phd in economics is it worth it

Is an economics PhD still a great deal?

Yes, but for different reasons than a decade ago..

My most popular post at my old blog, back in 2013, was called “ If you get a PhD, get an economics PhD ”. People still ask me about it to this day. In that post, I categorized PhD’s into three types:

Lifestyle PhDs , in which you get to think about fun stuff and exist in a stimulating intellectual community, but probably will struggle to find a job in your field,

Lab science PhDs , in which you will get a job after years of busting your butt working for a P.I. at a lab bench or in a cleanroom, and

PhDs that work , i.e. programs that get you both good job opportunities, intellectual fulfillment, and the lifestyle of an independent scholar.

Econ, I argued, was the paradigmatic example of the third type. As it’s mostly not a grant-funded lab science, PhD students get relative autonomy — a chance to think their own thoughts and set their own schedules. But because there are so many good job opportunities in econ — professorships, business school professorships, private sector econ jobs galore — you can largely do your own thing and be assured of a glide path to the upper middle class. And because economists occupy (or at least, occupied) a rather unique place in society, you can do all of this while still being afforded the respect given to the sages of the ivory tower. Thus, I argued, econ was the PhD that offered the best of all possible worlds.

To a large extent, that is still true. Econ still offers a good amount of personal and intellectual autonomy, despite a modest rise in grant funding and postdocs and the other trappings of lab science. There are still more academic jobs than for many other fields, thanks to the continued growth of business schools . And though economists are perhaps not viewed as the all-purpose sages they used to be, they are still afforded quite a bit of respect. Furthermore, the culture of econ is changing in ways that greatly mitigate the traditional downsides. In fact, overall I’d say that the economics PhD is an even better deal than it used to be.

Here are a few ways I see the landscape as having shifted in the decade since I got my degree.

The rise of data science

One of the most important trends over the past decade has been the emergence of data science as a highly lucrative and accessible field for people with PhDs. This field is red-hot — data scientists are some of the best-paid workers in industry, and demand for them continues to grow . This is being driven by a number of trends, but basically there are two stories here. First, the internet has generated a huge amount of data, and companies need people to wrangle that data and extract value from it. Second, deep learning turned out to basically be magic for many applications.

For economists, the first of these is more relevant. Yes, after a while in data science you might get into deep learning, but it’s not something that economists necessarily start out as specialists in; if that’s your goal you’re probably better off just going through computer science. Economists’ core strength is in statistical modeling; thanks in part to the empirical turn in the profession since the 1990s, people with econ PhDs are some of the better applied statisticians out there. So they’re a perfect fit for plenty of data science jobs that even Masters-level people can’t really do.

In fact, it’s extremely easy to transition from econ into the world of data science. You can just apply for jobs directly, or you can go through a boot camp like Insight that will quickly teach you the extra stuff you need to know. A good friend of mine from grad school decided to do this after she left her professor job; she now makes three times what her peak salary as a prof would have been. Not bad. And while figuring out how to optimize Spotify recommendations or whatever might not be quite as intellectually stimulating as searching for the true causes of unemployment, it does present you with a bunch of interesting mathy problems to solve. And if you’re into that sort of thing, it’s an alternative gateway to a lucrative career in tech company management for people who didn’t go the software engineer route.

Data science may not be the first job of choice for economists who want to do real econ work, but it provides a very safe and lucrative outside option that barely existed a decade ago. (This has more than compensated for the winnowing of quant finance, and it’s also far less soul-crushing.)

The boom in private-sector econ jobs

Data science uses the stuff you learned in econometrics, but it isn’t really an econ job per se. Fortunately, a lot more companies are hiring economists to do actual economics. For a primer, read this 2018 paper by Susan Athey and Michael Luca (Athey is probably the second-most-famous private sector economist after Hal Varian, and is one of the profession’s true geniuses, so heed her advice).

Essentially their are two stories here. First, tech companies have created a whole lot of online marketplaces — Google Ads auctions, Amazon Marketplace, two-sided search markets for Uber and Lyft, and a whole lot of others. They need economists to figure out how these markets work, and — perhaps more importantly — how they should work. In a way, creating an idealized market from scratch could be more intellectually fulfilling than studying more “natural” markets; with the magic of software, an economist can create the kind of economic interactions that previously were just theoretical approximations!

