The (slowly) changing face of Ontario economics departments

When I was an undergraduate, many of my professors were Canadian born and American trained. The demographic profile of Canada, and of Canadian economics classrooms, has changed since then, as our country has recruited high skilled immigrants from around the world. But has there been a corresponding change in the demographic composition of the professoriate?

As part of my on-going research project with Anindya Sen and Marcel Voia on hotness and earnings, I've been gathering data on the educational backgrounds of Ontario economics professors - where they received their first degrees, and where they studied for their PhDs. Some preliminary results are shown over the fold:

The numbers in the table are based on 391 Ontario economics professors for whom I was able to obtain BA or first degree information - 106 assistant professors, 133 associate professors, and 152 full professors. (A full professors is one who can call herself simply "Professor", without an assistant or associate before her name). 

It usually takes 5 to 7 years to move from assistant to associate professor. The time from associate to full is more variable - some make the move after 5 or 7 years, some remain at associate for their entire academic careers. But roughly speaking, a typical full professor is someone in his or her 40s, 50s, or 60s, who has been on the job at least 15 years. 

Over half of full professors have Canadian first degrees, and over 80 percent are from Canada, the US, or what I call the anglosphere - the UK, Ireland, Australia and New Zealand. European first degree holders account for 5 percent of the total, and East Asians (primarily from China) for 6 percent. The remaining 8 percent is divided between the rest of the world - Latin America (1 percent), the Middle East and North Africa (3 percent), South Asia (3 percent) and sub-Saharan Africa (1 percent).

The assistant professors - people who have been hired in the last 5 to 10 years - have quite a different demographic profile. Fewer - only a quarter - have Canadian first degrees. While Canadian economics departments continue to hire Americans, the green section representing the UK, Australia and so on has almost disappeared. 

Over a quarter of new hires have a European background - undergraduate degrees from countries such as Germany, Spain, Italy, Romania, Russia, and so on. Although there is growth in the proportion of professors from East Asian countries and the rest of the world, those numbers have been increasing less rapidly than I might have expected. 

Hiring a junior faculty member is like any other purchase decision: what a person ends up buying is heavily influenced by where he goes shopping. To help explain the processes generating the numbers above, I've put together a breakdown of Ontario economics professors by location of PhD:

The percentage of faculty members with Canadian PhDs increases as one moves from full to associate professor. Recruitment patterns at the assistant level, however, are similar to those of yesteryear, with almost exactly half of Ontario assistant professors coming from US institutions. (The graph above is based on 109 assistants, 134 for associates, 154 full professors.)

What is different now, though, is the background of recruits with American doctorates. Of the 54 Ontario assistant professors in economics with US PhDs, just 6 -- 11 percent -- have a Canadian background. For full professors, the comparable number is 47 percent. The single largest group is now Europeans, who make up 31 percent of assistant professors with a US PhD. [Of the 47 people with Canadian PhDs who have been hired by Ontario economics departments recently, 49 percent have Canadian BAs, 19 have European first degrees, while 17 percent have a first degree from somewhere in East Asia.]

So what has changed? Why are today's new hires unlikely to have a Canadian background? I have no evidence, but I have theories. First, from Sydney Crosby to Nathan Nunn, Steve Nash to David Card, Wayne Gretzky to Janet Currie, the best Canadians play for US teams. Elite US schools might sign Canadian academics for the same reason that US hockey teams sign Canadian players - they're popular with the crowds, because they aren't noticeably "foreign." Also, NAFTA makes it relatively easy for Canadians to obtain US work permits. Perhaps Canadian economists are not working in Canadian schools because they're doing quite nicely in the US, thank you very much.

Second, it may be that Canadian universities are not producing good candidates for economics PhD programs. I have blogged before about some of the problems with Canadian economics education. Perhaps Canada is graduating fewer top quality undergraduate economists, or perhaps we do not have enough of the underemployed physicists and engineers who, increasingly, form the pool from which economics PhD programs draw. 

Third, immigration policy matters. It is easier for foreign nationals to obtain Canadian work permits than was the case 15 or 20 years ago, while the US seems, if anything, to have made it more difficult for Europeans to work there. People work where they can; schools hire who they can.

Fourth, the pool of candidates on the job market reflects the admission policies of US and Canadian graduate schools. I took a look at some US schools' listings of job market candidates and graduate students, for example, Princeton's, MIT's, Penn State, Berkeley's. The patterns that I saw in those listings were that lower-ranked schools took more international students, and that most schools have a very diverse mix of students. One thing that comes out clearly in those pages that location of first degree is only a rough measure of ethnicity - Canadian and US first degree holders reflect the ethnic diversity of our undergraduate programs. 

