Trudie (Tyler) says:

Two core groups of people are well-suited to be economists:

1. You math GRE score is over 800, you are totally focused, you love working long hours on your own, and you have good enough letters of recommendation to get into a Top Six or perhaps Top Ten graduate school. Note that white Americans from this category have been partially preempted by competition from foreigners.

2. You could be happy as an academic without much of a research career. Working at a teaching school is a rewarding life, albeit a poor one relative to your investment in human capital.

I think Trudie overestimates the human capital investment necessary to go to a teaching school or a mid-level state school. Sure, if you go to Harvard and you end up teaching at a branch of the Penn-State system you probably over-invested in human capital because you could have had the same job by going to West Virginia.

If, however, you want to teach economics and do a little research, the job market for economists is such that you can go to a lower-level program and get a tenure-track job at a fairly decent school. For example, look at the placements for WVU. Now I'm sure that many of the readers of MR would look down on teaching at a Gustavus Adolphus or a Penn State-Erie. But for someone who wants to teach economics and do a little research, those are good outcomes, especially relative to the investment in human capital. Note that Morgantown has a low cost of living and most of our students graduate in four years.

And if you are good enough to land a JPE, you can end up with a really good job for the Fed.

So for students interested in going to grad school because they want to teach economics and do a little research, know that you don't have to go to a top-ten program.