THE MARKET FOR COLLEGE-TRAINED MANPOWER: A STUDY IN THE ECONOMICS OF CAREER CHOICE.

ByRichard B. Freeman '64. Cambridge: Harvard University Press, 1971. 264 pp. $10.

Freeman's book, a revised version of his doctoral dissertation, is one of the most impressive studies written in recent years in the field of manpower and labor economics. There is little question that both in its methodology and in its empirical findings the study represents a significant contribution to this important field. I should note, however, that this is definitely a book written for professionals rather than for general readers. In tackling the issues to which he addresses himself, the author makes extensive use of the techniques of modern economics—and particularly of econometric models. A professional will appreciate—and indeed applaud—the highly imaginative application of these tools. But even a relatively sophisticated lay reader would find the study rather heavy going.

As its title implies, Freeman's study deals with the operation of the labor market for high level, primarily college trained, manpower—engineers, accountants, Ph.D.'s in a variety of fields. More specifically, the study concerns itself with the question of whether the post-World War II developments in this market can be meaningfully explained in terms of an economic theory of labor supply—i.e. theory that would put, other things being equal, primary emphasis on the importance of economic incentives as inducement for entry into particular occupations. The answer that emerges from the study is that the market for high level manpower does indeed operate pretty much in accordance with the model provided by economic theory. Freeman's econometric work thus indicates that the supply of young men to highly trained occupations governed by economic incentives. "All else being the same, increased wages attract students to a field and add to a supply of specialists several years later. Lags in supply are due primarily to the length of educational programs." Analogously, economic incentives affect also career (and curriculum) choices of students who are already in the "pipeline of production," i.e. who are in the process of training for a specific occupation. For example, a rapid rise in salaries of an occupation increases number of students who actually comply their training for that occupation.

The preceding should not give an impression that Freeman's study merely tests the kind of simplified supply-demand relationships that some of the DarthmuthAlumni Magazine readers may remember from their elementary courses in economic The process of labor supply adjustment to changes in economic incentives is in the actual world frequently fairly complex, and this is well recognized in Freeman's econometric models. Indeed what is impressive about these models—and the empiric results that stem from them—is the fact th; they do take into account the various lags in adjustments of the labor supply and the concomitant fluctuations in salaries and supply-demand relationships of particular occupations.

In addition to its main theme, Freeman's study deals also with several related aspect of the operation of the market for high level manpower: the influence of stipends on career decisions, the incidence of costs of higher education, the characteristics of the market for university faculty, the extent students' knowledge concerning salaries at income of particular professions. The discussion of some of these and other topics: based on the results of a special survey conducted by the author; this sunt, produced a great deal of new—and very valuable—information pertaining to the process of a career decision. In dealing wit all of the topics, Freeman displays be imagination and a very high degree technical skill—a combination of qualities that one encounters only in the very best professional work.

Richard Freeman, still in his twenties, has the distinction of being an assistant profess of economics both at Harvard University and at the University of Chicago, quality of professional achievement reflect! in his book provides undoubtedly one of major reasons -why the economics ments of these two leading universities have been willing to tolerate what might normally be viewed as "highly irregular" status of the author.

Dartmouth Professor of Economics, Mr. Segal is Chairman of the Department.