(Obvious CoI/own views, but in my defence I’ve been arguing along these lines long before I had—or expected to have—an EA job.)
I agree ‘EA jobs’ provide substantial non monetary goods, and that ‘supply’ of willing applicants will likely outstrip available positions in ‘EA jobs’. Yet that doesn’t mean ‘supply’ of potential EA employees is (mostly) inelastic to compensation.
In principle, money is handy to all manner of interests one may have, including altruistic ones. Insofar as folks are not purely motivated by altruistic ends (and in such a way they’re indifferent to having more money to give away themselves) you’d expect them to be salary-sensitive. I aver basically everyone in EA is therefore (substantially) salary-sensitive.
In practice, I know of cases (including myself) where compensation played a role in deciding to change job, quit, not apply etc. I also recall on the forum remarks from people running orgs which cannot compensate as generously as others that this hurts recruitment.
So I’m pretty sure if you dropped salaries you would reduce the number of eager applicants (albeit perhaps with greater inelasticity than many other industries). As (I think) you imply, this would be a bad idea: from point of view of an org, controlling overall ‘supply’ of applicants shouldn’t be their priority (rather they set salaries as necessary to attract the most cost effective employees). For the wider community point of view, you’d want to avoid ‘EA underemployment’ in other ways than pushing to distort the labour market.
Totally agree. I think we’re aligned on all your points.
So I’m pretty sure if you dropped salaries you would reduce the number of eager applicants
I’d expect a reduction but not a drastic one. Like I’d predict Open Phil’s applicant pool to drop to 500-600 from 800 if they cut starting salary by $10k-$15k.
Right, I (mis?)took the OP to be arguing “reducing salaries wouldn’t have an effect on labour supply, because it is price inelastic”, instead of “reducing salaries wouldn’t have enough of an effect to qualitatively change oversupply.
Aside:
I’d expect a reduction but not a drastic one. Like I’d predict Open Phil’s applicant pool to drop to 500-600 from 800 if they cut starting salary by $10k-$15k.
This roughly cashes out to an income elasticity of labour (/applicant) supply of 1-2 (i.e. you reduce applicant supply by ~20% by reducing income ~~10%). Although a crisp comparison is hard to find, in the labour market you see figures generally <1, so this expectation slightly goes against the OP, given it suggests EA applicants are more compensation sensitive than typical.
“reducing salaries wouldn’t have enough of an effect to qualitatively change oversupply.”
Right, this^ is what I mean.
This roughly cashes out to an income elasticity of labour (/applicant) supply of 1-2 (i.e. you reduce applicant supply by ~20% by reducing income ~~10%).
Oh, interesting.
It was a rough, off-the-top-of-my-head prediction, so I wouldn’t give the specific numbers too much weight.
That said, there’s probably a gradient of applicant income elasticity here (and in most places? I don’t know very much about labor economics).
I’d expect dropping salaries by $10k to reduce the applicant pool substantially, and by $20k to reduce it somewhat more. But there’s probably a hard core of applicants whose demand is quite inelastic (i.e. who would be excited to apply to EA jobs regardless of whether they paid $35,000 or $70,000).
And probably also there’s some lower bound where anything under it is too little to live on, such that setting salaries under that threshold would cause a sharp drop-off in applications.
(Obvious CoI/own views, but in my defence I’ve been arguing along these lines long before I had—or expected to have—an EA job.)
I agree ‘EA jobs’ provide substantial non monetary goods, and that ‘supply’ of willing applicants will likely outstrip available positions in ‘EA jobs’. Yet that doesn’t mean ‘supply’ of potential EA employees is (mostly) inelastic to compensation.
In principle, money is handy to all manner of interests one may have, including altruistic ones. Insofar as folks are not purely motivated by altruistic ends (and in such a way they’re indifferent to having more money to give away themselves) you’d expect them to be salary-sensitive. I aver basically everyone in EA is therefore (substantially) salary-sensitive.
In practice, I know of cases (including myself) where compensation played a role in deciding to change job, quit, not apply etc. I also recall on the forum remarks from people running orgs which cannot compensate as generously as others that this hurts recruitment.
So I’m pretty sure if you dropped salaries you would reduce the number of eager applicants (albeit perhaps with greater inelasticity than many other industries). As (I think) you imply, this would be a bad idea: from point of view of an org, controlling overall ‘supply’ of applicants shouldn’t be their priority (rather they set salaries as necessary to attract the most cost effective employees). For the wider community point of view, you’d want to avoid ‘EA underemployment’ in other ways than pushing to distort the labour market.
Totally agree. I think we’re aligned on all your points.
I’d expect a reduction but not a drastic one. Like I’d predict Open Phil’s applicant pool to drop to 500-600 from 800 if they cut starting salary by $10k-$15k.
Right, I (mis?)took the OP to be arguing “reducing salaries wouldn’t have an effect on labour supply, because it is price inelastic”, instead of “reducing salaries wouldn’t have enough of an effect to qualitatively change oversupply.
Aside:
This roughly cashes out to an income elasticity of labour (/applicant) supply of 1-2 (i.e. you reduce applicant supply by ~20% by reducing income ~~10%). Although a crisp comparison is hard to find, in the labour market you see figures generally <1, so this expectation slightly goes against the OP, given it suggests EA applicants are more compensation sensitive than typical.
Right, this^ is what I mean.
Oh, interesting.
It was a rough, off-the-top-of-my-head prediction, so I wouldn’t give the specific numbers too much weight.
That said, there’s probably a gradient of applicant income elasticity here (and in most places? I don’t know very much about labor economics).
I’d expect dropping salaries by $10k to reduce the applicant pool substantially, and by $20k to reduce it somewhat more. But there’s probably a hard core of applicants whose demand is quite inelastic (i.e. who would be excited to apply to EA jobs regardless of whether they paid $35,000 or $70,000).
And probably also there’s some lower bound where anything under it is too little to live on, such that setting salaries under that threshold would cause a sharp drop-off in applications.