Tuesday, March 3, 2009

The sorry state of the PhD labor market

It is not a good year to go on the job market for US Economics PhDs. Most state schools are not hiring, and the financial sector is dead. Regarding private schools, those with larger endowments are still hiring, though moderately. Those with smaller endowments are scared to hire as they do not know yet how many students will show up in the Fall.

Bad years can happen, the question is what comes next. I have the strong suspicion that there will be many last minute visiting positions, especially among the smaller private schools. Those positions, if they happen, may convert to tenure-track next year. State schools will, however, not hire next year, even if the economy improves. Next year's cohort of PhDs will join this year's backlog chasing few positions. The excess supply of PhDs will persist for several years, as we have seen after the previous recessions.

There is little prospect of significant absorption of the excess supply abroad. The only hope is the government sector, which is supposed to increase its regulatory oversight and plenty of projects to launch. This could also mean more jobs with consultants, but those have not materialized yet.


Anonymous said...

If one had a Ph.D. in economics, they would know that the current economic situation that exist in the United States isn't a recession. The only only thing Ph.D.'s will have achieved is having some very expensive wall paper framed and hanging in their homes.

Danny L. McDaniel
Lafayette, Indiana

Anonymous said...

I strongly disagree. If anything, the IMF and other international organizations are hiring as they never have. It is true that some economics departments will be facing stringent budget constraints, but that will not be the case of the top 100 who rely on their reputation and whose endowment is large enough to endure these shocks.

Excess supply? I do not believe in excess supply without some price adjusting downwards. As I see I know of only two economics departments that may have done something like that, none of them Ivy-League. Wages are still high enough to make it a good investment. As I see it, I will personally apply to grad school next year!