David R. Henderson  

The Economics of an Economics Ph.D.

Why I Fear a One-Party State... Making Capital Disappear...

On this blog last month, my fellow blogger Arnold Kling wrote:

Then consider the Internet. For an autodidact, this is a golden age. For going to graduate school, not so much.

I agree with Arnold totally on the first. When my students graduate with an MBA and some of them express interest in getting a Ph.D. in economics but are "stuck" in the military for the next few years, I tell them to keep up the learning by going to Bryan Caplan's web site and working their way through some of his courses. His lecture notes are awesome. (Try this, for example.) I tell them to do all the problem sets and not "cheat" by looking at the answers until they have really worked the set in not one, but two sessions.

I agree with Arnold on his second point also, but only literally. It's not a golden age for getting a Ph.D. in economics, but it's still a pretty good age. Take a look at Walter Block's article on this issue last June. Here are two key paragraphs:

Gary North, Ph.D., (emphasis, mine) continues with his pessimistic outlook claiming that new assistant professors are typically given large classrooms, which do not usually allow them to do the research necessary for acquiring tenure. So they are let go after six years (not eight, as per North), and then confined to the swamps of community colleges, there to earn that proverbial "$10 to $15 an hour."
Well, let's see. According to this source, the average salary for a community college faculty member ... nationally ... was $53,934. Round this up to $54,000 (hey, give me a break, I'm trying to make a point here). Assume that the professor teaches 5 courses of 3 hours each for 30 weeks a year (yes, these people get long vacations too). That amounts to 450 hours per year (we ignore publishing requirements, committee meetings, marking essays, since there are virtually none in this sector of academia), or $120 per hour, roughly 10 times North's estimate of "$10 to $15 an hour." I wonder at the source of his calculations.

I think that Walter exaggerated substantially, as I noted to him in an e-mail. He's left out preparation, grading, and office hours. Those three together can easily drive the 450 hours to 1,200 hours for the first few years. That would then drop the hourly rate to $45. But that's still not bad if you're doing something you like or even love. Moreover, as you teach more, the prep time falls so that the long-run equilibrium time for prep, teaching, grading, and office hours probably falls to 1,000 or so. That's $55 an hour. And remember that you have a lot of say over how you teach and what you teach. Moreover, it can allow you to be a performer in class. I know a lot of actors who get paid less than $55 an hour--and they're spouting someone else's lines.

Then with the rest of the time you can free-lance write, speak, or consult. And remember that this was the worst case, the case in which you teach at a community college.

As I told Walter in an e-mail:

I will give this article to future students who are wondering about whether to get a Ph.D. in econ. Oh, and there was a lot of love in that article for young people. You're a sweetheart, Walter.

Comments and Sharing

CATEGORIES: Economic Education

COMMENTS (9 to date)
Blackadder writes:

Wouldn't the worst case be not teaching anywhere?

Jack writes:

Obviously, teaching and doing research are fun for the first few hours, but then it becomes work. The usual diminishing marginal utility story. The workload in good (not top) research universities is 70 hrs a week, or about 3500 hrs a year assuming 2 weeks holidays, which implies $24.28/hr given an annual salary of $85,000. This is decent money because at least some of those work hours are fun, but it is hardly an overpaid position.

Arnold Kling writes:

If you go into teaching, you have almost no control over where you live. When I was on the job market, the only teaching positions available were in locations where my fiance (now my wife) would not have joined me.

There is also a very high probability that you will have to move "down market" in terms of student quality. That is, the quality of students at the place that you are hired will be much lower than the quality of students at the institution granting you the Ph.D. Teaching low-quality students is not fun.

Les writes:

When I read about time requirements of 3,500 hours a year it is hard to believe.

Even at top schools one should comfortably be able to publish rather than perish at 2,000 hours a year (40 hours per week, 50 weeks a year, including teaching summer school).

