Assorted Thoughts on the Market for New Econ PhDs

by on December 11, 2013 at 12:25 pm in Data Source, Economics, Education | Permalink

Here’s the good news. There were 1,243 new econ PhDs in 2012 and the AEA has 2,790 job listings. Compared to other fields where quantity supplied far outstrips quantity demanded, econ is doing very well.

Why are there fewer PhDs than jobs? One factor may be that women are underrepresented in economics. Women earn 34% of the PhDs in economics which is below the 46% of doctoral degrees earned by women overall. (On the other hand, economics is more gender-balanced than psychology where 72 percent of all degrees are earned by women). If women earned more degrees in economics would total degrees increase? Perhaps, although that hasn’t happened in medicine where the cartel has limited total physician supply.

What about the bad news? The number of new jobs for econ PhDs fell by 4.3%. The fall was especially pronounced in academia where the number of new jobs fell by 6.6%. New jobs tumbled in 2008 and since that time there has been some recovery but no catch-up. Are we seeing the transition to a new equilibrium?

On the university side, Clay Christensen’s prediction that half of all universities may go bankrupt in the next 15 years is not yet showing up in the data. Should I file that under good news or bad news?

farmer December 11, 2013 at 12:46 pm

does “adjunct position with NO HOPE, EVER, of getting tenure and a de facto paycap of 32k” count as a “job”?

Phill December 11, 2013 at 1:24 pm

Not be the one promoting sinecures, but of all the spending increase in universities I’m kind of really surprised almost none of it goes to lowering class sizes. In fact, if anything it’s really surprising that the highly educated professional class whose labour the whole system revolves around have not been able to capture more of the surplus.

Or are the spoils mostly distributed towards incumbents?

Or do we just have a massive surge in academics? Anecdotally, I keep meeting lots of grad students.

Nathan Whitehead December 11, 2013 at 2:16 pm

Smaller class sizes is one of those things that seems obviously good but turns out to not really matter much. It’s more efficient to have huge lectures and smaller tutorial sections, then use technology such as clickers and peer instruction in the big class. Like any other industry, universities continually push for increased efficiency. Students care much more about gyms and architecture than class size, so that’s where the money goes.

David December 11, 2013 at 3:10 pm

{Citation Needed}

mulp December 11, 2013 at 3:33 pm

Just heard on NPR a story on Thune of udacity abandoning moocs because the side by side test of the lecture-discussion to mooc resulted in 71% passing the lecture-discussion based course and only 51% of the mooc.

Thune supposedly blamed the students – they were too poor and unprepared to be students, something self selected because the mooc course was dramatically cheaper tuition than the lecture-discussion course tuition.

The interviewee, a professor argued moocs are just correspondence courses that have been sold for centuries – making a teaching model that mostly fails cheaper doesn’t make it more successful.

Mark Thorson December 12, 2013 at 12:38 am

But if there are 10,000 students in your MOOC course, aren’t you way ahead of the game? Percentages might be the wrong way to evaluate the success of a MOOC course.

prior_approval December 11, 2013 at 1:25 pm

Of course – average being over, those who aren’t stars just need to get used to their lot. Apparently, there is a real future for servants though. And who knows, that may actually be an improvement over being an exploited cog in the academic star machine – especially considering that one has to pay a signficant chunk of change to be able to even be in the position to be an exploited cog.

JWatts December 11, 2013 at 1:57 pm

“does “adjunct position with NO HOPE, EVER, of getting tenure and a de facto paycap of 32k” count as a “job”?”

First world problems.

Nick_L December 11, 2013 at 2:19 pm

“Oh, and have you met my butler – he has a PhD in economics. I mostly leave the household budget up to him – as long as the house AI agrees with what he’s doing..”

dave smith December 11, 2013 at 3:04 pm

This made me laugh.

farmer December 11, 2013 at 2:25 pm

does 32k in BOS/NYC/DC/SF even count as first world? not joking, either

Cliff December 11, 2013 at 3:21 pm

Yes, it does

Ryan Vann December 11, 2013 at 4:55 pm

Sure, you are just in the second quintile. Good luck with that.

dc red dogs December 11, 2013 at 11:17 pm

Could you clarify if your recourse to the trite phrase first world problems signals a lack of compassion on your part for certain people, most of whom will be dead in fifty or sixty years or so after great suffering, because they live in a part of the world to which you feel superior? Or are you a well-meaning soul who declines to show compassion for people with one set of problems because other people suffer from another set of problems which overwhelm your capacity for empathy? Or are you signaling some other pattern of thought which lacks the lack of empathy and compassion I believe you suffer from?

