Last week CCAP released From Wall Street to Wal-Mart: Why College Graduates are not Getting Good Jobs. In it we presented data from the Bureau of Labor Statistics (BLS) which show that an alarmingly large percentage (35.3 percent in 2008) of college graduates are "underemployed."
While we focused on Bachelor's degree recipients, one wonders about the job prospects for America's most highly educated individuals as well, namely those possessing PhDs. A recent article from the Economist suggests that they are not too encouraging. Although individuals possessing PhDs do enjoy a wage premium 26 percent greater than those with only Bachelor's degrees, this premium barely exceeds the 23 percent figure for those with Master's degrees. From an earnings perspective, investing in a PhD may not be as advantageous as many suppose.
A major reason to pursue a doctoral degree is to enable one's self to have a career in academia. However, freshly minted PhDs are finding it increasingly difficult to find university employment. Indeed, according to the new book Higher Education? by Andrew Hacker and Claudia Dreifus, between 2005 and 2009, America produced 100,000 new doctoral degrees for only 16,000 new professorships. Clearly, our country's colleges and universities cannot employ all of the PhDs they are producing.
So why do universities keep turning out such a large number of PhDs? The Economist article suggests the main explanation is that it is in their best interest to have loads of cheap research and teaching help around. This, however, is likely not in the best interest of the students themselves. The article puts it more eloquently:
The interests of academics and universities on the one hand and PhD students on the other are not well aligned.This of course is not to suggest that learning for learning's sake is a bad thing. It may be that even if doctoral students knew there was a zero percent chance of them ever obtaining university employment or finding a high paying job, they would still pursue the PhD. Yet, in a society with limited resources, it is a legitimate public policy question to ask how much we want the government to subsidize this behavior. Given the poor employment prospects for many college graduates, including even those with PhDs, the answer may very well be that we are currently over-invested in higher education.
Some university departments and academics regard numbers of PhD graduates as an indicator of success and compete to produce more. For students, a measure of how quickly those students get a permanent job, and what they earn, would be more useful.