Fifth, Canadian economics departments are part of an international job market. At present, the international prestige of Asian universities is rising rapidly, and they are increasingly making competitive offers to Canadian and US trained graduates. Europe, on the other hand, is experiencing relatively tough economic times. One would expect these trends to have impacts on the supply of candidates to the Canadian market. 

Ultimately Canadian universities hire foreign workers for the same reasons that other businesses do: we want to be globally competitive. Sure, we could play by the Rumsfield principle and go to war with the army we have. But given the choice, we recruit internationally, so that we can go to war with the army we want.

But what about students in Canadian economics PhD programs? Where are they getting jobs?

The raw numbers of graduates of Canadian schools who currently hold jobs as assistant professors in Ontario economics departments is as follows:

Sometimes students came to see me to discuss their plans to take a PhD. I always ask "Are you hoping to be a university professor?" and then try to convey some sense of the probability of this happening. Unless a student is at UBC, University of Toronto, or a handful of other schools, their best shot at academic employment is at a smaller, teaching-oriented institution, or in a policy or business school. Even then, the odds of getting an academic job are low. 

To see why, simply compare the number of junior academic positions to the number of PhD students. Right now there are just over 100 assistant professors in Ontario economics departments - and that's a number generated by a long and sustained hiring boom. How many people are presently chasing assistant professor jobs? University of Toronto currently has at 71 PhD students listed on its web page. UBC's PhD program is about the same size, while Queen's has just over 60 students  Western's program is slightly smaller, with about 43 students. 

Note that both the number of assistant professors, and the number of PhD students, are stocks. However, since people take about 5 or so years to do a PhD, and 5 or so years to move from assistant to associate professor, the two stocks are roughly comparable. It's also true that Ontario is not the only academic job market. Lots of Canadian students get academic jobs elsewhere in Canada, in the US, Europe or, increasingly, Asia. But, ultimately, a student in a Canadian economics PhD program has a good chance of ending up in working in the private sector, in government, or in a primarily teaching position.

It's important for graduate students to know this. An economic theorist may end up spending their days in a teaching-oriented school, explaining intermediate micro to business students. The high powered econometrician may end up working for a think tank, analyzing data and writing reports.

In jobs like these, speaking intelligibly and being able to write a sentence with few spelling and grammatical errors is crucial. Indeed, federal government studies of the progress of visible minorities in the federal public service consistently point to language fluency as an obstacle to the success of people from visible minority communities. In my own experience, the foreign-born students who have had the most success on the job market have worked hard to improve their level of English fluency, reading English novels in their spare time, going out and socializing with English-speakers, actively seeking advice on how to improve their writing, or spending hours practicing pronouncing "the" correctly. 

Ultimately, does the national origin of Canadian economics professors matter? I think it does, for two reasons. First, people who come to Canada having completed their education and training elsewhere are less likely to have an interest in analyzing Canadian policy issues, or the skills necessary to do so, and that lowers the quality of the Canadian policy debate. Second, potential PhD students benefit from having some knowledge of how the academic job market works, so that they can make the human capital investment decisions that are best for them.

Comments

[Joel W]

Very informative post Frances. Fits with what I have observed more anecdotally. This type of info is very useful to PhD students; I know I was pretty ignorant of the job market prior to being on it. At the very least it shows students hoping to get academic jobs that they will need to be prepared to move almost anywhere. I have former classmates that have academic jobs now in Greenland and Tasmania!

[Frances Woolley]

Joel W "At the very least it shows students hoping to get academic jobs that they will need to be prepared to move almost anywhere."

Which, of course, brings us to the "two job problem" that is, the challenges couples face in getting two jobs in the same city/country/continent. (Marital advice to PhD students - find a partner with a professional qualification that allows them to work almost anywhere).

[Kevin]

Hi Frances,

Interesting analysis, and I agree with most of your advice.

I'm not sure about the part with the " How many people are presently chasing assistant professor jobs?" reasoning. I wouldn't take that too far.

In my smallish UofT cohort, my classmates got jobs in Hong Kong, Warwick, Michigan State, McGill, and me at UBC. The majority got academic jobs; few in Ontario.

Recent UofT cohorts have placed at lots of good places outside Ontario.

So, I wouldn't infer much at all from the lack of UofT-to-Ontario placements.

[Frances Woolley]

Kevin - true, but if you look at that last table, it suggests that U of T is placing students in academic jobs at a better rate than most other Canadian schools.

The question is: what kind of an academic job can a student who does a PhD in a second-tier Canadian university expect to get? The answer to that question will depend a lot on the market, the student's supervisor, and the quality of the student his or herself. The advice I give to students who are thinking about doing a PhD is to ask very specific questions before choosing a program, for example, "how many students have graduated from your program in the last 3 years, and what jobs are they in now?"