JWatts December 12, 2013 at 12:20 am

Hmm, I’m going with rampant motive speculation combined with strong mood affiliation on your part. I’ll let my original comment stand on its own.

dc red dogs December 12, 2013 at 12:25 am

JC Watts – chances are if you go with that you will miss the opportunity to understand what you are trying to talk about. Compassion, empathy, or something less? Be a man and face up to facts.

Norman Pfyster December 12, 2013 at 10:10 am

I’m pretty sure it’s a way of saying a certain so-called “problem” not really a problem in the grand scheme of things.

Norman Pfyster December 12, 2013 at 10:14 am

As a (former) adjunct instructor, yes, it counted as a job. Not a great one, which is why I switched careers (that, and I hated teaching).

orinrpx777 December 12, 2013 at 5:04 pm

as Troy said I’m impressed that anybody can earn $4562 in 1 month on the computer. Learn More Here…… Tec202. COM

Amy December 11, 2013 at 1:11 pm

Clearly the AEA needs to charge employers more to post a job.

Rahul December 11, 2013 at 2:26 pm

Are all AEA job listings for fresh PhD’s?

Fresh meat isn’t the only item in quantity supplied?

Ricardo December 11, 2013 at 2:49 pm

You’re hired!

RM December 11, 2013 at 1:48 pm

He said that half “may” go bankrupt. But even “may” is an overreach.

Alex Tabarrok December 11, 2013 at 1:59 pm

corrected.

mulp December 11, 2013 at 3:38 pm

udacity’s thune claimed moocs would reduce the number of universities to 10.

Tom Friedman has been claiming moocs would totally take over and dramatically lower education costs.

udacity has abandoned college education via moocs in favor of employee training, blaming the poor quality of students who pick moocs because they are cheaper.

FC December 11, 2013 at 4:48 pm

If society stopped being obsessed with credentials, almost everyone would abandon college education.

dearieme December 11, 2013 at 2:40 pm

A friend of mine, aged ca 82, says that the Golden Age for university teachers was his period. Since then it’s been downhill, to the extent of becoming a mug’s game. It’s absurd, he argues, that people do better by not being intellectually curious. In fact, by not being intellectuals at all.

Gary S December 11, 2013 at 3:12 pm

This is obviously “a job Americans won’t do” and there’s a dire shortage. Cheap labor lobbies – fire up the temporary work visa lobbyists and campaign contributions!

Bruno December 11, 2013 at 4:38 pm

Hows it goin fieking bietches. Are you ready to get FIEKED like a fieking Philly cheeseSTAKE?!?! When you FAIL your job market, I will pop a bottle of SHAMPAIGN to celebrate!! Fieking job market dead meat

dontbelieve December 11, 2013 at 8:03 pm

I know who you are! I can’t believe you’d post here!

Ryan Vann December 11, 2013 at 4:50 pm

“One factor may be that women are underrepresented in economics. Women earn 34% of the PhDs in economics which is below the 46% of doctoral degrees earned by women overall”

“If women earned more degrees in economics would total degrees increase? Perhaps, although that hasn’t happened in medicine where the cartel has limited total physician supply.”

Wot?

GiT December 11, 2013 at 7:52 pm

Is the addition of women more zero sum or positive sum?

Alan December 12, 2013 at 2:35 am

Once the proportion of women Ph.D. economists in the private sector passes about 50%, economics will be perceived as trivial and unimportant.

