Too Many Ph.D.’s and Professionals?

by Richard Vedder*

In two blogs in this space (here and here) that stirred up some interest (80 comments), I presented evidence that a large portion of those receiving bachelor’s degrees at American colleges and universities these days are getting jobs requiring less-than-college-level educational skills. I went on to argue that this is further evidence that the strategy of trying to dramatically increase the number of those with degrees may be counterproductive, and that we in fact in one sense are “overinvested” in higher education—that more people are getting degrees than the number of jobs available that traditionally have gone to college graduates (for a complete study on this topic, click here).

Mentioning this, however, leads to two fears. One is that some people, for whom college is almost certainly likely to be a good investment of time and money, might decide to forgo an education, to their detriment and that of society. There are still a good number of students who benefit from a college education.

However, I have a second, seemingly contradictory fear: that as college grads learn of the job/degree imbalance, they will try to get around the problem in some cases by inappropriately going to school even more, by getting a master’s or even doctoral degree, or perhaps become a member of the professions—becoming, say, a lawyer. The Bureau of Labor Statistics data suggest that the problem of underemployment or over-education (taking jobs requiring vastly less education than that acquired) extends very much to still higher levels of learning, to advanced degrees.

Consider the following. Looking at BLS data for 2008, over 10,500 persons with Ph.D. or professional degrees were employed as “cashiers” (excluding gaming); over 27,400 were retail salespersons; and well over 4,700 were hairdressers, hairstylists, or cosmetologists. My sidekick Chris Matgouranis found 10 occupations like these: the ones listed above plus waiters and waitresses, landscaping workers, amusement and recreation attendants, receptionists and information clerks, secretaries (except legal, medical, and executive), truck drivers (heavy and tractor-trailer) and electricians. Collectively, these occupations had well over 74,000 with doctorates or such professional degrees as a J.D. Other evidence confirms this. The Wall Street Journal recently reported that 29 percent of new lawyers were not doing legal work, consistent with the notion that there is a glut of those with doctorates and some professional degrees. The Economist recently published an article presenting evidence of very dim job prospects for many new Ph.D.’s.

To be sure, some of this is related to the recent prolonged economic downturn. Yet stories of, say, historians, with doctorates doing all sorts of non-history type work, have been around for years. Training Ph.D.’s and professionals is extremely expensive—often six-digit amounts for the post-bachelor’s training, only part of which is billed to the student. Why are we doing this? Why, for example, doesn’t the U.S. go to perhaps 30 or 40 Ph.D. programs in history (instead of 100 or more), to train perhaps one-third the number of students that we train now? That would be enough to keep us from losing touch with our heritage, and would allow us to continually record and analyze our ever-growing past, and continue to disseminate that knowledge to a broader public.

The argument sometimes used to keep graduate programs is they are is that relatively low-paid graduate students are doing a lot of the undergraduate teaching. But does that not really mean that such students are doing work traditionally done by faculty, who don’t want to have to stoop to teaching lowly undergraduates? And the fact that graduate students in some disciplines, including the humanities, often take eight or more years to get their degrees suggests that the true cost of these degrees (including the value of work foregone while in school) is even higher than the mere tuition fees, etc., would indicate.

Many programs are kept, of course, because the faculty members teaching them want to keep their jobs, or simply prefer teaching advanced graduate students. In other cases, the institution equates prestige and status with offering a large number of graduate/professional programs, and thus resists abandoning them. One of the healthy byproducts of the financial squeeze facing some schools as a consequence of weak business conditions is that out of sheer desperation they are being forced to abandon some of these programs that make little sense on any sort of rational cost-benefit analysis.

In a pure unfettered market economy, there are no such things as “shortages” or “gluts” of any type of worker—wages adjust to meet market conditions. If we are turning out too many historians, their pay will reach such low levels that few new candidates will pursue that field. But the combination of subsidies (mostly publicly but some privately financed) and nonprofit institutional status leads us to continue to produce highly trained individuals who do things that society does not find very valuable. When the political process, rather than market process, controls resource allocation and compensation, we tend to get undesirable results.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on January 5, 2011.