[Jacques René Giguère]

There is another factor: the "rankings". The Times Educationnal Supplement and others use the proprtion of foreign staff as a proxy for "quality" ( maybe because you are recruiting on the "world market" instead of being autarkic. The problem is that,if undoubtedly my small cegep were to hire Krugman the quality of our staff would increase, I am not sure that swapping my job with his would increase the quality at Princeton. And yet , both ranking would rise.

[Jacques René Giguère]

On hotness. Although in my experience, the general tone of students rankings on Ratemyteachers mostly agreed with our own assesment of our colleagues,there is still weirdness going on.
For years, my own rankings were consistently high, and before hotness, there was "coolness" the black sunshades which I consistently got. I just checked for the first time in about 2 years and wow! my averages were way down...

Not to toot my horn but here are the comments, bad writing in both languages included:

09/05/12

Le prof est tout simplement incroyable,il connait sa matière et bien plus. L'exellence même en économie point à la ligne! Pas le temps de niaisé!
Easiness3 stars
Helpfulness 4 stars
Clarity 5 stars

9/05/12

Incoryable comme prof! toujours prêt à nous conter ses histoires et nous faire rire avec ses connaissances infinies.
Easiness3 stars
Helpfulness 5 stars
Clarity 4 stars

03/13/12

Très bon professeur. Très cultivé et super intéressant.
Easiness4 stars
Helpfulness 4 stars
Clarity 5 stars

11/07/11

Ortho!!! Personne ne l'aime!! J'lai jamais eu mais en entendre parler j'aimerais mieu mourir!!! That it!
Easiness1 star
Helpfulness 1 star
Clarity 1 star

09/19/03

Giguère is excellent, He are a big box of information often surprising
Easiness5 stars
Helpfulness 5 stars
Clarity 5 stars

So the overall is skewed by someone who at least has the honesty of stating he doen't know me...Would a bigger sample revert to the mean? Do we need to more carefully vet the respondants ( I presume an official ranking would take care of that but...still)
Frances: I can privately provide the link to my rankings...

[Giovanni]

"Of the 54 Ontario assistant professors in economics with US PhDs, just 6 -- 11 percent -- have a Canadian background. For full professors, the comparable number is 47 percent. The single largest group is now Europeans, who make up 31 percent of assistant professors with a US PhD. [Of the 47 people with Canadian PhDs who have been hired by Ontario economics departments recently, 49 percent have Canadian BAs, 19 have European first degrees, while 17 percent have a first degree from somewhere in East Asia.]"

Might all this just reflect the general tightening up of the North American academic job market? I suspect that most of the non-Canadian recent hires with US PhDs have degrees from elite departments. These are people who had they been members of an earlier generation would have readily found jobs in good second-tier US schools, and for this reason would have been beyond the reach of most Ontario departments. With tenure-track jobs now so scarce everywhere, Ontario departments with openings nowadays have a shot at these people, and are hiring them in preference to Canadians with PhDs from non-elite US or Canadian departments.

[Nick Rowe]

Lot of solid data there Frances!

Anecdotally (i.e. I'm not at all sure I've got this right): it was very easy for Canadian universities to hire non-Canadians in the 1960s. Then there was a Canadian nationalist movement in the early 1970's which made eventually it much harder to hire non-Canadians (IIRC they were concerned that Canadian universities were full of US professors?). But since the 1980's, it has slowly become much easier to hire non-Canadians, as immigration rules (or the application of those rules) have eased. Somebody please confirm/deny/expand.

[Frances Woolley]

Nick - yes, you're right, though I recall the relaxation of rules towards hiring non-Canadians happened a little bit later - more like the late 1990s/2000s. During the 80s and 90s all job ads had a phrase that went something like 'this advertisement is directed first at Canadian citizens/permanent residents.' I don't think that's required any more. That's I suspect one reason why there are more Cdns at the Associate level - some those people would have been hired under the old rules.

Giovanni - yes and no. A good number of the 2011 assistant professors were hired before the current economic crisis, when the job market was generally pretty good. At the Assistant Professor level, there's no one in the data from Harvard, and about 4 from Princeton, 1 from Stanford, 5 from Berkeley, 7 from Minnesota, and people from a wide range of top 100 but possibly not top 10 schools, e.g. Cornell, Brown, John Hopkins, Iowa, Michigan,...

One factor that makes it either harder or easier for Cdn departments to hire is the exchange rate - people never do propere purchasing power parity adjustments when they're deciding which offer to accept, so the increase in the Cdn $$ has made it much easier for Cdn departments to hire.

[Nick Rowe]

Frances: on your last point: It might not be just failing to do PPP calulations. If for example you have student debt in US$, and your salary is fixed in C$, you would suffer if the C$ depreciates.

