paper (472). If the paper is interesting and well written (no grammar mistakes!) you should consider including it in your application. However, always ask your main reference’s opinion first and see if she thinks it is a good idea.

16. Graduate School VI. Other Programs • You may be interested in economics and public policy, with a slightly less technical orientation than a pure Master’s . These days, there are many options for students interested in policy related degrees. • Queens, Calgary, Ottawa, and Carleton and the University of Regina all have policy programs with Carleton’s being particularly well known. Calgary is a full cost recovery (much higher tuition) program. • Queens, Concordia, UBC , U of T have a Master’s in Finance. This is different from the Master’s of Financial Economics offered by U of T and Master’s of Financial Engineering • We have our recent Masters in Public Service which is also cost-recovery. • Toronto has a Master’s in governance and policy which is also cost recovery.

17. Graduate School VII. Finally a bit about our own program • We have a very well balanced and challenging program. And the selling point is Co-op and the Waterloo brand name. • Examples of co-op placements in the last 2 years . . . Human Resources & Development Learning Branch, Forecasting Group, Industry Canada, Telecommunications Policy Branch, Strategic Policy Sector, Scotia Capital, Ontario Health Quality Council, Department of Fisheries & Oceans Canada, Policy Sector, Economic Analysis & Statistics Group, Infrastructure Canada, Program Operations Branch, Ontario Ministry of Government Service, Business Improvement Analyst, Sears Financial, Ontario Teacher’s Pension Plan, Asset Pricing TD Securities 60% co-op placement rate overall, 100% for domestic students Salary of $24,000 over 8 months

18. Graduate School • In 2011-2012, the average financial support package is $8,000 per year for MA students and $22,000 per year for PhD students. • Tuition Fees • $5,200 for 2 terms – Canadians and Permanent Residents • $12,200 for 2 terms – International Students • February 1 application deadline date • Admission is only for September of each year • Complete your application on-line at:http://economics.uwaterloo.ca/grad/grad-apply.html