Because most philosophies that frown on reproduction don't survive.

Wednesday, February 06, 2013

The Big Break

Bryan Caplan has a piece up at EconLog about the concept of the Big Break:
People often hope for a "big break" - a large, durable improvement in their situation. An unknown actor landing a major role in a big-budget film is the classic example. But big breaks seem to be everywhere: getting your first tenure-track job, becoming the new protege of the boss, or marrying someone way too good for you.

Once we accept that big breaks are common in reality, economists' next task is to explain how they're possible in theory. The top three models:

1. Discontinuity of the world. The simplest story claims that opportunities are extremely discontinuous. As a result, the gap between your best option and your second-best option is often large. So when market forces change, some people predictably experience benefits that seem all out of whack with the size of the shift.

2. Imperfect information. A subtler story says that while opportunities are fairly continuous, discovery of opportunities is costly and haphazard. For some people, of course, the crucial missed discovery is that, given their skills, they should be grateful for what they have. For most people, however, the reality is that there are many better ways to spend their lives... if only they could pinpoint them - or convince others that they're deserving. Sadly, though, it takes a lifetime to uncover even a tiny fraction of your opportunities in this world.

3. Rationing. This story says that big breaks happen because markets don't clear. Sometimes the reason is government regulation. Think about winners of each year's Diversity Immigrant Visas: from Third World poverty to First World luxury by the luck of the draw. On a smaller scale, think about all the people praying for a rent-stabilized apartment in Manhattan - or an old-fashioned union job.

Still, the reason doesn't have to be government. Social norms impede market-clearing too. Think about the hundreds of qualified applicants for every position in mortgage-backed securities or construction in 2010. Wages stayed high, but even interviews were almost impossible to find. The same goes, of course, for gender-role norms. Imagine a major war leads to a low male/female ratio. If social norms don't adjust in men's favor, there will be a shortage (in the technical supply-and-demand sense) of men. Women who still manage to marry on traditional terms enjoy a big break.
If I were to identify a "big break" in my career history, it was back about a year before I started this blog. I was working as a contractor at Dell at the time, and a team from marketing was moving into the other side of my aisle of cubes. In the cube directly behind me, I saw a guy take out pictures of four kids and then an ultrasound. "I bet he's Christian," I thought, and sure enough, a bible and book of prayers got unpacked shortly thereafter.

Over the next few days I got to know the guy, who turned out to be an Excel guru who specialized in pricing analysis. I managed to help him out with a few Excel problems, and to provide a lot of help to a woman who was on the same team (sitting in the next cube over from him) who was having a lot of trouble with the Excel work in her new role. A few months later, she moved on (she really wasn't a good for an analytical role) and with her recommendation and his, I was able to get the job. Several years later, after proving myself in that job and another one, that same guy who I'd met when he moved into the cube behind me had become a manager and he hired me onto his team to do pricing. Seven years and several jobs later, I'm a director of pricing analytics.

I think of Caplan's three big break stories, mine would fit best under the imperfect information one. I was fully capable of doing the analytics work that I was hired on to do, but I didn't know exactly what a marketing analyst did until I started helping one out, and the hiring manager wouldn't have known that I was well suited for the work if I hadn't been helping out people on his team with their work.

Of course, as MrsDarwin points out, the real big break that we both had occured at a freshman dance. I'm not sure I'll try to classify that one, as it was one-of-a-kind.

Have you ever had a "big break"? If so, what type of big break would you describe it as?


Bernadette said...

One big break I had happened a bit over a year ago. I think it was a combination between the last two types of breaks. I had been struggling for some time with underemployment, trying and failing to make ends meet first with one part time job, and then with two and a tutoring gig on the side. I applied for every job that came up that I was even remotely qualified for (mostly desk-type clerical), but there were few jobs available, and since I didn't have a degree, I appeared unqualified. Many of the jobs I applied for had hundreds of applicants. Even when a rather high up person in my company decided to advocate for me, and seemed to have gotten me a better opportunity, it fell through when the person who was supposed to move on decided to stay. So a combination of rationing (few jobs available, those who had them holding on to them) and lack of information (key people not being aware that I was very qualified/able to do the work) was at work.

What eventually happened was that one of my sisters happnened to be talking to the person who is now my boss. My boss mentioned that they had a very part time job opening availalbe, but had to close the job requisition because they were flooded with more applications than they could handle. My sister shared that I was someone who could easily do that job, and I was looking for more hours. She passed on my resume, I was called in for an interview, and got the job. At my 30 day review, having demonstrated my skills, I was offered the full time job that I currently hold.

MrsDarwin said...

As I said to Darwin last night, I think my big break was meeting him. He's had several breaks since then, and those have been by extension my breaks, but I now lead more of a hidden life which isn't so conducive to running into big personal economic or social breaks. So I guess I fall into the "women who still manage to marry on traditional terms" category -- and it's very good.

Jeff Miller said...

My big break was sort of iterative and maybe is really not classed in that category. Regardless I consider it joining the Navy. This had so many effects on my life and my beliefs that it led to everything else. Even when I retired from the Navy I got the job I now have had for the last decade and a half is because of the recommendation of a civilian I met as part of my job then.

JMB said...

My maternal grandfather had the biggest big break I can think of. He left Germany after his mother died in the mid 1920s. A tool and dye maker by trade, he was able to get a Visa to either US or Argentina. He chose the US. He landed in NYC and worked as an elevator operator. One of his buddy's told him that they were hiring lots of people in Detroit. He got a job at Ford. On the side he started a little manufacturing shop in his garage. Then he moved it to a larger place. Ten years later he landed the contract to make grills for Jeeps during WW2. He expanded his business to scrap metal, air conditioning parts and industrial fans. Of course, along the way he met and married my grandmother who played a huge role in keeping it all together.

As for me, I was an underemployed college grad working as a front desk clerk at a fancy hotel in NYC and living in Brooklyn when it wasn't cool, safe and gentrified. One the security guards at the hotel lived near me in Brooklyn and would give me a ride home on late night shifts so I wouldn't have to take the subway. One night I was complaining about the job and he mentioned that his sister worked for a big brokerage firm in human resources. She sent me to a derivative trading desk run by a alumni of my college and he took a chance on hiring an art history major and well, the rest is history.