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.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.
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.
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?
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