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Friday, March 27, 2009

The Ph.D. Glut Revisited

Folks, this may look like a blunt case of content theft, but I just don't want this article to disappear from the web one day. This article should be read by anyone before applying to a PhD program
The Ph.D. Glut Revisited
by Gary North

The economist rarely uses the words "glut" and "shortage" without adding: at some price. Other scholars are not equally wise.

A free market theory of pricing rests on the supposition that gluts and shortages are temporary phenomena. Prices adjust so as to clear a market. If this does not take place, the free market economist goes looking for evidence of state intervention.

Consider the problem of excess inventory. It is better to get something for unused and unwanted inventory than to pay for storage. So, selling prices adjust downward. This eventually eliminates the glut. The unpleasant experience also warns the producer not to do this again.

Why does a glut exist? Because of an error in prior forecasting. Suppliers believed that there would be buyers at a specific price. It turned out that there was an insufficient number of buyers at that expected price.

Then why does a glut persist? One answer: ignorance on the part of suppliers. But why should this ignorance persist? Why don't suppliers get the picture?

Experienced sellers do get the picture. The problem is a continuing supply of new sellers who are unfamiliar with the market and ignorant of the past supply-demand conditions. Or, as has been said so often, there's a sucker born every minute. There is no evidence that P. T. Barnum ever said this, but it is nonetheless true.

In the worldwide suckers' market, gamblers are the only people who are slower to learn than young adults with masters' degrees. Bright graduate students possess a pair of non-marketable skills: the ability to write term papers and the ability to take academic exams. They are also economic illiterates and incurably naïve. So, they become the trusting victims of the professorial class.


No one ever sits down and tells a newly minted college graduate about the economics of the professorate. No one tells the student about the crucial and neglected work of the person who first blew the whistle on the economics of the Ph.D., David W. Breneman. He is the Dean of the Curry School of Education at the University of Virginia. He wrote his Ph.D. dissertation on the economics of the Ph.D. It was accepted in 1970 by the University of California, Berkeley. It was based on research completed in 1968, the year prior to the beginning of the Ph.D. glut. Its title: "The Ph.D. Production Process: A Study of Departmental Behavior." Of all Ph.D. dissertations ever written, this is the only one that one that should be read by every college student who is contemplating graduate school. Of course, no one tells him. Few people have ever heard of it.

I read it in 1970. I do not recall how I came across it. I was completing my Ph.D., so I was facing the Ph.D. glut personally, which had begun in the fall of 1969. It had been predicted for the sciences by Allan Cartter of New York University in 1964. Sometime around 1966, Clark Kerr, President of the University of California, had mentioned this looming problem to a group of us in an elite student organization called the California Club. But I was naïve. I figured, "It won't happen to me." Ha!

As they say in those late-night Ronco ads, "Here's how it works!" Academic departments grow in terms of the number of students enrolled. We know from Parkinson's Law that growth is an institutional imperative. Administrators advance their careers by expanding the number of subordinates in their department. So, every academic department wants more students – students of a special kind.

Students are not of equal value to a department. The lower-division student (freshman or sophomore) does not rate highly in the currency of academic resource allocation: the full-time enrollment, or FTE. The FTE figure is what justifies the hiring of a full-time faculty member. The lower the ratio, the better. It may take 15 lower-division students to generate one FTE. It may take only eight Ph.D.-level graduate students to generate an FTE.

The more Ph.D. students a department can attract, the faster the growth of that department. This is the iron law of academia. All other economic laws are sacrificed for it, as the economist says, other things being equal.

This fact of academic economic life creates an incentive for departments to enroll lots of graduate students. It also rewards those departments that persuade M.A. students to go into the Ph.D. program.

Also, the brightest graduate students may be asked to do unpaid or grant-paid research for senior professors. The professors then publish the results of this research under their own names, thereby advancing their careers. It's the division of labor at work.


The Ph.D. glut has existed ever since the fall of 1969. The number of entry-level full-time professorial positions has remained stagnant. Few new universities have been constructed. Legislatures have resisted additional funding.

This has led to a reduction of the number of tenure-level positions. Universities and community colleges have been able to staff their entry-level positions with inexpensive instructors.

Those few Ph.D.s who receive a full-time position at a university find that they are paid much less than tenured members of the department. They are assigned the lower-division classes, which are large – sometimes 200 to 1,000 students. These mega-classes require lecturing skills that most professors do not possess. Those untenured faculty members who perform well in mega-classes are kept on until the day of reckoning: the decision to grant them tenure, usually eight years after they go on the payroll. They are usually not re-hired unless they have published narrowly focused articles in professional journals. But mega-class professors do not have much time to do the required research.

The assistant professor is now 35 years old or older. He has not made the cut. He is now relegated to the academic underworld: the community colleges. But here there is fierce competition. Community colleges hire part-time instructors at $10 to $15 an hour. These people seek a full-time position at the community college. They need that initial foot in the door: night school courses for worn-out adults who are trying to earn an A.A. degree. Their natural enemies are the newly dismissed assistant professors from universities.

Who gets an entry-level position at Boonsdocksville State University, which in 1960 was a public schools teacher training college? New graduates with Ph.D.s from the two-dozen major universities.

Then what happens to graduates with Ph.D.s issued by Boonsdocksville State? They go straight into the community college circuit.

