‘Replaceability’ isn’t as important as you might think (or we’ve suggested)

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Often if you turn down a skilled job, the role simply won’t be filled at all because there’s no suitable substitute available. For this and other reasons we don’t place as much weight as we used to on the idea of ‘replaceability’.

When we started 80,000 Hours, one of the key ideas we presented was the replaceability argument:

Suppose you become a surgeon and perform 100 life saving operations. Naively it seems like your impact is to save 100 people’s lives. If you hadn’t taken the job, however, someone else likely would have taken it instead. So your true (counterfactual) impact is less than the good you do directly.

I still think this is a good argument, but I’m not sure how relevant it is when comparing real career options.

In particular, I see the argument often being used incorrectly in the following two ways:

  1. Ignoring direct harm: Suppose you’re considering taking a job that some people think is harmful (e.g. certain parts of the financial sector) in order to donate, do advocacy or build skills. You reason “if I don’t take the job, someone else will instead, so the potential harm I’ll do directly doesn’t matter”.

  2. Ignoring direct impact: Suppose you’re considering working at a high-impact nonprofit. You reason “if I don’t take the job, someone else will instead, so I won’t have much impact.”

I disagree with both of these claims in most circumstances. Why?

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The rise of income inequality and what it means for your career

One of the most important (though maybe regrettable) long-term trends effecting the outlook of many careers is the rise in income inequality. In countries such as the United States and the United Kingdom, the difference in earnings between the best and worst paid has risen sharply for the last few decades, with the top earners taking a higher and higher proportion of total income. From the early 1900s to the 1970s, income inequality gradually decreased. However, in Anglo-Saxon countries it began to rise again from the late 1970s. The rise was sharpest in the United States, where the income share of the top decile of earners rose from 33% to 48% in forty years, while the share of the top percentile rose from 8% to 17%.1 In Japan and the rest of Western Europe on the other hand, inequality was either steady or rose much more gradually.

Increasing income inequality means a better outlook for many high-earning careers. It may also reflect trends in which skills are most in-demand and useful as technology changes, making it important to understand if you want good career capital in the future. Finally, it may mean the financial rewards of being at the top of a profession (compared to the middle) are increasing, and this means the importance of personal fit is increasing.

The top decile income share: Europe and the U.S., 1900-2010
This graph is taken from Pikkety (2014) 2

In the rest of this post, we’ll look at the reasons economists have put forth for the increase in income inequality, and speculate on whether the trend will continue.

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Why and how to keep your options open

Keeping options open is important for everyone, it’s especially important if you want to make a difference, because the most effective career opportunities are likely to change in the future. Indeed, we think it’s usually more important to keep your options open to make an immediate impact.

Many people think that ‘keeping your options open’ means being non-committal and avoiding tough decisions. We disagree. The best to keep your options open is to commit to building flexible abilities and resources, such as transferable skills, money and a public platform.

For more, see our new page on the topic.

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Should you wait to make a difference?

The issue

One big picture consideration in career choice is the question of how important it is to make a difference now versus later. Here’s the issue: suppose you could either work at a charity next year or go to graduate school. If you work at the charity, you’ll be making a difference right away, speeding up progress. If you go to graduate school, you’ll be investing in yourself and able to have a larger impact later. Which is better?

If you think it’s better to make a difference as soon as possible, the more you’ll value your immediate opportunities for impact. In our framework, you’ll put more emphasis on path impact potential. If you think it’s better to invest and give later, the more you’ll value activities that build your skills, connections and credentials (career capital), and the more you’ll value learning about the world so you can make better decisions in the future (exploration value).

There’s a similar issue with charitable giving. If you have some money, you can either give today, or you can invest your money, which will grow over time, and give a larger amount later. Under what circumstances should you invest rather than give now?

Summary

Overall, we favour investing in your human capital and wealth early, so that you make a greater difference later in your career. Why?

  1. You’ll be able to find better opportunities to make a difference in the future, because you’ll get wiser and be able to use better research in which causes and careers are most effective.
  2. Early-to-mid career, most people can make investments that significantly increase their career capital, such as learning new skills, doing a graduate degree and building a professional network. The returns from these investments more than justify the cost of waiting.

Nevertheless, there are a few other reasons to start making a difference now: it will teach you about the world; it will help you find collaborators; it’s motivating; and it will help you build altruistic habits.

So, overall, we suggest that early in your career you mainly focus on building career capital and learning more, though still put some weight on your immediate impact. If choosing between two jobs, this could mean choosing the one that best builds your career capital, using immediate impact as a tiebreaker. As you get older, put more and more weight on your immediate impact.

Read on to see a full discussion of the considerations and our reasoning.

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What does economics tell us about replaceability?