The second trend is, as before, the empirical turn in econ. The credibility revolution has produced a generation of economists who are able to think very subtly and intelligently about how to isolate causality from natural experiments and policy experiments. That’s something that’s proving increasingly valuable to businesses, who have all too often led astray by correlations that turn out not to be structural. Whether it’s A/B testing, or causal inference for marketing, or just figuring out the determinants of demand, companies want economists who can help them empirically understand how their corner of the world really works.

The softening of econ culture

One other way that an econ PhD has become an even better deal is that the culture of the profession has become much less dominated by jerks. I can’t actually prove this to you, but young people can feel it . I can, however, describe roughly what has changed.

First, there has been a big backlash against sexism (and, to some degree, racism) in the profession. A series of academic papers exposed the field’s gender bias from a variety of angles — toxic online forums , discrimination in the credit for co-authorships, discrimination in the peer review process , and so on. A few high-profile sexual harassment scandals chastened the behavior of some top male economists. The people who run the profession — which, if you don’t know, is a very hierarchical profession — have made concrete moves to signal that sexism and racism aren’t allowed. One example is banning interviews in hotel rooms .

These are small in substantive terms, but they send a strong signal about what type of behavior and attitudes will result in economists getting shut out from plum jobs. There are still a few universities that specialize in hiring disgraced professors, but overall the “old boys’ club” of economics is on the way out.

The erosion of sexism dovetails with another big change in econ culture, which is the decline of bullying. There has been a concerted effort to push back on professors who try to destroy speakers in the seminar room; the era of “Well, this is really more of a comment than a question” is rapidly fading. I conjecture that this also has something to do with the empirical turn in economics — when theory isn’t disciplined by evidence, a loud-shouting bully might advance his ideas to the forefront of the profession by force of personality alone, but when you have to bring data, that kind of crap just doesn’t work.

Finally, economics has become more politically progressive . Whether this is a good thing or a bad thing obviously depends on your personal politics. But since most of the Americans who are considering a PhD are going to be progressive, the fact that econ isn’t an outlier in this regard probably makes the field more attractive.

Add up all these changes, and the result is that doing an econ PhD no longer means having to worry (or at least, not having to worry nearly as much) about navigating an entrenched old boys’ club of right-wing bullies. That’s a big plus!

The changing role of economists in American society

Better culture, more private-sector jobs, and lucrative outside options in data science — those are three major ways that an econ PhD is an even better deal than it was in 2012. But there’s at least one major way in which econ is less like a $20 that someone left lying on the ground. Economists’ intellectual prestige has dwindled a bit.

Back in the 2000s, at the height of the finance-driven Bush years, economists were viewed as sort of all-purpose sages. Americans were thrilled to read economists’ insights on everything from abortion to how to name your kids. Economists held pride of place among presidential advisors, determining the fate of nations — or just telling you where to get a bite to eat .

The financial crisis and the Great Recession brought that world crashing down, and that definitely diminished economists’ prestige a bit. Donald Trump was another factor — he famously had little use for economists, preferring instead to rely on his own clumsy bellowing and aggressive tariffs rather than the nostrums of some academic scribblers. The utter disregard for the free-trade consensus — perhaps the only thing economists agreed on at the time — was a major symbolic defeat for the profession, and one that Biden shows no intention of reversing . In fact, astute observers have noticed a diminished role for economists in the current administration as well.

One more factor, I think, was the shifting of America’s fault lines to non-economic issues — matters of history, of race and gender, of culture and nation. Those deep questions about the nature of our society make the quotidian matters of real estate portfolios and GDP numbers less central to our lives, and I think that made Americans less likely to ask economists for their advice about anything and everything.

So if you do get an econ PhD, don’t expect to walk around and have people view you as a sage. It’s a bit more like being a biologist now — you have your area of expertise, and most (but not all) people will acknowledge it, but if you go outside your field you’ll be considered an amateur.

Personally, I like that better, but your mileage may vary.

