The United States Graduates roughly 300 PHD's in probability and statistics per year of which about 100 go to Industry. Anecdotally, most of these are in finance. Most of the other branches of Mathematics contribute 1/3 to 1/10 their population to the industrial community. And I know from personal experience that is the experience of one of the students in our department that went that route that the salaries in finance are two to three times what one can expect for a comparable position elsewhere in the economy. I wish I had detailed Statistical Data on this but I don't. Interestingly the AMS survey leaves out a breakdown of Salaries by Employer type. However they have remarked that salaries for teaching and research have not yet reached there 1970 levels in real dollars in general. The obscene level of compensation banking and money managers pay themselves and their significant employees results in a very significant brain drain from the rest of the scientific and perhaps industrial establishment. Probabalists and Statisticians are especially important in devising real world applied models of every day phenomena and devising adequate tests of these models. It is quite probable that the sophisticated trading models constructed whatever their validity constitute a serious waste of technical manpower for the country.
While this may put a Goldman Sachs, or a Citibank at a Competitive Advantage on the derivaties market relative to their European Counterparts at least at normal times , the net effect of all of this brain drain is an impoverishment of the entire real scientific and industrial community.
While I cannot prove it at present I would argue that Financial Misallocation of Resources and a relatively loose labor market, coupled with the weak social safety net in the US is the major reasons for the past lagging productivity increases in the US economy, if I was an economist, I think I would have fun attempting "validate" this thesis.
--mike
-- Michael Cohen mike at cns.bu.edu Work: 677 Beacon, Street, Rm313 Boston, Mass 02115 Home: 25 Stearns Rd, #3 Brookline, Mass 02146 Tel-Work: 617-353-9484 Tel-Home:617-734-8828 Tel-FAX:617-353-7755