The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income



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    • Paul Oyer is at the Graduate School of Business, Stanford University. I thank Ken Corts, Vicente Cunat, Liran Einav, Eric Forister, Campbell Harvey, Dan Kessler, David Robinson, Kathryn Shaw, Andy Skrzypacz, Ilya Strebulaev, Till von Wachter, Jeff Zwiebel, anonymous referees, and seminar participants at Berkeley, Chicago, Dartmouth, Middlebury, IZA/SOLE, Gerzensee, and the AFA meetings for comments. I thank Ed Lazear for both sharing the MBA survey data and providing useful suggestions. I am also grateful to Stanford's Vic Menen and Andy Chan and to Wharton's Christopher Morris and Jennifer Sheffler for providing historical placement information for their schools and to Kenneth Wong for research assistance.


I show that stock market shocks have important and lasting effects on the careers of MBAs. Stock market conditions while MBA students are in school have a large effect on whether they go directly to Wall Street upon graduation. Further, starting on Wall Street immediately upon graduation causes a person to be more likely to work there later and to earn, on average, substantially more money. The empirical results suggest that investment bankers are largely “made” by circumstance rather than “born” to work on Wall Street.