General warning about getting a PhD

So the econ PhD is still one of the best PhDs you can get. I’d put it up there with computer science and applied math, which share many of these advantages. But remember that doing any PhD is going to have some major drawbacks and challenges. As I wrote in my 2013 post:

[A]n econ PhD program is still a PhD program. That means, first of all, that you will be in poverty in your late 20s. That is not fun for most people (some "lifestyle PhD" students and bohemian artists excepted). Also, econ PhD programs force you to manage your own time, while giving you very little feedback about how well or badly you're actually doing. That can be stressful and depressing.

PhD programs famously put an enormous strain on the mental health of many students. Even those who come out of it just fine often remember it as a very difficult time in their lives. That’s obviously not true for everyone — some people remember their PhD programs as the best days of their lives. But it’s a risk you should be aware of.

But if you decide that a PhD program is right for you, then I think you could easily do worse than economics. The role of economists in society has changed in the last decade, but in most ways I’d say it’s even better than before.

Discussion about this post

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The Complete Guide to Getting Into an Economics Ph.D. Program

Math challenged? Never taken an econ class? Don't worry about it. There's hope for you yet.

Back in May, Noah wrote about the amazingly good deal that is the PhD in economics. Why? Because:

• You get a job.
• You get autonomy.
• You get intellectual fulfillment.
• The risk is low.
• Unlike an MBA, law, or medical degree, you don't have to worry about paying the sticker price for an econ PhD: After the first year, most schools will give you teaching assistant positions that will pay for the next several years of graduate study, and some schools will take care of your tuition and expenses even in the first year.

Of course, such a good deal won't last long now that the story is out, so you need to act fast! Since he wrote his post , Noah has received a large number of emails asking the obvious follow-up question: "How do I get into an econ PhD program?" And Miles has been asked the same thing many times by undergraduates and other students at the University of Michigan. So here, we present together our guide for how to break into the academic Elysium called Econ Ph.D. Land:

(Note: This guide is mainly directed toward native English speakers, or those from countries whose graduate students are typically fluent in English, such as India and most European countries. Almost all highly ranked graduate programs teach economics in English, and we find that students learn the subtle non-mathematical skills in economics better if English is second nature. If your nationality will make admissions committees wonder about your English skills, you can either get your bachelor's degree at a -- possibly foreign -- college or university where almost all classes are taught in English, or you will have to compensate by being better on other dimensions. On the bright side, if you are a native English speaker, or from a country whose graduate students are typically fluent in English, you are already ahead in your quest to get into an economics Ph.D. program.)

Here is the not-very-surprising list of things that will help you get into a good econ Ph.D. program:

• good grades, especially in whatever math and economics classes you take,
• a good score on the math GRE,
• some math classes and a statistics class on your transcript,
• research experience, and definitely at least one letter of recommendation from a researcher,
• a demonstrable interest in the field of economics.

Chances are, if you're asking for advice, you probably feel unprepared in one of two ways. Either you don't have a sterling math background, or you have quantitative skills but are new to the field of econ. Fortunately, we have advice for both types of applicant.

If You're Weak in Math... Fortunately, if you're weak in math, we have good news: Math is something you can learn . That may sound like a crazy claim to most Americans, who are raised to believe that math ability is in the genes. It may even sound like arrogance coming from two people who have never had to struggle with math. But we've both taught people math for many years, and we really believe that it's true. Genes help a bit, but math is like a foreign language or a sport: effort will result in skill.

Here are the math classes you absolutely should take to get into a good econ program:

• Linear algebra
• Multivariable calculus

Here are the classes you should take, but can probably get away with studying on your own:

• Ordinary differential equations
• Real analysis

Linear algebra (matrices, vectors, and all that) is something that you'll use all the time in econ, especially when doing work on a computer. Multivariable calculus also will be used a lot. And stats of course is absolutely key to almost everything economists do. Differential equations are something you will use once in a while. And real analysis -- by far the hardest subject of the five -- is something that you will probably never use in real econ research, but which the economics field has decided to use as a sort of general intelligence signaling device.

If you took some math classes but didn't do very well, don't worry. Retake the classes. If you are worried about how that will look on your transcript, take the class the first time "off the books" at a different college (many community colleges have calculus classes) or online. Or if you have already gotten a bad grade, take it a second time off the books and then a third time for your transcript. If you work hard, every time you take the class you'll do better. You will learn the math and be able to prove it by the grade you get. Not only will this help you get into an econ Ph.D. program, once you get in, you'll breeze through parts of grad school that would otherwise be agony.

