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Should I go to Grad School? And if so – which one?
Anindya Sen*
Department of Economics
University of Waterloo
November 10th 2011
* The opinions expressed here are mine and do not represent any official position of the
Department of Economics or the University of Waterloo.
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Graduate School
I.
Should I go to Graduate School?

If you have the marks - an MA in Economics makes a lot of sense.

Significantly higher earnings ($45,000-$80,000) relative to an
undergraduate honors degree in economics

Greater responsibility and more interesting work.

Relatively low opportunity costs. Most MA programs consist of 8
months of coursework and funding is available.

There are, of course, costs. You need to be certain that you want to
pursue economics as a profession. Switching careers - with an
undergraduate degree – is definitely easier.
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
In terms of specific opportunities – there are many different applications
of economics in the public and private sectors as policy advisors,
research economists, or consultants.

Some examples of former students - Rob Nicholson is the Executive
Assistant and Special Policy Advisor to the Assistant Deputy Minister
and Chief Economist of the Office of Economic Policy at the Ontario
Ministry of Finance. He provides advice and analysis on issues
impacting Ontario’s economy.

May Luong is a research economist at Statistics Canada and has written
numerous papers on teenage pregnancy, the financial consequences of
poverty and student loans.
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
Sarah Fong, is Senior Market Analyst at the Canada Mortgage and
Housing Corporation and is responsible for analyzing and forecasting
economic and housing market conditions in Southwestern Ontario.

The point is that professional possibilities are rich and diverse. You
could work at a crown corporation like Ontario Hydro or the
Independent Electricity Supply Operator and be responsible for
designing tariffs aimed at more efficient electricity consumption.

You might work at the Provincial or Federal Ministries of Finance and
provide advice on optimal income tax structure, income transfers, or
commodity taxation such as the recent HST. Employment at Industry
Canada or International Affairs could lead to roles in policy issues
concerning trade liberalization and industry subsidies/tax credits (R &
D)
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
You could work for financial institutions and insurance companies and
offer forecasts of the economy, interest rates, and market outlooks

Employment at firms such as Charles River Associates or NERA raises
the possibility of work relating to anti-competitive practices and
constructing models aimed at establishing lost sales or profits.
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Hotness, pay, and productivity
II. The MA as a step towards further education

Having an MA distinguishes you from other law school applicants and makes
you appear focused.

If you want to do an MBA – then do not do an MA.

There is of course the PhD. If you are passionate about economics and doing
research – then this is an option. However, unlike the MA – there are significant
short run opportunity costs in terms of lost income.

Of course, they may not be significant if this is what you want. There are
opportunities in the private and public sector. Bear in mind that getting an
academic job is not impossible – but relatively very difficult.
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III. Typical structure of an MA program

8 month coursework. Core courses in micro, macro, and econometrics. At
Waterloo taking a Research Methodology and an applied micro or macro
econometrics course are pre-requisites. So students then have 3 Electives.

You could also do 7 courses and a Major Research Paper.

Examples of electives are Industrial Organization, Public Economics, Labour
Economics, Financial Economics, Real Options and Investment under
Uncertainty, Environmental and Natural Resource Economics, Topics in
Numerical Methods.

The 8 month option is ‘Regular’. With the Co-op option, courses can be
completed in 2 terms (8 months) . Co-op placement is an additional 8 months.
This is unique to Waterloo and reflects the applied nature of our program.
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
Most U.S. universities do not offer a separate Master’s degree in economics.
Undergraduates are admitted directly to doctoral programs. Those who fail out or
decide not to continue are awarded an MA.

On the other hand, a Master’s is a stand alone respected degree in Canada and Europe.

I would NOT recommend applying directly to a PhD program in the U.S. First do a
Master’s at a reputable Canadian school. This will allow you to determine whether
you want to commit to a PhD. Second, U.S. schools are aware of challenging
Canadian programs and often offer good funding to Canadian applicants as good
performance at the Masters is a signal of potential success at the doctoral level.

But students with a very strong math background may consider this route.
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IV. Admission Requirements
Honours bachelor’s degree in economics. Sometimes we admit students with
limited economics but with an extensive mathematics background.
Strong preparation in economics and in the mathematical tools are needed to be
successful in the program, including the following university-level courses:
two semesters of intermediate and/or advanced microeconomics, two semesters of
intermediate and/or advanced macroeconomics
at least one semester of mathematical economics or equivalent. (Note that two
semesters of mathematical economics are highly recommended or equivalently two
semesters of calculus and one of linear algebra.), at least two semesters of statistics
and/or econometrics
Two/three academic letters of reference
Some departments – like Western – admit students with very strong math and
limited economics
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
At Waterloo, as in most universities – we focus on performance in the last two
years and we look at grades in ECON 211, ECON 311, ECON 301, ECON 401,
ECON 302, ECON 402, ECON 321, and ECON 421. Most successful applicants
to our program have an 80% average in these courses.

It is possible to get admission without ECON 421 and ECON 311- but you will be
given lower priority. And students without these courses often find an MA to be
initially very challenging.

