Marvellous, Quite Marvellous

Ben Goldacre sharpens his pencil once again. That Reform report on how we should have more mathematicians.….

….but let\’s round up like the angry maths profs did and say that about 20% of maths graduates enter financial services. Not 40%. I call this "arithmetic".

Not good so far. But then the report makes two economic howlers.

And even more so when the dubious reasoning begins, like with their idea that if there were simply more people around with maths knowledge there would therefore automatically be more (and more lucrative) jobs around requiring that knowledge, into which the new maths graduates would lucratively and instantly fall. I\’m not entirely sure it works like that – I am of course not an economist –

Nor am I an economist but there is a saying around that supply creates its own demand. However, even when people claim it to be true they don\’t mean that supply of a specific good or service creates demand for that specific good or service. Otherwise the Ford Edsel would have sold rather better than it did. So no, having more mathematicians would not create more jobs for mathematicians.

Secondly:

They reason thus: "Each of these students would have earned an additional £3,080 a year due to the market premium on A-level mathematics, equating to £136,000 over their lifetime. The total gain to the economy over the period would have been over £9bn."

Now we\’ll put aside the fact that the BBC said "a maths A-level puts on average an extra £10,000 a year on a salary [not £3,080], says Reform" because I can\’t get £9bn for that period with those numbers (I get £12bn assuming a linear decline, although they may have access to more detailed data), and in any case Reform makes assumptions which are not, at face value, tenable, including the notion that the extra earn would have survived a widening group of people with maths A level.

Quite, if we increase the supply of people with a certain qualification then we\’re going to decrease the earnings premium that said qualification earns (well, unless something truly weird goes on like we need a critical mass of a certain skill before people start to employ it). As indeed has happened with male art degrees….not so long ago (well, OK, eons ago, when I were a lad) an arts degree produced an earnings premium over those without such a degree. Nowadays, with the huge expansion of tertiary education, there is no (on average of course) premium at all for a male holder of an arts degree.

So that £9 billion they claim rather diappears in a puff of economic logic.

Pity, Reform\’s usually rather better than this.

1 thought on “Marvellous, Quite Marvellous”

  1. It’s a good empirical approximation that everything that any scientist ever says about economics is utter crap. Perhaps we can add mathematicians to the charge sheet.

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