Here's another useful tip: Get a book and study math on your own before taking the corresponding class for a grade. Reading math on your own is something you're going to have to get used to doing in grad school anyway (especially during your dissertation!), so it's good to get used to it now. Beyond course-related books, you can either pick up a subject-specific book (Miles learned much of his math from studying books in the Schaum's outline series ), or get a "math for economists" book; regarding the latter, Miles recommends Mathematics for Economists by Simon and Blume, while Noah swears by Mathematical Methods and Models for Economists by de la Fuente. When you study on your own, the most important thing is to work through a bunch of problems . That will give you practice for test-taking, and will be more interesting than just reading through derivations.

This will take some time, of course. That's OK. That's what summer is for (right?). If you're late in your college career, you can always take a fifth year, do a gap year, etc.

When you get to grad school, you will have to take an intensive math course called "math camp" that will take up a good part of your summer. For how to get through math camp itself, see this guide by Jérémie Cohen-Setton .

One more piece of advice for the math-challenged: Be a research assistant on something non-mathy. There are lots of economists doing relatively simple empirical work that requires only some basic statistics knowledge and the ability to use software like Stata. There are more and more experimental economists around, who are always looking for research assistants. Go find a prof and get involved! (If you are still in high school or otherwise haven't yet chosen a college, you might want to choose one where some of the professors do experiments and so need research assistants -- something that is easy to figure out by studying professors' websites carefully, or by asking about it when you visit the college.)

If You're New to Econ... If you're a disillusioned physicist, a bored biostatistician, or a neuroscientist looking to escape that evil Principal Investigator, don't worry: An econ background is not necessary . A lot of the best economists started out in other fields, while a lot of undergrad econ majors are headed for MBAs or jobs in banks. Econ Ph.D. programs know this. They will probably not mind if you have never taken an econ class.

That said, you may still want to take an econ class, just to verify that you actually like the subject, to start thinking about econ, and to prepare yourself for the concepts you'll encounter. If you feel like doing this, you can probably skip Econ 101 and 102, and head straight for an Intermediate Micro or Intermediate Macro class.

Another good thing is to read through an econ textbook. Although economics at the Ph.D. level is mostly about the math and statistics and computer modeling (hopefully getting back to the real world somewhere along the way when you do your own research), you may also want to get the flavor of the less mathy parts of economics from one of the well-written lower-level textbooks (either one by Paul Krugman and Robin Wells , Greg Mankiw , or Tyler Cowen and Alex Tabarrok ) and maybe one at a bit higher level as well, such as David Weil's excellent book on economic growth ) or Varian's Intermediate Microeconomics .

Remember to take a statistics class, if you haven't already. Some technical fields don't require statistics, so you may have missed this one. But to econ Ph.D. programs, this will be a gaping hole in your resume. Go take stats!

One more thing you can do is research with an economist. Fortunately, economists are generally extremely welcoming to undergrad research assistants from outside econ, who often bring extra skills. You'll get great experience working with data if you don't have it already. It'll help you come up with some research ideas to put in your application essays. And of course, you'll get another all-important letter of recommendation.

And now for...

General Tips for Everyone Here is the most important tip for everyone: Don't just apply to "top" schools . For some degrees -- an MBA for example -- people question whether it's worthwhile to go to a non-top school. But for econ departments, there's no question. Both Miles and Noah have marveled at the number of smart people working at non-top schools. That includes some well-known bloggers, by the way--Tyler Cowen teaches at George Mason University (ranked 64th ), Mark Thoma teaches at the University of Oregon (ranked 56th ), and Scott Sumner teaches at Bentley, for example. Additionally, a flood of new international students is expanding the supply of quality students. That means that the number of high-quality schools is increasing; tomorrow's top 20 will be like today's top 10, and tomorrow's top 100 will be like today's top 50.

Apply to schools outside of the top 20 -- any school in the top 100 is worth considering, especially if it is strong in areas you are interested in. If your classmates aren't as elite as you would like, that just means that you will get more attention from the professors, who almost all came out of top programs themselves. When Noah said in his earlier post that econ Ph.D. students are virtually guaranteed to get jobs in an econ-related field, that applied to schools far down in the ranking. Everyone participates in the legendary centrally managed econ job market . Very few people ever fall through the cracks.

