Arnold Kling  

True Scarcity?

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Apparently, there is a scarcity of economics professors. According to the Wall Street Journal,


According to the Bureau of Labor Statistics, salaries for economics teachers, a category that includes professors, averaged nearly $140,000 a year -- based on a 52-week year -- in 2003, making it one of the highest-paid professions that the government tracks. But at the elite colleges, economics professors can earn substantially more, with some senior faculty commanding $150,000 to $250,000 for nine months' work. Other forms of compensation such as housing subsidies and signing bonuses can be used to bolster pay packages. Superstars, such as Nobel Prize winners, can earn in excess of $300,000.

...But while demand for academic economists has grown, supply hasn't. According to the National Science Foundation, U.S. universities churned out 1,051 Ph.D. economists in 2003, the last year for which figures are available. The number has held roughly steady for a decade.


It would seem to me that 1000 Ph.D's is plenty, relative to the number of openings. I wonder what would happen if an economics department chairperson decided to play "moneyball," trying to maximize some objective measure of quality of research within a tight budget constraint. My guess is that you would end up with faculty who are bit older and more narrowly specialized than the folks who are being heavily recruited.

For Discussion. What is the scarce resource that is causing the price of economics professors to rise?


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CATEGORIES: Economic Education



COMMENTS (7 to date)
Rob writes:

What is the scarce resource that is causing the price of economics professors to rise?

Interest in the subject ;)

James writes:
What is the scarce resource that is causing the price of economics professors to rise?

Intelligent administrators?

jaimito writes:

At last economy teachers can answer the question "If you are so smart, why is that you are not rich?"

spencer writes:

The supply is limited by the number of Ph.D. programs and the number of degrees each program produces. If the profession acts to limit the number of schools granting PhDs it is acting as a very good monopoly supplier.

Bob writes:

By definition, the top few economists are a scarce resource. There is no shortage of generic econ Ph.Ds. Salaries rise across the board because the those who want to be viewed as top schools/departments bid up the stars and the rest of the scale follows. What is the constituency for lower salaries? The english professors don't argue that economists should be paid less, just that english profs should be paid more.

Lawrance George Lux writes:
What is the scarce resource that is causing the price of economics professors to rise?

The next Authoritarian publication which increases Student enrollment in the area of Economics. What is the impact of a Nobel Prize winner on Enrollment, especially if cutting edge? lgl

Jack P writes:

Bob is right, the WSJ is wrong. Demand for the handful of hotshots is always strong, but for the other 95%+ of us (I'm a PhD candidate) you take what you can get, and median salaries (as opposed to mean) are decent but hardly increasing more than cost of life.

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