You usually need an 85-90% average in the above courses and very strong letters
to get into the top Canadian schools – Toronto, UBC, Queens, and Western
(Western follows the U.S. model and all students are admitted directly into the
PhD). Our undergrads have been admitted to these schools- but the successful
ones have usually taken more math courses- even the economics students. Some
(not all) have a computer science/engineering background.

Last year was an outstanding year for our students. We placed 5 students in the
MA/PhD programs at Toronto, 2 at Western, and 1 at Queens. These are the ones
I’m aware of.
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
In terms of more math courses I would recommend MATH 126, 128, Cal 3MATH 237, Basic differential equations - AMATH 250, probability STAT 334,
and Applied Real Analysis AMATH 331.

I am more likely to admit a student with a 78% average who has taken all the
difficult courses including ECON 311 and ECON 421, rather than someone with
a 82% average who has not taken these courses. Other departments think
similarly. They go over your transcripts and look at your courses VERY
CAREFULLY. We have enough experience to detect a trend towards ‘bird’
courses.
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
Now just because a school has stricter admission standards – does not mean that
you just aspire to that department and ignore all others. Each department has
strengths in specific fields.

The top schools (UBC, Toronto, Queens, Western) are pretty theory oriented –
which may not be a good fit if you’re interested in policy and applied theory. In
other words go to the top schools if you think there’s a slight chance that you
may want to do a PhD.

McMaster and Waterloo are more applied. McMaster is very strong in health and
public economics. In addition to its regular MA, McMaster also has a Master’s
in Economic Policy, which is a terminal degree (you can’t do a PhD at Mac
afterwards) and is meant for people who are sure they want to go into policy.
Our strength is applied economics and the outstanding co-op program. No other
program really has that.

Guelph, Calgary, and Alberta have strengths in natural resources. Calgary is
unique in its offerings of behavioral and experimental economics.
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
Brock and Laurier offer a master’s of business economics. So if you’re interested
in a hybrid MA/MBA – that might be a good fit.

Carleton and Ottawa have the advantage of being in Ottawa and easy to apply to
federal job postings. They are also established programs with good course
offerings.

Dalhousie and McGill are strong in development economics.
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V. References and how many schools should I apply to
A good reference can make or break an application. Choose your reference with
great care. Be honest with your professor and ask if she could write you a strong
letter. When you make a request make sure that you attach an unofficial copy of your
transcript and a cv.
Carefully listen to the professor’s advice. They may be willing to write strong
letters for specific institutes and weaker ones for others. This is common.
Letters from professors who publish frequently are respected, because they are well
known and thus, credible. Lecturers are usually not well known.
Be very polite in asking for a reference and make sure that you are well organized.
You should be very clear in what the deadlines are and what the professor has to do.
Most applications these days are on-line. However, some (like Mac) are still through
paper and envelope. Make sure that you offer to provide stamped and pre-addressed
envelopes. A small courtesy like this goes a long way.
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Most applications are due in January and February. So you should be trying to
finalize references now. Most of my successful applicants contact me and send me
requests by September.
Almost all professors write a significant number of letters in January and February.
Each year I am usually approached by 10-12 students who ask me to write 6-8 letters.
This does take a considerable amount of time. So always ask how many letters a
professor can write for you. I think applying to 8 schools for an MA is reasonable.
Three top tier, three middle, and two lower ranked. You just never know what happens
and who you are competing against, and funding cuts a university may be going
through. Sometimes, admissions seem quite random.
In terms of your application – offering evidence of research ability may be useful. We
are one of the very few schools where (honours) undergrads have to write a paper
(472). If the paper is interesting and well written (no grammar mistakes!) you should
consider including it in your application. However, always ask your main reference’s
opinion first and see if she thinks it is a good idea.
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VI. Other Programs
You may be interested in economics and public policy, with a slightly less technical
orientation than a pure Master’s . These days, there are many options for students
interested in policy related degrees.
Queens, Calgary, Ottawa, and Carleton and the University of Regina all have policy
programs with Carleton’s being particularly well known. Calgary is a full cost recovery
(much higher tuition) program.
We have our recent Masters in Public Service which is also cost-recovery.
Toronto has a Master’s in governance and policy which is also cost recovery.
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VII. Finally a bit about our own program
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We have a very well balanced and challenging program. And the selling point is
Co-op and the Waterloo brand name.

Examples of co-op placements in the last 2 years . . .
Human Resources & Development Learning Branch, Forecasting Group, Industry
Canada, Telecommunications Policy Branch, Strategic Policy Sector, Scotia
Capital, Ontario Health Quality Council, Department of Fisheries & Oceans
Canada, Policy Sector, Economic Analysis & Statistics Group, Infrastructure
Canada, Program Operations Branch, Ontario Ministry of Government Service,
Business Improvement Analyst, Sears Financial, Ontario Teacher’s Pension Plan,
Asset Pricing TD Securities
60% co-op placement rate overall, 100% for domestic students
Salary of $24,000 over 8 months
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
In 2011-2012, the average financial support package is $8,000 per year for MA students
and $22,000 per year for PhD students.

Tuition Fees
 $5,200 for 2 terms – Canadians and Permanent Residents
 $12,200 for 2 terms – International Students
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February 1 application deadline date
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Admission is only for September of each year
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Complete your application on-line at:
http://economics.uwaterloo.ca/grad/grad-apply.html