Next -- and this should go without saying -- don't be afraid to retake the GRE. If you want to get into a top 10 school, you probably need a perfect or near-perfect score on the math portion of the GRE. For schools lower down the rankings, a good GRE math score is still important. Fortunately, the GRE math section is relatively simple to study for -- there are only a finite number of topics covered, and with a little work you can "overlearn" all of them, so you can do them even under time pressure and when you are nervous. In any case, you can keep retaking the test until you get a good score (especially if the early tries are practice tests from the GRE prep books and prep software), and then you're OK!

Here's one thing that may surprise you: Getting an econ master's degree alone won't help. Although master's degrees in economics are common among international students who apply to econ PhD programs, American applicants do just fine without a master's degree on their record. If you want that extra diploma, realize that once you are in a PhD program, you will get a master's degree automatically after two years. And if you end up dropping out of the PhD program, that master's degree will be worth more than a stand-alone master's would.

For getting into grad school, much more valuable than a master's is a stint as a research assistant in the Federal Reserve System or at a think tank -- though these days, such positions can often be as hard to get into as a Ph.D. program!

Finally -- and if you're reading this, chances are you're already doing this -- read some econ blogs. (See Miles's speculations about the future of the econ blogosphere here .) Econ blogs are no substitute for econ classes, but they're a great complement. Blogs are good for picking up the lingo of academic economists, and learning to think like an economist. Don't be afraid to write a blog either, even if no one ever reads it (you don't have to be writing at the same level as Evan Soltas or Yichuan Wang ); you can still put it on your CV, or just practice writing down your thoughts. And when you write your dissertation, and do research later on in your career, you are going to have to think for yourself outside the context of a class. One way to practice thinking critically is by critiquing others' blog posts, at least in your head.

Anyway, if you want to have intellectual stimulation and good work-life balance, and a near-guarantee of a well-paying job in your field of interest, an econ PhD could be just the thing for you. Don't be scared of the math and the jargon. We'd love to have you.

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What You Should Know Before Applying to an Economics PhD Program

Here's One Student's Experience Applying to an Economics PhD Program

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I recently wrote an article about the types of people who shouldn't pursue a Ph.D. in economics . Don't get me wrong, I love economics. I've spent a majority of my adult life in the pursuit of knowledge in the field studying around the world and even teaching it at the university level. You may love studying economics, too, but a Ph.D. program is an entirely different beast that requires a very specific type of person and student. After my article was published, I received an email from a reader, who just happened to be a potential Ph.D. student. 

This reader's experience and insights into the economics Ph.D. program application process were so on point that I felt the need to share the insights. For those considering applying to a Ph.D. program in Economics, give this email a read.

One Student's Experience Applying to an Economics Ph.D. Program

"Thanks for the graduate school focus in your recent articles. Three of the challenges you mentioned [in your recent article ] really hit home:

• American students have a comparative disadvantage for selection compared to foreign students.
• The importance of math cannot be overstated.
• Reputation is a huge factor, especially that of your undergraduate program.

I applied unsuccessfully to Ph.D. programs for two years before conceding that I might not be ready for them. Only one, Vanderbilt , gave me even a wait-list consideration.

I was a little embarrassed at being shunned. My mathematics GRE was 780. I had graduated at the top of my class with a 4.0 GPA in my economics major and completed a statistics minor . I had two internships: one in research, one in public policy. And accomplished this all while working 30 hours a week to support me . It was a brutally hard couple of years.

The Ph.D. departments I applied to and my undergraduate adviser all pointed out:

• I attended a small, regional public university, and our professors spent significant time with students to the detriment of their own publishing.
• Though I took a heavy load of statistics coursework, I only had two terms of calculus.
• I had never been published; not even in an undergraduate journal.
• I aimed for highly-ranked schools in the Midwest like Illinois, Indiana, Vanderbilt, Michigan, Wisconsin, Washington University in St. Louis, but neglected schools on the coasts, which might have seen me as a more 'diverse' candidate.

I also made what many considered a tactical error: I went to talk with the graduate programs before I applied. I was later told that this is a taboo and seen as schmoozing. I even talked at length with the director of one program. We ended up talking shop for two hours and he invited me to attend presentations and brown bags whenever I was in town. But soon I would learn that he would be ending his tenure to take a position at another college, and would no longer be involved in the approval process for that program.