[Giovanni]

Frances,

Thanks for the additional info...interesting. I can’t help imagining some future Ontario Minster of Training, Colleges & Universities being briefed about all this.

“So let me get this straight. U of T, Queen’s and Western together can turn out maybe 30-40 economics PhDs a year.”
”Yes, Minister.”
”But in a typical year fewer than ten of those new PhDs get Assistant Professor positions at Ontario universities.”
”Yes, Minister.”
”And of those only half will be Canadians, even fewer Ontarians.”
”Yes, Minister.”
”And most of the people we do appoint will be non-Canadians with degrees from US universities, and mostly not even the top US universities.”
”Yes, Minister”
”Well, I’ve got to say I’m seeing a lot of redundancy here. Suppose we closed down the PhD programs at, say, Queen’s and Western and relied on just U of T. Then we’d probably still have all the qualified people we’d need even if we restricted the U of T program to Canadians. Yes? In fact, why not close down the U of T program as well and just send a bunch of our top economics grads on scholarship to Cornell or Iowa or wherever? Lot cheaper than subsidizing three programs of our own, I should think.”
”Yes, Minister, except that…”
“Except what?”
“Well, Minster, there are also economics PhD programs at McMaster, York, University of Ottawa and Carleton.”
“Tell me you’re joking.”

[Chris J]

Great post. What happens when it is expanded to include econ work that is one step removed from academia: civil service, Stats Can, Bank of Canada etc?

I am guessing there is are many PhD types ending up in these places. Is this so?

[Frances Woolley]

Giovanni - hey, it's an export industry. When I'm doing the graduate admissions, I'll go and check out the web pages of econ departments in Pakistan or Bangladesh or Indonesia, and it's so good to see a Guelph or Carleton or some other PhD. It's not like it's easy to shrink the econ departments, so they might as well admit as many students/generate as much revenue as possible.

Chris J - in recent years there have been a lot of civil service and Stats Can jobs, and that's where Carleton has placed a lot of graduates. The Bank of Canada mostly hires internationally these days (they regard themselves as one of Canada's leading economics departments, and recruit in a similar way.) Unfortunately the civil service and the Bank of Canada don't have calendars where all people's credentials are listed like a lot of universities do, and doesn't allow staff to create their own websites full of fun personal details, so it's much harder to get this info for people outside academia.

[genauer]

For PPP calculations,
there are companies out there, who provide this service, for a small fee, even region wise and incorporating family size.

When I was hired to the US, I got a one page calculation, how a german salary is converted in a US.

Jacques, you just got an enthusiastic follower of the 5 star movement on ratemy.
They did not even ask for what lecture, and where, that is about.

On this site, you can easily be abused, you will get much more often extreme ratings, and statistically insignificant.

A quarter century ago, when we ( students) started the "Vorlesungsumfrage" ratings, we printed the questionaire on very cheap grey eco friendly paper (= hard to get, and shows as copy : - ) and distributed them in the lecture, to be collected the next time, or at the end of it.

a) you prohibit outsiders to influence the ratings
b) you get statistically significant ratings
c) you get people in a regular mood

I had printed that originally in a machine readable way, but spending hours in trying to get the machine read them in high enough quality, I did a short calculation, and typing it in, is actually done very quickly.

We also counted how much questionaires we had handed out, how many people actually attended the lecture, and the feedback fraction also tells you something.

In the company, it was one of the meanest things to do, to not rate somebody, after being requested.

360 degree survey's were mandatory before certain promotions.

In the US I was shocked that I got basically only straight A's, until my manager told me, that this is more the typical style.

In Germany we still go a lot more with kind of doing a normal distribution around 2.75 on a scale of 1 - 6.

So, clarification of the distribution to be used is needed as well.

Your Cegep looks pretty interesting, and I doubt that Krugman would be useful there.

There is in the moment a lot of discussion going on, about the appropriate education, german apprenticeships,

http://www.oecd.org/education/skills-beyond-school/48630299.pdf
do all the offers at CEGEP count as "tertiary" ?

If you take a look at Box A1.1. Vocational education,
high numbers are associated with AAA ratings, and Canada the outlier : -)

Do you have a good description, with many statistics, curriculums, etc. of CEGEP in english?

[tyronen]

*Every* post-secondary program should be required to survey its graduates for employment and earnings. Prospective students should be able to compare the average salary, employment rate, and the percentage of graduates employed in related fields across schools. It should be easy to do a cost-benefit analysis.

And yes, the Ministers should shut down half of Canada's PhD programs. They are just cheap labour to be exploited by professors.