AIG December 11, 2013 at 6:59 pm

Clayton Christensen is surprisingly wrong, for a strategy professor (who should at least consider…shifts in strategy)

sch December 11, 2013 at 7:25 pm

Regarding the “cartel” in medical training, there have been widely fluctuating estimates of the appropriate # of MD. From fears of a glut in the ’80s, it drifted toward
some concern over inadequate numbers of MD/DO in the late ’90s and since the concern has increased. Oddly the feds, in the guise of CMS, have a great deal
to do with subsidizing residency positions as they have paid more to training hospitals where residents are educated than to hospitals without residents. This increment
meant hospitals could afford to pay residents $40-60k/yr while in training. CMS limited the extra funds such that the resident positions were effectively capped. It “costs”
several $100K to support the extra work that residents cause and to pay for their faculty supervisors so limiting extra payments by CMS does cap the residency #s.
Since there have been more residency positions historically than MD/DO graduates, this has been made up by FMG trainees and only recently become a problem due to
the increased # of MD grads over the past 20 years. Currently the # of residency slots approximates the # of US grads. CMS is aware of this and pondering its response.
Since hospital revenue is more likely to decrease under the ACA, absent an increase in CMS funding, there will be even fewer residency slots over the next decade.
Interestingly new DO schools have been developing, but typically these are in smaller towns and are not associated with teaching hospitals, unlike new medical schools
which are always affiliated with large teaching hospitals. Finally the female/male ratio of medical students is around 50-50, which has implications for the effective MD
supply as generally speaking female MD have shorter careers and working hours than male MD.

freethinker December 11, 2013 at 8:55 pm

If only half of the universities and colleges in India go out of business in the next 15 years! Unfortunately, no state funded university or college will go bankrupt in India even in the next 50 years. Moreover, none of the useless programmes in Indian universities, like philosophy, history and literature, will be shut down. These teachers tell their own kids not to study ( even as a hobby) the subjects they teach, but become hysterical at the suggestion that their departments should be shut down.

Sergeant Tomato December 12, 2013 at 1:06 am

Which government regulations limit the supply of MDs?

Jay_Huhman December 17, 2013 at 12:01 am

In addition to graduation from medical school and passing the USMLEs, a residency must be completed. The number of residency positions is effectively capped by the number paid for by Uncle Sam.

Floplo December 12, 2013 at 3:00 am

Is the new equilibrium called ‘econjobmarket.org’ ?

It would be interesting to see whether that drop is coming from less US or less international universities ? My guess is that this year it’s foreign places dropping JOE ads, however some will just use econjobmarket.org instead,

NK December 12, 2013 at 3:14 am

Not bad for a voodoo science!

whatsthat December 12, 2013 at 12:35 pm

Hang on. These numbers are likely incorrect. There are only 300 postings on the December Job Openings for Economists: agreed not every job is posted here, but most are. Many of these are simply repeats of earlier months postings. Since PhD cohorts are all looking for a job around the same time (Jan – April of the year they graduate), the double counting matters. I struggle to believe there are more than 500 – 600 jobs that will utilize a phd properly, which means supply > demand.

You only have to figure that every student about to graduate sends out between 150 – 200 applications, in the hope of getting maybe 20 – 25 interviews (at the very best schools, as the rankings fall, so do the number of interviews) and maybe 2 – 3 offers. This hardly looks like a job surplus application strategy!

mkt December 12, 2013 at 1:38 pm

That’s a good point; the Inside Higher Ed article doesn’t provide a link or citation for its source, although it claims that the data came from the AEA.

A brief google search didn’t turn up summary statistics, although this 2002 paper on the website says there were 1,589 new job listings in 2001, and 1,635 in 2000. 2,790 in 2012 means about 75% growth in 11-12 years; seems high but not impossible.
http://www.aeaweb.org/joe/articles/2002/2002-09-cawley.pdf

Paul December 12, 2013 at 2:30 pm

So where is this survey data? I cannot find it on the AEA website, or via a search.

ann dela cruz December 13, 2013 at 1:25 pm

I don’t think being econ PhD students or graduates will ever be bad news. My friends and cousins who took economics have stable jobs. They are really intelligent and interesting. Econ PhD will always stay relevant particularly that first world countries suffer from economic crisis. Who are the experts on this field? Econ graduates especially those with PhD.

I am an essay writer at http://essayjedi.com/ which provides essay writing services to students. Sometimes when I write economic-related essays, I always approach friends and cousins with degree in Econ.

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