After going through these obstacles, some suggested I prove myself with a Master's Degree in Economics first. I had originally been told that many schools pick top candidates immediately after undergraduate, but this new advice made sense because departments commit considerable resources to their Ph.D. candidates and want to make sure their investment will survive first-year exams.

With that path in mind, I found it interesting that so few departments offer a terminal Masters in Economic. I'd say about half as many as those that offer only the terminal Ph.D. Fewer still offer an academic Master's - most of these are professional programs. Still, I'm glad it gives me a chance to dig deeper into research and see if I'm ready for Ph.D. research."

My Response 

This was such a great letter for many reasons. First, it was genuine. It wasn't a "why didn't I get into a Ph.D. program" rant, but a personal story told with thoughtful insights. In fact, my experience has been nearly identical, and I would encourage any undergraduate student considering pursuing a Ph.D. in economics to take this reader's insights to heart. I, myself, was in a Master's program (at Queen's University in Kingston, Ontario, Canada) before I entered my Ph.D. program. Today, I must admit that I wouldn't have survived three months as a Ph.D. student had I not attempted an MA in Economics first. 

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Why you need a phd in economics.

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How to Become an Economist: PhD Required

Earning a PhD in Economics means you have completed the highest level of education in the discipline, thereby creating nearly unlimited opportunities for any job in a related field. 

As a PhD economist, you'll have the skills to analyze real-world economic data with rigorous statistical techniques, critically assess the economic implications of public policy, and understand the complex relationships behind key macroeconomic variables like GDP growth, interest rates and inflation. 

The Department of Economics at SMU is highly ranked among economics departments in the United States and has prepared PhD candidates for careers as economists in both academic and non-academic positions for more than 55 years. 

If you want to become a PhD Economist, this guide will help you understand SMU's unique approach to the study of economics and prepare you to apply to our PhD program with confidence. 

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A PhD in economics is the only one worth getting

People often ask me: “Noah, what career path can I take where I’m virtually guaranteed to get a well-paying job in my field of interest, which doesn’t force me to work 80 hours a week, and which gives me both autonomy and intellectual excitement?” Well, actually, I lied, no one asks me that. But they  should  ask me that, because I do know of such a career path, and it’s called the economics PhD.

“What?!!” you sputter. “What about all those articles telling me  never ,  ever , ever , ever  to get a PhD?! Didn’t you read those?! Don’t you know that PhDs are  proliferating like mushrooms  even as  tenure-track jobs disappear ? Do you want us to be stuck in eternal postdoc hell, or turn into adjunct-faculty wage-slaves?!”

To which I respond: There are PhDs, and there are PhDs, and then there are econ PhDs.

Basically, I think of PhDs as mostly falling into one of three categories:

1. Lifestyle PhDs . These include math, literature and the humanities, theoretical physics, history, many social sciences, and the arts. These are PhDs you do because you really, really, really love just sitting and thinking about stuff. You work on your own interests, at your own pace. If you want to be a poor bohemian scholar who lives a pure “life of the mind,” these PhDs are for you. I totally respect people who intentionally choose this lifestyle; I’d be pretty happy doing it myself, I think. Don’t expect to get a job in your field when you graduate, though.

2. Lab science PhDs.  These include biology, chemistry, neuroscience, electrical engineering, etc. These are PhDs you do because you’re either a suicidal fool or an incomprehensible sociopath. They mainly involve utterly brutal hours slaving away in a laboratory on someone else’s project for your entire late 20s, followed by years of postdoc hell for your early 30s, with a low percentage chance of a tenure-track faculty position. To find out what these PhD programs are like,  read this blog post . If you are considering getting a lab science PhD, please immediately hit yourself in the face with a brick. Now you know what it’s like.

(Note: People have been pointing out that electrical engineering isn’t as bad as the other lab sciences, with somewhat more autonomy and better job prospects. That’s consistent with my observations. But econ still beats it by a mile…)

3. PhDs that work.  I’m not exactly sure which PhDs fall into this category, but my guess is that it includes marketing, applied math and statistics, finance, computer science, accounting, and management. It  definitely , however, includes economics. Economics is the best PhD you can possibly get.

