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Early Career Paths of Economists inside and outside of Academia

Author

Listed:
  • Lucia Foster
  • Erika McEntarfer
  • Danielle H. Sandler

Abstract

Economics job candidates face considerable professional and financial uncertainties when deciding between academic and nonacademic career paths. Using novel panel data, we provide a broad picture of PhD economists' early career mobility and earnings growth—both in and outside of academia. We find that academic jobs have fallen to just over half of US placements, with growing shares in tech, consulting, and government. We document considerable early career job mobility and higher earnings growth among job changers, private-sector economists, and men. We also find an earnings premium for graduates of top-ranked PhD programs that grows over early career years in academia while shrinking in the private sector. These different earnings dynamics mean the opportunity cost (in terms of potential earnings) of remaining in academia is generally less for graduates of top-ranked programs, although there is significant dispersion in mid-career earnings among these academics.

Suggested Citation

  • Lucia Foster & Erika McEntarfer & Danielle H. Sandler, 2023. "Early Career Paths of Economists inside and outside of Academia," Journal of Economic Perspectives, American Economic Association, vol. 37(4), pages 231-250, Fall.
    • Handle: RePEc:aea:jecper:v:37:y:2023:i:4:p:231-50
    DOI: 10.1257/jep.37.4.231
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    More about this item

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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