Advice for students applying to graduate programs
This is one of a collection of advice pages, all of them with the same theme: get skills, especially quant skills, they're fun and they pay well. They include advice for undergrads, advice for MBAs (soon!), thoughts about data science, and this one, for students thinking of applying to graduate programs in economics or finance. We're not suggesting you do this, but if the idea of graduate work crosses your mind, here are some things to consider.
In all cases, remember: free advice is worth what you paid for it. Do your own homework, it's good practice whatever you end up doing.
Q1. What kinds of programs are there?
There are lots of graduate programs out there for students interested in economics and finance. A quick overview is
All graduate programs ask for letters of recommendation. They will have your transcript, so it's generally helpful to ask someone who can say more about you than your performance in their course. Research assistant experience can be helpful here; they typically lead to stronger relationships that you would get in the classroom.
Q2. What are PhD programs like?
PhD programs prepare students to do their own original research. That's their goal. Most students find this a shocking change, because our educational programs teach students what is known and ask them to regurgitate it on exams, not to think for themselves. If thinking for yourself appeals to you, you can get experience as an undergrad in a number of ways. See "How to find research opportunities" in advice for undergrads.
These programs, particularly at the start, are boot camps for quantitative skills. If you have some general interest in big picture economics and finance, and that's it, a PhD program is the wrong place for you. We know that sounds strange, but it's true -- and for good reason, we might add, but that's another story. See you are a moron; the mean person with the bad haircut is pretty much anyone in an economics or finance PhD program.
Q3. How should I prepare for a PhD program?
PhD admissions in economics and finance will typically look for a strong math background, research experience, and a clear understanding that a PhD program trains you to do research. Courses in economics and finance are secondary. Real analysis is not. Lots of people apply (successfully) with majors in mathematics, computer science, physics, and other quantitative fields. Research experience includes working as a research assistant and doing original work on your own.
Don't let this scare you. We have good students here and the rest of the world understands that. We've sent students to good PhD programs in the recent past, and expect to send more in the future. The key is to understand early in your undergraduate career what it will take -- namely, math courses. If you're a senior now and think it's too late, you might consider a masters program. One of the best is the LSE's MSc program, which has a strong international reputation. If you have another program in mind, let us know and we'll see what we can find out about it.
None of this is a secret, but you might want to check other sources. Speak to your professors, ask friends with similar interests, and so on. See also:
Q4. Should I do economics or finance?
If you're interested in economics, the answer is obvious. If you're interested in finance, it's not. We're economists, so you should ask others, too. But our view is that economics gives you broader training than finance, and this breadth is extremely useful even if your ultimate goal is to work in finance. At NYU, our finance department hires as many people with economics PhDs as finance PhDs. If you're interested in finance, the best option is probably to enter a program where economics and finance are closely linked. That's true of most of the top finance programs.
Q5. Other questions
Should I take graduate courses now? Not a bad idea, but it's not necessary. A good math background and research experience are more important. That said, students who begin PhD programs find the first two semesters are easier if they've seen similar material before. A graduate microeconomics course would be a good place to start.
Should I focus on top-ranked programs? Most published rankings are, at best, crude measures of quality. The first thing to check is their placement records: how many of their students got jobs at good academic institutions? There are some well-known programs that place students poorly, and less-known programs that place them well. Some of the best people have gone to what the uninitiated would regard as second-tier programs. You should speak to people who know the area, including faculty and recent graduates who have gone into similar programs.
You might also think about what sub-areas appeal to you. Some programs are better in macroeconomics, others in industrial organization and strategy, etc. It's ok if you don't know, many of us were in that position ourselves, but it's something to keep in mind.
Finally, this is about you. If you know what you're doing, you can get a first-rate education -- and a good job -- at many places. It's less about the place than what you do when you're there. Or as we view it: there are lots of good options out there. Pick one and charge ahead.
(c) NYU Stern School of Business | Address comments to Dave Backus.