[Frances Woolley]

tyronen - bad rankings can be better than no rankings. E.g. women usually earn less than men, and have a lower labour force participation rate, hence any department/university with more women will have, on average, lower earnings and lower employment rates. This, however, says nothing about how well a person is likely to do *all else being equal*.

But I do worry about people choosing to do a PhD without good information about the costs and benefits.

genauer - interestingly the rate of vocational training is much higher in Quebec than in the rest of Canada (where the CEGEP model does not exist). Here is a Canadian report that gives numbers comparable to the OECD ones at a provincial level: http://www.statcan.gc.ca/pub/81-582-x/81-582-x2012002-eng.htm

[genauer]

@ tyronen

your demand "survey its graduates for employment and earnings" is practically too difficult, and easily massively biased towards large, existing programs.

To your request to shut down PhD programs.

Our view here is, that the government has to protect the weak, sick.
e.g. AGBs (allgemeine Geschäftsbedingungen, not sure that "standard form contracts" really is equivalent) are there, to protect people, especially in low size, standard buy situations from being exploited.

The one percent going for a PhD, or having one and a MBA, like me, which counts towards the former "Vollkaufmann", should NOT be infringed on signing deals, how they see it fit.

If I want to bet on the spring 2014 shoesize of the german chancellor times bloodpressure the canadian prime minister divided by the RGB color coding of Michelle Obama (LOL, thats too boring black, so I go back to original thought: Frances : - ), this is my business.

[Angelo Melino]

Your estimate of 71 PhD students at the University of Toronto is a bit high, at least if you are trying to think about how many students are out there compared to the number of jobs.

Our website continues to list PhD students until the first July after they have defended their thesis (or notified us that they have decided to abandon their pursuit of the PhD). Most students go on the job market before they have defended their thesis, and at least 8 have moved on from graduate school but are included in your count of 71 (if you follow the link http://www.economics.utoronto.ca/index.php/index/graduate/placement you can see who got a job in a previous year but still is counted in the count of 71).

It may be easier to think about flows than stocks. Some of the 71 students in their first or second year will not make it to the PhD job market. We typically graduate about 8-9 PhD students per year (attrition is highest in the first two years of the program--in part because students receive signals about their relative performance or learn more about their preferences).

FWIW, although we've had some great PhD graduates in the past (greetings in particular to Stephen, Kevin, and Anindya), our academic placement record has noticeably improved over the last three years. And we're kinda wondering why...

[Frances Woolley]

Angelo - your point that the calculations are a bit rough-and-ready is well taken.

But let's say the approximate flow of new assistant profs in Ontario is say 109/5 or about 22 per year - and that's based on a period of relatively high hiring. Adding together U of T (8 or 9), plus Queen's, Western, McMaster, Guelph, Carleton, U of Ottawa, York, and all of the other PhD programs has to give well over 22 per year. It's pretty clear that there are more Ontario grads than there are Ontario jobs - even ignoring the fact that Ontario grads are the minority of new Ontario hires.

What this means is that grads from Ontario econ programs have to be looking for jobs outside of Ontario economics departments. It's really important for anyone contemplating a PhD program to understand that it's a global market place. This means that the best choice *especially if you want to move back home close to family and friends* is to go to the best program you can possibly get into, whether that's in Ontario, CAnada, the US or elsewhere.

It also means that Ontario universities should be paying very close attention to the rise of English language Asian universities in Hong Kong, Taiwan, etc., because those schools are building good programs, and going after the international PhD student market.

As to why your academic placement record has improved - I strongly suspect that what's really happened is that the private sector/think tank/bank/finance placement record has worsened, making teaching at UPEI and hanging out on those beautiful sandy beaches suddenly seem much more appealing.

[Angelo Melino]

Frances

Yes, I agree it's a global market for PhD students and that hasn't changed since I was a grad student (circa 1981).

"As to why your academic placement record has improved - I strongly suspect that what's really happened is that the private sector/think tank/bank/finance placement record has worsened, making teaching at UPEI and hanging out on those beautiful sandy beaches suddenly seem much more appealing."

Quite the contrary. Our students have been getting better job offers!

[Jacques René Giguère]

genauer: do cegep count as tertiary? Yes. That's confusing for out -of-province commentators ( the usual ed page ignorants...). Half of our students are in technical ( not trade, plumbing is secondary ( high scool) the other half is doing what Americans call "college" , before entering professional schools. But we do it in 2 years instead of four. The Canada U.S. Free Trade Agreement Chapter 15 Annex 1501 Schedule 2 list College Teachers ( and it has been clarified it include Cegep) alongside University Teachers for the purpose of mobility between the two countries. Not that it will help me trading places with Krugman...

