The rapid increase in the number of new PhD economists and the recent slowdown in the growth rate of academic vacancies has forced increasing numbers of new PhD's to take first jobs in government and industry. The majority of first jobs are still in educational institutions, but this percentage has recently fallen.' (See Table 1.) Also, it seems likely that new PhD's are being forced to lower prestige institutions than previously. Nevertheless, while type of employer has changed, as Professor Boddy indicates in his paper, very few PhD economists are actually unemployed. The much-discussed crisis arises, then, not from a failure to obtain employment but rather from disappointment about first jobs and unsatisfied expectations about the start of one's career path. These expectations in turn are determined by a common set of values most of us hold, values which are implicitly or explicitly acknowledged when we chat about what it takes to be a economist. I think it is useful to articulate these values, for they not only explain current disappointments but also explain why new PhD's may continue to be disappointed in the future. Professional bliss for most economists seems to be employment at a high-status university and a research career, only lightly sprinkled with teaching responsibilities. Evidence of a successful career is a lengthy bibliography, appointment to A.E.A. committees and the A.E.R. editorial board, and now even the chance of a Nobel prize. Put more directly, a economist is a research academician at a big-name university who stresses publication and identifies with other research economists. What accounts for this widespread emphasis on academic affiliation? Given that an individual wants to pursue a research career, it seems reasonable to argue that opportunities for research can be found outside the university. Admittedly, the intellectual stimulation of an academic department may be missing, but it would seem on balance that government and industry do have challenging research opportunities and the advantage of seeing one's analysis put to use. * This paper benefited materially from the comments of Richard Schramm, Cornell University. 'There is a good deal of variation among disciplines in the percentage of first jobs that are in educational institutions. Generally, the humanities send the highest percentage back into academe; 86.7 percent of the 1969 doctorate recipients in philosophy went to educational institutions. In the social sciences the figure was highest for sociology (79.6 percent) and lowest for psychology (50.2 percent), while in the sciences the majority of new PhD's did not go into academe. Respective figures for engineering and chemistry were 28.3 percent and 17.7 percent.

[This paper considers the estimation of a simultaneous equations model in which the dependent variables are qualitative. The model is a simultaneous version of the multivariate logit model, and can be estimated by maximum likelihood. An example is presented, dealing with the prediction of occupation and industry of employment of a worker based on certain demographic variables.]