Dave writes:

"Teaching low quality students is not fun" Thanks for that comment, you made my day - from an adjunct at a Northeastern school known for its sports teams. I got a JD instead of my PhD so at least have a day job in addition to my teaching job. I love teaching, but sometimes wish more of my students actually gave a crap about what we were reading - you know just some fluff - Supreme Court Cases, Magna Carta etc

Bill Woolsey writes:

The "worst case" is adjunct work. Maybe $3000 per class. If you can get "full time" work--5 classes a semester, then that is $30,000 per year. No beneifts. No research or commitee work required.

Community College is like being a public school teacher in terms of pay and benefits. All lower level undergraduate classes. Research? If that is your hobby. Generally, a masters degree is enough, too.

And then, there are teaching oriented undergraduate institutions. Probably a good bit of basic classes to noneconomics majors, but some upper level courses, probably small. Usually, some research requirement, but not much. I think you need to like explaining basic economics for this to be a good life. Most in this situation like spending time in class. Grading is hell.

Lots of professors who aren't tenured at research schools because not enough articles or not in sufficiently good journals end up having careers in teaching oriented schools where "unacceptable" research is more than good enough.

I am surprised that North is so far out of it as to think communitiy college is the alternative to research universities.

Zac Gochenour writes:

David- thanks for this, additional motiviation is always welcomed for those of us with academic aspirations

@Jack 70 hrs a week? 50 weeks a year? For economics? Eh.. I'm not an academic but I think David is much closer to reality when he says 1200 hours a year. Professors get more than 2 weeks off just for Christmas.

@Arnold- You say "teaching low quality students is not fun." So if you teach at a school with lower quality students than at the one you got your PhD, teaching economics is not fun anymore?

So it would not be fun to teach at GMU? After all, the students there are "low quality," on average, compared to MIT where you got your PhD. In fact, even the students at say the University of Virginia are low quality compared to MIT. But let's say UVA's your threshold, beneath which students are too low quality to be fun to teach. Teaching at GMU must be no fun at all because of the low quality of students there. Bryan, a graduate of Berkeley and Princeton, must hate both life and job. Each day teaching the students there must be a chore, and they could never have a real interest in or understanding of economics.

And its a good thing the school has come a long ways since the 80s, when the student quality was even lower. Heck, they even let Tyler Cowen (BS 1983) graduate!

The perceived "quality" of your students has a lot to do with your teaching style and skill. GMU is a mediocre school in terms of high school GPAs or SAT scores of incoming students that is fortunate enough to have good teachers in economics, and therefore economics generates a lot of interest, and even produces students who go on to elite schools and do interesting research.

Maybe you say students at GMU are still too smart to be considered "low quality," especially since it at least has a notable PhD program, and you are actually talking about small, 4th-tier schools off the beaten path that no one has ever heard of, like Longwood University (located in Farmville, VA). Or maybe you are talking about community college. But I know students in both CC and at Longwood, and they are of average intelligence; they can read, write, and at least know algebra and geometry. If a person couldn't teach undergraduate economics to these students in a way that is enjoyable for him and the students can comprehend, then he does not understand economics or he does not have passion for it.

Chad Van Schoelandt writes:

I suspect that North's articles should be considered more broadly, as it may depend a lot upon the field of study. As North says, "Anyone seeking a degree in philosophy was almost doomed to failure, yet the Ph.D. degree took on average over a decade beyond the B.A. to earn," and Bryan has indicated that the time in a Ph.D. program and alternative job prospects are very different in economics.

Jack writes:

@Zac & Les: I speak from experience. Yes, 70 hrs a week (at least tenure-track), and yes, 2 weeks off a year. That school's out four months out of the year is beside the point. Research continues full-time during the summer, and many faculty continue to write even during holidays. Teaching is only about 25% of the work anyway.

If the 3500 hr figure is unbelievable to you, try 2500 hr a year, giving an upper bound of $34/hr. The point is, regular faculty are not overpaid.

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