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From CLAS News:

Connecticut’s high concentration in financial services employment now means it will face a sharp downtown in jobs and earnings, says the new issue of The Connecticut Economy , published by the Economics Department.

“Connecticut will probably be one of the hardest hit states in the country in terms of jobs lost and employment,” says Steven P. Lanza, executive editor of the quarterly magazine.

At a press conference unveiling the winter issue of the magazine, Lanza told economists and reporters that the financial services jobs, concentrated in the Bridgeport-Stamford and Hartford regions, with strengths also in the New Haven area, were “great news” when the economy was expanding.

Employment in insurance, securities, banking, and hedge fund businesses offered some of the highest paying jobs, benefiting the state in good times.

But the financial services industry it not only concentrated in Connecticut; it has a particularly high “job multiplier” effect. Financial services here measures 7.1 on the Location Quotient scale (anything above 1.0 shows more specialization in an industry than in the U.S. as a whole), and it spins off a large number of jobs and higher incomes for others in the region, too.

In good times, LQs greater than 1.0 “serve as engines of economic growth,” The Connecticut Economy reports.

When the engine sputters, however, the growth it stimulated grinds to a halt, too.

Job declines in the state are projected at nearly 4 percent, and earnings declines at nearly 3 percent, Lanza wrote, leading to tax revenue reductions, too.

More than 40,000 jobs in the state could be at risk, according to the magazine’s quarterly forecast. That number could double, under certain scenarios.

The magazine is forecasting unemployment topping 7 percent in the Bridgeport-Stamford region, 8 percent by this time next year in the Hartford region, and 7 percent in Norwich-New London in 2009.

If the slump extends through the next fiscal year, the magazine reported, the state’s budget gap could exceed $2 billion. Some estimates run three times that over the next two budget years, Lanza said.

The recovery may not come until after 2010, wrote Daniel W. Kennedy, senior economist with the Connecticut Department of Labor, Office of Research, who manages the magazine’s economic forecast.

“With the stakes do high, no state should be rooting more loudly for the success of the financial industry rescue package than Connecticut, or praying more earnestly for a merciful end to the current business cycle,” Lanza wrote in the issue’s lead article.

For more on the latest issue, go to

To hear a podcast of Steven Lanza talking about the latest issue, click here.


Denis M. McCarthy, retired chairman, CEO, and president of Fidelity Management Trust Co., a subsidiary of Fidelity Investments, will deliver the keynote address during Commencement on Dec. 14.

More than 800 students are expected to graduate during the University’s sixth annual mid-term Commencement Exercises, which begin at 2 p.m. in Gampel Pavilion.

McCarthy, who earned a bachelor’s degree in finance at UConn in 1964, and a master’s degree in economics in 1965, is co-chair of UConn’s current capital campaign and a member of the UConn Foundation Board of Directors. He chaired the board from 2000 to 2004.

He will receive an honorary doctor of humane letters degree during the December ceremony.

“I’m forever grateful for what a UConn education has meant in my life,” says McCarthy. “In my younger days, UConn was there for me and gave me a great start on life.”

Read more in the UConn Advance.

The Department fared well in a recent study on the research output of 129 U.S. economics departments that offer PhD degrees [“A Guide to Graduate Study in Economics: Ranking Economics Departments by Fields of Expertise,” Therese C. Grijalva and Clifford Nowell, Southern Economic Journal, 74 (2008), 971-996]. In three of the 17 fields studied, UConn ranked within the top 20 programs:

4th in Law and Economics (after Berkeley, Harvard, and Vanderbilt);

12th in Urban, Rural, and Regional Economics (after U.Illinois-Chicago, Harvard, Syracuse, MIT, BC, Berkeley, FSU, Georgia State, Wayne State, Princeton, and UCSD); and

15th in Agricultural and Natural Resource Economics (after Iowa State, NC State, Wyoming, Harvard, Yale, UCSB, MIT, URI, Georgetown, SUNY Binghamton, Stanford, Colorado, Utah State, and RPI).

To read the entire article, click here.

From CLAS in the news:

Michelle Prairie, a Presidential Scholar from Vernon, Conn., with a perfect 4.0 grade average, will spend the next two years in the United Kingdom studying for two master’s degrees in development economics.

She is the only student at a public institution in New England selected as a Marshall Scholar for 2009. The other New England winners were four students from the Massachusetts Institute of Technology, three from Harvard, two from Boston College, and one each from Princeton and Middlebury.

Prairie will study for one year each either at the University of Nottingham and the London School of Economics and Political Science, or at the University of Warwick and the School of Advanced Study of the University of London.

She plans to become a professor of development economics, focusing her research on income inequality, particularly in Latin America, and on the effects of trade, aid, and government policies on the distribution of wealth. Eventually she hopes to be a policy analyst for the United Nations, the World Bank, or the U.S. government.

Prairie, who was valedictorian of her senior class at Rockville High School, entered UConn hoping to study international business. In her second semester she took an economics course and “something just clicked,” she recalls. She became an economics major in CLAS, where she has interned for the Connecticut Center for Economic Analysis and for Associate Professor Susan Randolph (IDEAS), whose research focuses on development economics.

President Michael J. Hogan, whose letter of endorsement capped Prairie’s application to the Marshall committee, called her “thoughtful, astute, and very articulate.”

“Few students get as excited about economic theory and analysis as Michelle,” he wrote.

Prairie’s interest in development economics was born on a trip to Brazil with her church group when she was in high school.

She played soccer with 16-yearold Brazilians who had no shoes, she recalls. Riding on a bus from the airport through the outskirts of Sao Paulo, she was shocked by the stacked-up shanties on the mountainsides.

At UConn she found opportunities for study abroad in Sweden, where she observed the welfare state, and, through the campus Christian group, Reformed University Fellowship, in Peru, where she taught English as a volunteer and assisted a fledgling microfinance program.

“This is when I knew for certain that I wanted to become a development economist,” she wrote in her Marshall application. “I had found a way to serve the poor by using my passion for economic theory.”

She was reluctant at first to apply for a Marshall, questioning her chances among so many qualified applicants.

“In my mind, she had what it takes. She was a winner. She just needed to feel it,” says Jill R. Deans, director of the office of National Scholarships at UConn.

Deans arranged several mock interviews to prepare Michelle. Among the interviewers were history professor Christopher Clark, chair of the campus Marshall Scholarship nominating committee, and Sandra E. Shumway, adjunct professor in residence of Marine Sciences, who was herself a Marshall Scholar.

Prairie interns at the Travelers Insurance Company in the market research division. As a senior, she won the Travelers Insurance Company Scholarship, the top undergraduate award in the Economics Department.

Her mother, Ellen Prairie, works in the One-Card Office at Wilbur Cross, and her father, Robert Prairie, is a 1981 UConn alumnus in mechanical engineering technology.

“My whole four years at UConn, I could never have foreseen half of the things I’m doing now. I’m so appreciative to UConn for giving me these opportunities,” says Michelle.

She is UConn’s second student to win a prestigious Marshall scholarship, named for America’s first five-star Army general, George C. Marshall. In 1947, as President Harry Truman’s secretary of state, he proposed American economic assistance to post-war Europe.
UConn’s first Marshall Scholar, Virginia DeJohn Anderson, CLAS ’76, is now a professor of history at the University of Colorado. As an undergraduate at UConn she was advised by Board of Trustees Distinguished Professor of History Richard Brown.