1. What Does a Degree Give You? A Quantitative Analysis of the Skills of Prospective Government Economists Philip Hedges*, Peter Urwin** & Franz Buscha** *Department of Economics & Quantitative Methods **Centre for Employment Research Westminster Business School Developments in Economics Education September 2007 hedgesp@westminster.ac.uk, urwinp@westminster.ac.uk, f.buscha@westminster.ac.uk hedgesp@westminster.ac.ukurwinp@westminster.ac.uk f.buscha@westminster.ac.uk Centre for Employment Research

2. Introduction Investigate the effects of various candidate characteristics on the probability of passing or failing the GES Economic Assessment Centre (EAC). Binomial probit regression model in order to ascertain the marginal effects of each of the characteristics on the likelihood of passing. OLS regressions explore the significant variables determining scores in knowledge, application & communication of economics. Care needs to be taken in interpretation, as we have at present few control variables and do not account for the possibility of endogeneity and/or selection bias. Though we do offer a tenuous conclusion to spark debate. Centre for Employment Research

3. Background Just over 1,000 GES Economists 2007. Candidates to the GES have the opportunity to attend the EACs twice a year. Analysis covers first three rounds of the newly introduced process (two from 2006/07 & one from 2007/08). Little specific literature examining the skills and abilities of graduates applying for Economics posts (whether in the private or public sector). That which does exist tends to take a qualitative approach [Colander, 2004; ODoherty et al., 2007). Contribution of our analysis is that we are able to distinguish the characteristics of those who do and do not meet the skills requirements set by the GES. Centre for Employment Research

4. The Data Dataset of 717 candidates, with a range of characteristics; scores in three skill areas and pass/fail/withdraw status. 255 passes, 319 fails (Overall pass rate 44%). Covariates Degree Classification Subject of Degree [Pure Econ] [Mixed] [PPE] [Other] UG University [Oxbridge] [Russell 18] [Other UK] [New UK] [Overseas] PG Study [MA/MSc Econ] [Other PG] [NoPG] Nationality [British & Commonwealth][EU] Centre for Employment Research

5. Covariates Verbal & Numeracy application test scores converted into quartile dummies. UCAS points converted into quartile dummies Extra Curricular & Work Experience scores Pass/fail status breaks down into three skill areas (assessment scores from 1 to 5) –Knowledge –Application –Communication of Economics Page 6 for Table of descriptives; comment on key indicators. Centre for Employment Research

6. Pass/Fail Frequencies by Degree Class ( Percentage pass/fail rate given in parenthesis) EAC Status PassFail Degree Class 1112 (55)92 (45) 2.1102 (37)176 (63) 2.24 (44)5 (56) N/A37 (45)46 (55) Centre for Employment Research

7. Pass/Fail Frequencies by Degree Subject (Percentage pass/fail rate given in parenthesis) EAC Status PassFail Degree Subject ECON146 (45)182 (55) MIX75 (40)112 (60) PPE17 (74)6 (26) OTHER17 (47)19 (53) Centre for Employment Research

8. Pass/Fail Frequencies by UCAS Points ( Percentage pass/fail rate given in parenthesis) EAC Status PassFail UCAS Points Lowest 25%32 (31)72 (69) 25% to 50%49 (41)72 (59) 50% to 75%39 (46)45 (54) Highest 25%88 (59)62 (41) N/A47 (41)68 (59) Centre for Employment Research

9. Skill Assessment Scores ( Each skill scored from 1 to 5) EAC Status PassFail KNOWLEDGE Mean3.432.18 Median3.252.25 APPLICATION Mean3.412.20 Median3.252.25 COMMUNICATION Mean3.492.52 Median3.502.50 Centre for Employment Research

10. Binomial Probit Results (1) Table VII Page 9 Possessing a 2:1 degree is associated with a significant reduction in the probability of passing. 2:2 or N/A results are insignificant. Negative 2.1 effect driven by criteria for being accepted into the process of EAC, which requires candidates to possess at least a 2:1 OR Masters. Group not recorded as 2:1 are predominantly those with a 1 st ; but also those with a Masters. Centre for Employment Research

11. Significant Probit Results (2) EU (other than UK) nationality reduces the predicted pass rate by 13.8% points. Important to ensure that this is not an artifact of the process, rather than a characteristic of the students. This impact remains after controlling for verbal score (significant effect for those who score between the median and upper quartile; increasing the predicted pass rate by 19.2%). Controls for ability/achievement both before (UCAS Tariffs) and after (verbal and numeracy test scores) UG study. Various of these controls are significant; as is the indicator of significant work experience. The histogram of predicted values from this probit model shows a kernel distribution with no systemic bias towards failing or humps. Centre for Employment Research

12. OLS Models The Knowledge, Application & Communication scores were modelled using OLS and support Probit findings. However, in addition: Significant positive coefficients for the Oxbridge and Masters variables when explaining Knowledge scores Significant positive effect of possessing a Masters qualification when explaining Application scores. Significant positive effect of extra curricular activity when explaining Communication scores (which is encouraging). Centre for Employment Research

13. Tenuous Conclusion and Extensions Type of university and type of degree (PPE, Econ, mixed etc.) does not seem to have much effect. Limited controls for innate ability, but we do have some indicators of ability or achievement both before and after study at levels 4 to 6. Tentatively suggest that our results indicate that innate ability is more important than other factors which are aimed at moulding Economists. Extensions Interactions as sample size grows – e.g. Class and Type of degree with institution (breakdown of ESRC Masters). More explanatory variables such as years since graduation, gender, ethnicity and re-applicant status. Analysis of withdrawals based on candidates expectation of likely EAC outcome and/or other alternatives available. Centre for Employment Research