This has been going on ever since the fall of 1969. It is great for community college administrators, who have a never-ending supply of optimistic Ph.D.-holding graduates of all but the top two-dozen universities, plus a never-ending supply of burned-out, terrified assistant professors from top universities who did not receive tenure.

If you want to understand this process, watch Ghostbusters: the scene after the parapsychology team has been dismissed from the university. Dan Ackroyd speaks for tens of thousands of Ph.D.-holding rejects who did not make the cut.

For over three decades, all it has taken to generate 1,000 applicants was this ad in a professional journal in the humanities:

Tenure-track position

Ph.D. required
Teach 12 hours of the freshman course

The salary has been almost irrelevant: not more than the average salary of the average American worker with a high school diploma.

If the ad said "Ph.D. or ABD required," it would generate 2,000 applicants. ABD stands for "all but dissertation."

Graduate students do not learn about supply and demand, and it does not pay senior professors to teach them. Here is evidence. In response to the ever-growing glut of Ph.D.'s, the American university system turned out about 30,000 Ph.D. graduates per year, 1969 to about 1975. Since then, it has increased the output. In 1980, it was 33,615. In 1990, it was 38,371. In 2000, it was 44,808. In 2003, it was 46,024. (Statistical Abstract of the United States, 2006, Table 290.) Despite this, we read on a website devoted to selling "how to get higher learning degrees" materials,

The Bureau of Labor Statistics currently predicts that the job outlook for postsecondary teachers (a job commonly sought by Ph.D. graduates) should be much brighter than it has been in recent years. Employment in that area is expected to grow by almost 40 percent by 2012, whereas overall employment is expected to grow by only 15 percent! So, if you're just starting down the track to a Ph.D. and hope to take root in the world of academia, your timing may be just right!

There's one born every minute . . . and two who will relieve him of his funds.


Most degree-granting universities are funded by taxpayers. A university used to be an institution of higher learning that was authorized by a college-accrediting agency to grant the Ph.D. Employees of all but the most prestigious four-year colleges want to be called a university. So, title inflation has matched degree inflation and grade inflation over the last 35 years.

The supply of college graduates with ever-lower academic abilities is funded by money coerced from taxpayers. The American higher education system is structured by the professorate to reward those professors who teach small classes of graduate students. So, year after year, decade after decade, the supply of Ph.D.-holding students increases, despite an academic market that does not hire most of them, and hires a minority at wages that do not compensate them for the money and time invested in earning their degrees.

They cannot teach at the high school level because their advanced degrees force the school districts to pay them too much. A teacher with a B.A. is paid a fraction of what a Ph.D. or Ed.D. is paid. The teacher unions have negotiated payment so that existing employees who attend night school and summer school at Boonsdocksville State can work their way up within the system. Being tenured, they cannot be fired. Earning a graduate degree is a guaranteed way to earn a larger salary. But no district goes looking for Ph.D.s to hire. That financial affliction is entirely generated from inside the union-dominated, tax-funded public schools.


Ph.D. students are a lot like gamblers. They expect to beat the odds. The gambler personifies odds-beating as Lady Luck. The Ph.D. student instead looks within. "I am really smart. These other people in the program aren't as smart as I am. I will get that tenure-track job. I will make the cut. I will be a beneficiary of the system."

If wishes were horses, beggars would ride. Also, if ego were marketable, all Ph.D. graduates would get tenure.

Why does any Ph.D. student at any but the top graduate schools believe that he will get tenure at any university? The odds are so far against him, and have been for a generation, than he ought to realize that he is about to waste his most precious resource – time – on a long-shot. Investing five or more years beyond the B.A. degree, except in a field where industry hires people with advanced degrees, is economic stupidity that boggles the imagination. Yet at least 200,000 graduate students are doing this at any time. Of the 46,000 who earned a Ph.D. in 2003, an equal number (or more) got to ABD status and quit. Probably more than half of the others quit before they got to ABD status.

At $20,000 or more per year in tuition and living expenses, plus the $35,000+ not earned in the job market, trying to earn a Ph.D. is a losing proposition.

In some departments, the years invested are horrendous. Breneman's dissertation went into the grim details, department by department. Anyone seeking a degree in philosophy was almost doomed to failure, yet the Ph.D. degree took on average over a decade beyond the B.A. to earn. There were almost no college teaching jobs when they finished. That was before the glut.


Earning a Ph.D. may pay off if your goal is status, although I don't understand why anyone regards a Ph.D. as a status symbol that is worth giving up five to ten years of your earning power in your youth, when every dime saved can multiply because of compounding. If the public understood the economics of earning a Ph.D., people would think "naïve economic loser" whenever they hear "Ph.D."


  1. Heaven s sake!!!! I was considering to undertake a PhD. I think I will have to think it over!!!

  2. You know, I wouldn't tell anyone not to go into a PhD program. However, if you do go, you have to understand that you are taking chances... Bleak employment prospects seems to be the reality for most academic fields.

    At least, do very thorough research on the employment prospects in the field you are planning to work in. For example, go to the Chronicles of Higher Ed web site and see how many jobs are posted for the year. And then make a rough approximation of how many people have applied to those jobs (new PhD graduates + a certain number of adjuncts + faculty who got denied tenure elsewhere). Having this rough estimation, think about whether you are willing to have those kind of odds...