Should the AEA offer guidelines on the timing of job offers?

Question

There has been recent discussion (Twitter:  https://twitter.com/fscoamodio/status/1088858596413267969?s=11) about the timing of job offers. In particular, there are questions about exploding offers and coordination issues with European and Chinese markets. Offering departments presumably would like to be unconstrained. (Although they might agree that other departments should be constrained when offering jobs to their students.) Candidates benefit from some coordination. I suggest here some minimalist guidelines.

Cross-university guidelines for hiring are not unusual in academia. Here are two examples:

American Association of Universities: (with regard to faculty moving between institutions)

"We believe that a responsible approach for both the institutions and the faculty members would be to consider offers made or pending on May 1, or thereafter, to be effective normally only after the intervention of an academic year"

American Historical Association:
"The candidate must then have a reasonable amount of time, from the receipt of the offer in its written form... before he or she must make a binding decision. ... this period should last a minimum of two weeks from receipt of the formal offer....If university procedures make it impossible to provide a letter of intent, the candidate may be given a deadline for a decision. In such cases, however, the candidate cannot be considered to be morally bound by his or her agreement until a written document is issued and received, and has a clear right to withdraw his or her acceptance."

Let me offer a first attempt at suggesting a policy the AEA might adopt. Improvements/disagreements welcome of course.

1.  Job offers should allow for a minimum two weeks following receipt of a formal, written offer to respond.
2.  Job offers should remain open until at least January 31.
3.  Acceptance of an offer that does not satisfy (1) and (2) is not considered ethically binding on the candidate.

Answer 1

Guidance on timing has failed in many markets, but one in which it has worked is Ph.D. admissions.  The Council of Graduate Schools' "April 15 Resolution" has effectively controlled the timing of Ph.D. admissions, both by setting a date, and empowering applicants to change their minds up until that date.

"Students are under no obligation to respond to offers of financial support prior to April 15; earlier deadlines for acceptance of such offers violate the intent of this Resolution. In those instances in which a student accepts an offer before April 15 and subsequently desires to withdraw that acceptance, the student may submit in writing a resignation of the appointment at any time through April 15. "
https://cgsnet.org/ckfinder/userfiles/files/CGSResolution_RevisedAug2018.pdf

That said, there can be complications, and this kind of resolution works in some markets (e.g. Gastroenterology fellows) but not in other apparently very similar markets (Orthopedic surgery fellows).

Comments

I think this works well because each school has 15-40 admission spots to work with.  If you usually get 15, you're ok gettign 12-17, and if you usually yield 40 students, you can absorb 35-45 for a given year.  The academic market is usually far lumpier.  I've heard of departments like UC Davis making extra offers (they hired 7 a couple of years ago), but now they likely can't search for a couple of years.  

So I while to Feb 15 or March 1 as the offer deadline, the amount of travel (flyouts vs file reviews), the limited number of offers, and all of that might make that all impossible.

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The suggestion is to add some limited coordination, so as to reduce (what I regard as) some of the worst abuses. It's not going to eliminate all decision risks for candidates. Two weeks with a January 1 deadline doesn't terribly constrain departments (at least in the U.S.)

There is a specific reason why I think the mechanism is likely to work in this market. The very top departments pretty much behave this way. So on the demand side, they would have no problem. The top departments also supply a large fraction of PhDs, especially those going to academia. This gives their students a little extra protection. If the top departments agree the suggested policy is the right way to act, other departments won't want to be seen as breaking the rules.

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This is a problem well worth thinking about, and I agree that moral suasion, led by top departments (which in any event don't give exploding offers) might work. The mechanism through which it could work is empowering their students to effectively resist having to make early commitments to exploding offers.
But I am not sure that this would e.g. influence Chinese universities, which when they make exploding offers to students who might eventually want to return to China, threaten them with a loss of reputation if they agree to an exploding offer and subsequently change their minds.
And I am not sure it would deter American mid-rank places when they are under constraints by their deans to not have any further flyouts until they get a response to an offer they have made.
And the issue isn't just in January, as flyouts continue through February at least, and a short-fuse offer made on February 1st may still have to be answered by a candidate who has upcoming flyouts.
So it's an important problem, but not necessarily an easy one to solve. Some markets have managed though.

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Al's points make sense. Let me add two more thoughts.

(1) The AEA could add a flag to JOE ads as to whether the employer intended to observe the social norm. An employer could decide whether to check the box or not, but this might strengthen the social norm.

(2) Seems the real question is whether this is a market where we would be happy to have an improvement, since I think a complete "solution" is unlikely. I'll note that the Council of Graduate Schools resolution quoted above is very effective even though it is imperfect (many non-American programs don't comply). Any guidance from someone who does a lot of market design on whether this is a place where a partial progress might be worth doing?

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Ha, no one yet does a _lot_ of market design, but there's hope for the younger generation...

Regarding partial progress, my feeling is its almost always worthwhile, and mostly all you can get.  But I would first want to know more about the magnitude of the problem, and the underlying causes. That's the kind of thing a survey of participants on both sides of the market might be helpful for.  Are we seeing lots of exploding offers?  Are the employers who make them facing some constraints that can't be relaxed?

While I don't know how prevelant exploding offers are in economics, I do think there's another common, related problem that afflicts the timing of offers in many labor markets but that we've largely dodged so far, which is very early offers. Right now I think that offers before the ASSA meetings, which must be answered before the meetings, are largely confined to offers to economists from Marketing departments at Business schools. (I haven't seen a survey about that, so I'd be glad to hear what others think.)
My guess is that is because the ASSA meetings actually provide a service that, by cutting the costs of interviewing, makes it an equilibrium to interview then.
I wonder whether improvements in skype and other tools for remote interviewing might come to undermine that equilibrium (which seems to be happening in the academic market for philosophers), which I suspect wouldn't be good for the market, much in the way that exploding offers may be harming it a bit now...

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Certainly agree on the need for more data. We have one student this year who received a nice offer from the private sector with a short fuse before the meetings. So this moves n up to 1. :)

My suggestion included no-deadlines-before January 31, to help with the before the meetings stuff.