Frances: currently, Western World universities are in a kind of banking system. In the same way that developped countries get bond investment from third world savers and send it back in equities and pocketing the difference.
First-world universities, the U.S being first world to Canada etc, get the best students, keep the cream and send the rest downward (Canadian universities, Bangladesh, junior colleges,industry...)
IIRC, there are 138 ( or is it 128, don't have the time to check) US. universities have Ph.D program. They recruit 60% of their staff from 6 universities and 80% from 12. Essentially, every students outside the top 12 is losing it's time and should become a bus driver, way better pay thanan eternal adjunct...It's a kind of ,no it is , a Ponzi scheme.

[Frances Woolley]

Jacque Rene - I prefer to think of it as a Prof-zi scheme.

Do you have a reference for those #s?

[Jacques René Giguère]

Numbers: saw them on a (good) blog a few weeks ago, but it wasn't in an area of main interst to me so it didn't seem important enough to bookmark. Do we have an ace searcher here? ( that would be a job for Determinant maybe?)

Maybe got there through Marginal Revolution or Mark Thoma. It may have been during early winter when there was much posting about MOOCs but I am not sure.Sorry.

[Patrick]

Frances, Jacques: It was Marginal Revolution. Here you go.

[Giovanni]

"But I do worry about people choosing to do a PhD without good information about the costs and benefits."

And with good reason. One might even ask...if an economics student, from lack of statistical sophistication, analytical skill or just-plain obtuseness, makes the poor decision to enroll in a Canadian PhD program - especially a program administered by one of our less distinguished departments - and persists in carrying through to the bitter end, throwing good money after bad all the while, should that person ever receive a PhD in economics?

Call it "Giovanni's Paradox"...

[Frances Woolley]

Giovanni - a PhD in econ is not a totally bad investment. There are jobs other than academic jobs, and one has to work out the opportunity costs also - which in the current market may be low. (I was chatting with a friend once who's a humanities prof, and marvelling a the determination she must have had to carry through with a PhD in such an unmarketable subject. She said "Oh, no, it was better than waitressing.")

There are things one can do to improve one's chances of getting hired, e.g. choose a field that's marketable in policy or business schools. Grad programs are also a really great way to make a transition to Canada - our PhD programs bring in the best and the brightest, and give them Canadian skills and training. They're outstanding immigration programs.

But I know that I personally was unrealistically over-optimistic about my chances of getting an academic job. I did get one in the end, but it wasn't as easy as I thought it was going to be!

[Giovanni]

Frances,

I think we'll have to agree to disagree on this one. I see the proliferation of PhD programs to be the result of terrible public policy, and the proliferation of PhD students a texbook example of rent dissipation. With a couple of wrinkles.

The first - as you correctly suggest - is the tendency for ambitious, academically-minded young people to seriously overestimate their chances of securing a university position. I commend your efforts to get students to face the facts on this. I wonder, however, whether facing the facts will be enough - this may be one of the situations where a paternalistic "nudge" is required.

Foreign students are the second wrinkle. You write "...our PhD programs bring in the best and the brightest, and give them Canadian skills and training. They're outstanding immigration programs." There is, I think, a less sanguine way of looking at this. Begin with the moral issues raised by stripping developing countries of their best and brighest. Then consider the distortionary effects of saying to already-educated people who want Canadian citizenship "your chances will be much better if you spend a few years cooling your heals in one of our third-rate PhD programs". Finally, they may be good transition programs, but we can surely do better - wouldn't an new-Canadian professional from Beijing typically be better off intensively studying English/French than Dynamic Stochastic General Equilibrium models?

We've manage to create a situation in this country where academic labour is chronically oversupplied - mirculously, without much deterioration in academic salaries or working conditions. And even this vastly understates the problem, since most of the teaching done in Canadian universities does not require PhD-level expertise - as universities demonstrate daily when they assign core undergraduate courses to non-PhDed sessional lecturers.

[Frances Woolley]

Giovanni: My only point is that it's not a simple black-and-white decision. Sometimes a PhD is a good investment, sometimes it's not. One of my PhD students, for example, is working full-time while doing her research, and she's able to find enough complementarities between her jobs and her thesis that she can make some progress on her thesis while doing her day job. Even if she doesn't get an academic job at the end of the day, she's moving ahead in her career and enjoying herself. Another student has a well-paid professional career that leaves him with enough free time to take up econometrics as a hobby. The costs and benefits of doing a PhD are very idiosyncratic.

"We've manage to create a situation in this country where academic labour is chronically oversupplied - mirculously, without much deterioration in academic salaries or working conditions. "

The privileged few in tenure or tenure track jobs have seen pretty steady salaries and working conditions (so far). I don't know precise numbers in terms in terms of the % of courses/students taught by tenure stream faculty as compared to contract instructors, but my sense is that the deterioration in salaries/working conditions has been passed onto contract instructors, who are bearing the brunt of the transition. (Most contract instructors do have PhDs b.t.w.).