Why get a PhD in economics? Here’s why:

Reason 1: You get a job

Can I say it any more clearly? An econ PhD at even a middle-ranked school leads, with near-absolute certainty, to a well-paying job in an economics-related field. I believe the University of Michigan, for example, has gone many, many years without having a PhD student graduate without a job in hand.

You will not always get a tenure-track job, though there are a lot more of those available right now than in other fields (thanks, I am guessing, to the nationwide explosion in business schools, which hire a lot of econ PhDs, including yours truly). But if you don’t get a tenure-track job, you will get a well-paid job as a consultant, or a well-paid job in finance, or a decently-well-paid job in one of the many, many government agencies that hire armies of economists. All of these are what are commonly referred to as “good jobs,” with good pay, decent job security, non-brutal working conditions, and close relation to the economics field.

Now, this may be less true at lower-ranked schools; I don’t have the data. I imagine it’s not as certain, but still far, far better than for lab science PhDs at similarly ranked schools.

Why do so very few newly minted econ PhDs face the prospect of unemployment? Part of it is due to the econ field’s extremely well-managed (and centrally planned!)  job market . Part of it is due to the large demand from the lucrative consulting and finance industries. And part is due to the aforementioned proliferation of b-schools. There may be other reasons I don’t know. But in an America where nearly every career path is looking more and more like a gamble, the econ PhD remains a rock of stability—the closest thing you’ll find to a direct escalator to the upper middle class.

Reason 2: You get autonomy

Unlike the hellish lab science PhD programs, an econ grad student is not tied to an adviser. Since profs don’t usually fund econ students out of grants (few even have big grants), economics students mostly pay their way by teaching. This means you usually have to teach, but that is not nearly as grueling as working in a lab. Even when a professor does support you with a grant, he or she generally employs you as a research assistant, and gives you ample time to work on your own research.

Compare this to a lab science PhD, in which you basically do the project your adviser tells you to do, and you succeed or fail in part based on whether your adviser chooses a project that works out. Your destiny is out of your hands, your creativity is squelched, and your life is utterly at the mercy of a single taskmaster. In economics, on the other hand, you can start doing your own original, independent research the minute you show up (or even before). Professors generally encourage you to start your own projects. Unlike in lab science PhD programs (but as in “lifestyle” PhD programs), your time is mostly your own to manage.

This means that as an econ grad student, you’ll have a life. Or a chance at having a life, anyway.

Reason 3: You get intellectual fulfillment

Econ is not as intellectually deep as some fields, like physics, math, or literature. But it’s deep enough to keep you intellectually engaged. Econ allows you to think about human interactions, and social phenomena, in a number of different intellectually rigorous ways (e.g. game theory, incentives, decision theory, quantification of norms and values, bounded rationality, etc.). That’s cool stuff.

And economists, even if their research is highly specialized, are encouraged to think about all different kinds of topics in the field, and encouraged to think freely and originally. That’s something few people appreciate. In a lab science, in contrast, you are encouraged to burrow down in your area of hyper-specialization.

In econ, furthermore, you get exposed to a bunch of different disciplines; you get to learn some statistics, a little math, some sociology, a bit of psychology, and maybe even some history.

Also, as an economist, your status as an intellectual will not disappear when you get a job. Even if you go to work as a consultant or a financier, your thoughts will be welcomed and considered by economists in the blogosphere. And you can even publish econ papers as a non-academic.

In fact, it’s also worth pointing out that econ is a field in which outsiders and mavericks are able to challenge the status quo. This is in spite of the economics profession’s well-known deference to intellectual authority figures. The simple fact is that in econ, you don’t need money to advance new ideas, as you do in biology or chemistry. And you don’t need math wizardry either, as you would if you wanted to introduce new ideas in physics.

Reason 4: The risk of failure is low

In economics PhD programs, the main risk of failure is not passing your preliminary exams. This happens to a substantial fraction of people who get admitted to econ programs (maybe 25% or fewer at Michigan). But if you flunk out,  you get a complimentary Master’s degree , which is probably worth the 2 years that you’ll have spent in the program. And after you pass the prelims, there is little risk of not finishing a dissertation; unlike in most fields, you do not have to publish to graduate.

