Silver Lining In The Financial Crisis

Remember my earlier story: Silver Lining In The Financial Crisis?

Well, here is an interesting story in the NYT this week: Wall St. Pay Is Cyclical.

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There may well be a slippage in the appeal of Wall Street careers as the pay differential with other professions declines. Over the years, for example, there was a big increase in the percentage of graduates of Harvard who went into finance. Two Harvard economists, Lawrence F. Katz and Claudia Goldin, studied the career choices of undergraduates since the 1960s, finding that the share entering banking and finance rose from less than 4 percent to 23 percent or so in recent years.

Surveying graduates from the 1960s through the 1990s, they found that Harvard graduates who chose careers in finance made three times the pay of their peers, adjusting for grade-point averages and test scores.

“We see a huge shift into finance over the years, and Harvard students clearly respond to economic incentives,” Mr. Katz said. “I certainly don’t think it was a pure love of finance that drove people into the field.”

In recent years, according to Harvard surveys, about 40 percent of students pursued the most lucrative business fields like finance and consulting. If the money were not a consideration, many said they would pursue other paths. In her commencement speech to seniors last year, Harvard’s president, Drew G. Faust, urged students to pursue a career path that stirred them.

“If you don’t try to do what you love — whether it is painting or biology or finance — if you don’t pursue what you think will be most meaningful, you will regret it,” Ms. Faust said.

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Here’s to talented young people returning to careers in Science, Technology, and Entrepreneurship!