But, yes, when I write doom-and-gloom posts about the university sector, these are the kinds of issues I have in mind.

[Frances Woolley]

Giovanni - but it's like the Canadian labour market in microcosm, isn't it - an oversupply of highly trained domestic labour, and *still* we're bringing in foreign workers. Filling probably about half the new assistant prof jobs with foreign workers.

[whitfit]

Giovanni says: "The first - as you correctly suggest - is the tendency for ambitious, academically-minded young people to seriously overestimate their chances of securing a university position. I commend your efforts to get students to face the facts on this. I wonder, however, whether facing the facts will be enough - this may be one of the situations where a paternalistic "nudge" is required."

Referring to this, but also other parts of the above discussion, I wonder if it is too difficult to tell a priori who will be a productive and interesting researcher, and that in order to get a few "stars" you need to grind through a lot of bodies. This is not unlike other markets for talent or products - most entrepreneurs fail, most kids don't get to the NHL. Might there be a good social return to this oversupply of academic talent? And maybe this is only achieved by having most of them have unrealistic expectations that they live in Lake Wobegon.

Granted, a big part of the job of academics is teaching, and the talent for that is probably differently (though maybe, or maybe not more evenly distributed).

To the extent the people that don't make it (who are probably still smart and capable) can go work in banks, government or other sectors and that they can use some of their skills, that is all for the better as an "insurance policy" against not being one of the stars.

In any event, it isn't clear to me that it is such a travesty to have so many PhD spots any more than it is a travesty that so many businesses fail, or so many kids don't make it to the NHL. I, on the other hand, went into a different profession after doing an MA in econ, as I realized I wasn't going to be one of those stars...

[b]

I think Giovanni comments are a bit too condescending...

I hope it does not reflect the depth of his thoughts....

[Giovanni]

No need to fret, b...my thoughts are so deep they are, for most practical purposes, bottomless. But thanks for your concern, all the same.

[Frances Woolley]

whitfit - actually I do figure it's a travesty when young kids suffer injuries that will affect them for the rest of their lives in the pursuit of vain dreams/profits for others - this has been an issue in the news with the NCAA recently, also is an on-going issue in minor hockey. George Laroche (spelling - you know that big gentle Haitian guy who used to be a major enforcer) has been doing some work on attempting to press for better working conditions for OMA etc players but with no luck.

[genauer]

I enjoyed the link from Patrick !

"Jesus didn’t have a Ph.D in Econ either, and was able to overcome diminishing returns to scale with the loaves and fishes experiment."

maybe something with some similar fun:

http://www.spiegel.de/fotostrecke/lustige-pruefungsantworten-von-schuelern-fotostrecke-95715-10.html

dont forget to scroll back and forth !

[Giovanni]

And there's a broader issue here, having to do with the general social-efficiency properties of winner-take-all-type competitions, where a few "prizes" are claimed by a minority of competitors who turn in the best performances. Substantially reducing the number of people allowed to pursue PhDs would likely reduce the average quality of new assistant professors eventually hired. But the social value of this effect may be quite small. (Imagine a situation where the people hired have only, say, 5% more potential as teachers/researchers than the rejected applicants.) Whereas limiting enrollments may produce a much larger cost saving from time/effort better spent by those who would otherwise be PhD students in the hunt for academic positions. Exactly the same logic as the famous "fisheries problem" in resource economics: I put out to catch fish (start a PhD) thinking only of my potential gains and oblivious to the fact that by doing so I am reducing your chance of catching any of the limited number of fish (assistant professor appointments) available...result: too many boats (PhD students), from the viewpoint of economic efficiency, on the fishing grounds.

[Bob Smith]

"Jesus didn’t have a Ph.D in Econ either, and was able to overcome diminishing returns to scale with the loaves and fishes experiment."

Sure, but that was 2000 years ago, what's he done since?

"In any event, it isn't clear to me that it is such a travesty to have so many PhD spots any more than it is a travesty that so many businesses fail, or so many kids don't make it to the NHL. I, on the other hand, went into a different profession after doing an MA in econ, as I realized I wasn't going to be one of those stars..."

I think that that's a fair analogy (and reflects my experience). However, the parallel breaks down to the extent that graduate students are publicly subsidized. If you start a business or spend years playing in the AHL, you bear all of the costs of that decision. On the other hand, if your education is subsidized, than you're likely to pursue education beyond the point where the benefits outweight the costs (possibly turning down other, potentially more socially rewarding, opportunities).

[genauer]

I think that the distribution of various prof degrees actually looks pretty much like I think it should be. But because I read too much, I cant do the "double blind" anymore.