Caveats about the econ PhD

Of course, I don’t want to make it seem like the econ PhD is an utterly dominant strategy for life fulfillment. There are some caveats that you should definitely take into account.

First, there is the fact that an econ PhD program is still a PhD program. That means, first of all, that you will be in poverty in your late 20s. That is not fun for most people (some “lifestyle PhD” students and bohemian artists excepted). Also, econ PhD programs force you to manage your own time, while giving you very little feedback about how well or badly you’re actually doing. That can be stressful and depressing.

Second, be aware that the culture of economics is still fairly conservative, and not in the good way. Econ is one of the few places in our society where overtly racist and sexist ideas are not totally taboo ( Steve Landsburg is an extreme example, but that gives you the general flavor). Discrimination against women, in particular, probably still exists, though I’d say (or I’d hope, anyway) that it’s on the wane.

Finally, there is the fact that if enough people read and believe this blog post, it will cease to be true. There’s a piece of economics for you: as soon as people become aware that a thing is overvalued, they will start bidding up its price. But information diffuses slowly. Expect the econ PhD to lose its luster in five to 10 years, but that still gives you a window of time.

Anyway, despite these caveats, the econ PhD still seems like quite a sweet deal to me. And compared to a hellish, soul-crushing, and economically dubious lab science PhD, econ seems like a slam dunk. There are very few such bargains left in the American labor market. Grab this one while it’s still on the shelves.

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Jonathan Black

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

This week’s problem

I work in analytics at a Big Four firm but I am deciding whether to go back to university to do a PhD in economics, which for me would be incredibly interesting and fulfilling. However, once I have completed the four-year programme I have no intention of following a career in academia, so is it worth it? Anonymous, 20s

Jonathan’s answer

People can have different reasons for embarking on four years of postgraduate research, from creating new career opportunities and gaining expertise to satisfying intellectual curiosity, and wanting to add to the body of knowledge. It sounds as though your primary motive is to explore economics in depth and develop new ideas.

Four years of self-directed study, especially in a non-laboratory based, solo subject such as economics, will test your reserves of internal motivation. Aside from the intellectual benefits, you will gain important skills in research, time management and drive. Common advice to people considering further study is that they must truly want to do it for its own sake.

In your case, and encouragingly, you would find it “incredibly interesting and fulfilling”. Academia needs people with this motivation and curiosity, and an enthusiasm to transmit such interest to colleagues, the public and students in teaching and seminars. You might discover interests and develop skills hitherto untapped.

In your twenties, it is brave to rule out possible career paths in four years’ time; at this stage it might be better to keep your options open until you know more. However, you ask if a PhD would be “worth it” if you eventually choose not to continue in academia. How might you define worth?

Measuring worth in a purely financial and employment point of view, PhDs have better outcomes than masters or first-degree graduates. Across the UK, 95 per cent of PhDs 15 months after leaving university in 2020-21, had a “positive outcome” — defined as highly skilled employment or further study — and a median salary of £38,000, according to the annual Graduate Outcomes survey . Encouragingly, 86 per cent of PhDs said their studies fitted their future plans, and 76 per cent reported they were using what they had learnt.

This compares with 85 per cent of masters students and 80 per cent of first-degree graduates who said they had a positive outcome and reported median salaries of £29,500 and £26,000 respectively.

Outside academia, a PhD would open up more career options, for example in non-governmental organisations, think-tanks and analytical consultancies. You may come to love the freedom of academic pursuit, the chance to inspire others and to consult externally. And while financially a PhD is “worth it”, it sounds as though the PhD is attractive to you, in and of itself, and you might come to regret not spending four years pursuing deep research into an area of great personal interest.

Readers’ advice

PhDs take ferocious levels of commitment. On the other hand you learn things about yourself, and your discipline, you can learn no other way. Anthony Staines

I have a humanities PhD and now work in management consulting. I have zero regrets. I pursued research questions I remain passionate about, was able to publish research and contribute to books, win awards, speak at international conferences and spend my twenties travelling the world. GW You absolutely must have stable funding in place before you begin. Do not consider doing it unless you have that. It is essential. investor123

Jonathan Black is director of the Careers Service at the University of Oxford. Every fortnight he answers your questions on personal and career development and working life. Do you have a question for him? Email: [email protected]

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