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Want a job in advertising? Go to school.
Subject Increase in Demand for Education During Economic Slump
Topic Supply and Demand; Equilibrium
Key Words Change in Demand; Economic Slump
News Story

The recent economic slump has caused the advertising industry to shed "tens of thousands" of jobs in the last few years, causing a number of students to conclude that they are better off in school. Advertising schools have experienced significant increases in enrollment over the last two years. Creative Circus in Atlanta reports a 10% increase from a year ago, and the Miami Ad School has experienced an 18% increase over the previous two years.

These schools are principally trade schools for advertisers, offering certificates upon graduation, although some schools do offer masters-level degrees. These schools often provide applied training, putting its students into real-life advertising situations. Given the relative scarcity of jobs in the industry, would-be advertising workers are recognizing that emplyers will require additional training and expertise as graduates seek jobs in the industry.

As a result of their increased education, students are able to find jobs more easily. Creative Circus reports that 85% of its 2002 graduates were working in their chosen field within six months of graduation, some at very prestigious advertising agencies.


(Updated November, 2003)

Questions
1.

Illustrate what is happening in the market with a graph of supply and demand. Be sure to label your curves and indicate the direction of any shifts.

2. Given the increase in students in advertising schools, what would you expect to happen to the wages of these graduates in the short term? Why?
3. How does this situation reflect the principle of opportunity cost?
Source "Despite the Slump, Students Flock to Advertising Schools," Erin White, The Wall Street Journal, 14 October 2003.

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