I also tried to think back, why I did my PhD (in semiconductor physics) many years ago. Curiousity, maybe finding something nobody saw before, but that a) it was enough money per month in the short run, and b) it doesnt hurt economically, in the long run, was also necessary. I never inherited one cent, all I have comes from my own labor.

With a PhD from some place we think to be at least as good as Stanford, I didnt have any problem to work a machine on the shop floor in a saturday night shift, when there was a need, and the saturday and sunday morning shift were worked by other PhDs.

But it looks to me, that the structural problems with youth unemployment in some other countries come to some degree from mis educated people with an attitude.

And I do nowadays clearly despise this "elite" concept of ivy league places.

Bob, I am since decades a die hard infidel. But sometimes I like to cite scripture, the bible (Matthew 25:40), the red bible (punish one, educate 100), the Romans,and the Nibelungs, whatever is suitable for the task at hand : - )

[Determinant]

Giovanni - but it's like the Canadian labour market in microcosm, isn't it - an oversupply of highly trained domestic labour, and *still* we're bringing in foreign workers. Filling probably about half the new assistant prof jobs with foreign workers.

Ah, one of the key issues of our time! I find it preposterous that our education agenda (paid in significant measure by taxpayers) works at odds with parts of our immigration programme. And the tax money just gets wasted in the process.

We really need to stop listening to businesses whining about a labour shortage. Until I see wages going through the roof, there is no labour shortage. Statistically we can't find much evidence of a labour shortage either. It's just anecdotal and IMO it's really a cover for simple labour arbitrage.

Temporary Immigrant Workers are also at a disadvantage; their status in Canada is tied to their job. Unlike Permanent Residents and Citizens, they can't quit their jobs if they boss is bad/pay is withheld/they find something better. If they do they have to leave Canada. The ability to walk is one of the key protections for any worker. Its absence sets these people up for exploitation.

Lastly, business really needs to understand what competitive advantage means. You can't expect to get a perfect employee of the street who understands your business model perfectly, not if you have a genuine competitive advantage which means you have something unique to your firm: a method, a product, a clientele, whatever. There is no substitute for actual training on the job.

We also need to crack down hard on the abuses of "contract" labour. Many of these people are in substance employees but without the benefits and protections of labour law. Firms pressure them to incorporate and take tax deductions for business expenses, which the CRA frowns on. I am firmly against a two-tier employment structure.

[Frances Woolley]

Going back to Angelo's point earlier, I'm wondering if the higher placement rate of U of T students reflects an increase in the quality of students U of T is attracting due to an increase in Toronto's reputation relative to Queen's and Western.

[Giovanni]

Wouldn't the rise in Toronto's reputation in itself be a big part of the explanation? People now see a Toronto PhD as having the same marquee value as a degree from UBC or a top second-tier US department?

Could be sorted out econometrically, I think. If it's a departmental ranking effect it should be reflected immediately in better placement rates. If it's a quality-of-student effect there should be a considerable lag reflecting at least the gestation period for new PhDs and possibly as well inertia in student's choice of program.

[Jacques René Giguère]

Determinant: immigration and free trade are both sides of the same coin. Would there have been as much outcry if the work had been outsourced ( the synonym of import but few people mind when we outsource oranges..)? As long as there is unemployment in India, the world shadow price of anything an Indian can do drop to zero.
And we do use immigration and outsourcing and temporary foreign worker to keep down wages and increase the loot of the 1 % ( sorry to "stabilise output on the trend by Inflation Targeting."

[Joel W]

whitfit says: "To the extent the people that don't make it (who are probably still smart and capable) can go work in banks, government or other sectors and that they can use some of their skills, that is all for the better as an "insurance policy" against not being one of the stars."

I think this is an important point. As someone who did their Econ PhD at (as Giovanni put it) "a program administered by one of our less distinguished departments", I can say that this is true.

Guelph's program is relatively small, so it was easy for me to do a quick search to see where grads ended up. Since 1995, there have been ~32 Guelph Econ PhDs, 38% have academic tenure track or tenured jobs at Canadian universities, 19% have academic jobs at universities outside Canada, 25% work for Canadian governments, and the rest have jobs in the private sector.

With an econ MA and 4 years work experience you could probably have a similar (or higher salary) in government or the private sector as with a PhD, but you would have zero chance at an academic tenure track job.

[Frances Woolley]

Joel, interesting, that's higher than i would have anticipated.

The post 2000 period was a great one for academic hiring - my guess is that the placement rates going forward will be a good bit lower.

Note also that Guelph did as well as Queen's in the period I'm looking at, which personally I found somewhat surprising given that I, like you, would regard it as one of our less distinguished departments. One or two good professors who are attracting good students and placing them well can make a significant difference in a university's placement rates.