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Friday, August 08, 2003

The Future I Don't Look Forward To

If it is true that people are only happy relative to others, then this (subscription) article from the Economist should make Invisible Adjunct feel a little better:

"ECONOMICS", observed J.K. Galbraith, "is extremely useful as a form of employment for economists." In the United States, plenty hope so. Applications to the PhD programmes of many leading American universities have risen sharply: those at MIT were up by 15% for 2002-03; those for the coming academic year at New York University, which has energetically been recruiting star professors, are 70% higher than for 2000-01. Americans account for most of the increase, reversing a long-term decline in their interest.

It may be that economics PhDs, which take longer than MBAs, are a welcome shelter from the difficulties of the real economy. But for Americans now gaining doctorates, prospects are bleak. In 2002, the number of job openings for economists tallied by the American Economic Association (AEA) fell by 10%, the second decline running. Graduate-student membership of the AEA, a measure of the future supply of economists, rose by 14% (see chart). Robert Schwab, dean of the University of Maryland's economics department, says that last year was "very difficult" and that this year is expected to be "horrible".

A prime reason is that universities are short of money. Most economics PhDs go on to teach, yet states' spending cuts have choked off job opportunities: the University of California's income from the state is expected to be $248m lower in the year that began on July 1st than it was in 2002-03. Some are finding jobs at business schools, the World Bank, the International Monetary Fund or in government. Businesses take a few: Daniel Hamermesh, of the University of Texas, says that consultancies, under pressure to provide fancier technical analysis, have been hiring more PhDs in recent years. But now times are bad, demand has waned. Hiring by Wall Street banks has also dried up.

To be selfish, I'm only getting a Master's degree, but this can't be good. Let's hope the market picks up by next year, or that I can get a decent job (with work permit attached) on this side of the pond.