Introduction

‘Replaceability’ has become a core concept in discussions of career choice among Effective Altruists (EAs) – put simply, people should not simply consider the ‘direct impact’ from doing a job, but instead the difference in outcomes resulting from taking that job, relative to not taking it. Ben Todd and Seb Farquhar have both written blogs introducing this concept, and the importance of counterfactual reasoning in general (read these first if you’re not familiar with replaceability!); Paul Christiano and Ben Kuhn (among others) have written blogs further exploring the concept, and its various representations and applications. Some Effective Altruists (EAs) have noted that representations of replaceability have varied in their sophistication, and Will MacAskill summarises this nicely as the ‘simple view’, ‘simplistic replaceability’ and ‘correct replaceability’.

‘Correct replaceability’ is particularly nuanced and complicated, and comprises taking into account the full set of counterfactual outcomes not only in your (potential) job, but in any other jobs affected by the employment decision, through knock-on and labour market effects. Given this, and that ‘replaceability’ varies significantly across different industries and jobs, Will MacAskill and Ben Todd asked me to think about what Economics has to tell us about the concept. For clarity, rather than think about the ethical considerations of ‘replaceability’ as a whole, they asked me to answer a sub-question, namely: “according to mainstream economics, if I add myself to the labour pool for job type X (being a doctor, or an aid worker, or a banker), then how many more type X jobs come into being (on average)?”. Although these issues have been discussed before, this blog post is a first attempt at providing a thorough analysis of this question.

Summary

  • I set out the classical, Econ 101 supply and demand model and discuss the assumptions it makes. I argue that this is a useful framework for considering our question, then show how the answer depends crucially on the elasticities of labour supply and demand. Unfortunately, empirical economic research cannot tell us much about these elasticities for individual industries.

  • There is no ‘one-size-fits-all’ answer to our question – it will vary considerably across different industries and we must try to understand how each industry functions in order to make an informed estimate.
    I believe that the supply and demand framework, or some variant of it, is useful for analysing our question for most jobs and industries, particularly those that are not highly specialised.

  • I discuss how (and whether) this framework should be applied in a few industries, most of which are seen as viable EA career paths. This framework can lead us to some (tentative) conclusions:

    • Entrance into industries with a quantity restriction (e.g. through a limited number of occupational licences) is likely to have (close to) zero impact on the number of jobs in that industry. This may apply to medical school and licensed professional industries (e.g. becoming a barrister in the UK).
    • Entrance into (narrowly defined) industries which require relatively transferable skills is likely to result in less than 0.5 additional jobs in this industry, as (potential) workers can easily substitute into other industries (labour supply is elastic). This may apply to banking and consultancy.
    • Entrance into industries in which (potential) workers have a strong preference to work is likely to result in more additional jobs (perhaps between 0.5 and 1), as workers will not substitute into other industries at such a high rate (labour supply is inelastic). This may apply to jobs in the charity sector.
    • In highly specialised industries/jobs, applying this framework may not be appropriate, as the hiring process will not resemble a competitive market. This may apply, for example, to taking a job with Givewell, who likely follow a process more akin to ‘threshold hiring’.In this case, it seems likely that taking this job may increase the number of overall jobs by close to 1.
  • This post only discusses one aspect of replaceability, and does not consider other issues related to the (direct) impact of a job, effects on the quality of employees, or long term effects of a job, such as creating social value.

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The replaceability effect: working in unethical industries part 1

High earning careers are often perceived as unethical careers. It’s not just that people think earning lots of money is bad, it’s also that a lot of the careers that make you really rich involve things that also seem immoral… This article will look at something called the replaceability effect. It’s the idea that, often, if you don’t take a job, someone else will take it. For some types of jobs, this is a very safe assumption, and it makes the harm you do by taking a job in an unethical industry much smaller than you might first guess.

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Practical ethics given moral uncertainty

Practical ethics aims to offer advice to decision-makers embedded in the real world. In order to make the advice practical, it typically takes empirical uncertainty into account…

But if practical ethics should take empirical uncertainty into account, surely it should take moral uncertainty into account as well. In many situations, we don’t know all the moral facts…

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Just what is making a difference: counterfactuals and career choice

When we think about how to make a difference in our careers, it is natural to think about what we can do directly. We think about the children we could build schools for, the homeless person we could help, what campaigns we might take part in, and so on.

But what we do directly is not the only thing that matters. We also need to think about what would have happened if we hadn’t acted – which is called a counterfactual…

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Delayed Gratification? – Choosing When to Donate

Most charities spend money at about the rate at which they take it in, while most foundations pay out just five percent of their assets each year, the legal minimum in the US. Which strategy does more good? The answer matters to you as well as to charitable organizations: you can give away your money soon after you earn it, or you can invest it in a donor-advised fund and allow it to grow for an indefinite amount of time before giving it away. (Donor-advised funds offer tax savings and require that the money be contributed to charity.) The question of whether to give now or later is complicated, so I’ll mention just a few of the considerations involved…

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