New York Times
April 11, 1999
A Doctorate Too Dry for Its Own Good?
By LOUIS UCHITELLE
The Depression inspired thousands of young people to become economists. The War on Poverty and the Great Society in the 1960s were similarly inspiring, and the upheavals today should be, too. What more noble work, after all, than coming to understand, and perhaps alleviate, the wage stagnation, the global pressures, the layoffs, the job insecurities and the long working days that weigh on so many people.
But, in fact, fewer and fewer Americans are entering graduate programs and seeking careers in economics.
The Depression made a hero of John Maynard Keynes, the British economist whose prescriptions for reviving the economy -- and softening capitalism -- seemed so promising and insightful, even romantic. And out of the crowded graduate schools of that era came future giants like Paul Samuelson, Milton Friedman, James Tobin and John Kenneth Galbraith. They are all in their 80s and 90s now, and no longer the role models they were in their heyday.
Who are today's heroes? Alan Greenspan, the Federal Reserve chairman so often given credit for the current prosperity, is one. So are Lawrence H. Summers, the combative deputy Treasury secretary and former Harvard whiz, and Paul Krugman, the Massachusetts Institute of Technology professor whose fame comes as much from his vivid, prolific writing in newspapers and magazines as it does from his economics. But somehow, they aren't Pied Pipers.
Is it them or the times? Could Keynes do any better if he were resurrected today? Or Adam Smith, who was a popular lecturer and teacher with a wide following? Probably not. The profession is so changed.
The Ph.D. program in economics today, combining a master's degree and a doctorate, calls for five to seven years of hard, technical work, harder perhaps than medical school. For bright young people, higher wages with much less study can be had in management, or consulting, or law, or on Wall Street.
"I have a son who went to work right out of Harvard as a currency trader," said Angus S. Deaton, a Princeton economist and a mentor in his profession.
High wages, of course, would not divert a young idealist seeking to help the world through economics. But the graduate school training in economics, with its heavy emphasis on mathematics and mathematical modeling of abstract situations, does not relate easily to the issues of the day. The idealist, in sum, is too often put off.
A commission of august economists recognized this shortcoming in a 1991 report. It recommended more attention to "real-world linkages" -- a bit of advice that graduate schools have so far largely ignored.
"There is something about the nature of economics training that is driving off the student," said economics historian Mark Blaug in a recent interview. "The training is technically demanding but does not seem to be related to anything out there."
The shortage of trained economists is still unfolding. More than 1,000 Ph.D.'s in economics are now granted annually in the United States, a 17 percent increase from 1986. But that is because, until recently, foreign students enrolled in large-enough numbers to more than offset the American decline. No longer: The number of new doctorates will begin to slip next year or the year after, because new enrollment in graduate programs has been falling since 1994.
And this despite the fact that economists are well paid in their first posts relative to other Ph.D's. The median starting salary was close to $75,000 for economics Ph.D.'s who took private-sector jobs last year, here and abroad, and roughly $50,000 for those who took academic posts, mainly as assistant professors. Only engineers are in the same ballpark.
These findings are laid out in a soon-to-be published article in the Journal of Economic Perspectives. The authors, John J. Siegfried of Vanderbilt University and Wendy Stock of Kansas State University, surveyed new Ph.D.'s at 91 universities.
But for economists who take private-sector jobs, money isn't everything. The typical graduate, 32 and married, spent 6.8 years in graduate school, only to land in a job that often underutilizes those hard-won skills. "They get paid a lot more than in academia, but they are grumpy," Siegfried said.
Americans, who now make up less than 45 percent of each year's graduating class, find the going tougher than foreign students do. The latter often have better preparation in the all-important math, and the prestige of an American doctorate opens all sorts of doors for them back home. The Americans find their training useful mainly in teaching and research, and academia has cut the number of these jobs that lead to tenure.
"People who 20 years ago might have chosen economics are now choosing law," said George Akerlof, an academic economist and a senior fellow at the Brookings Institution. "One reason they are doing this: Economics has become a lot harder."
But in that direction might lie a solution, or a partial one. Economics, practical, nonmathematical economics, is increasingly practiced by lawyers and by people trained at graduate business schools or at public policy institutes -- training that belongs in the graduate schools that "license" economists.