Should Economics be Treated Like a Professional Degree?

Fabio Rojas, a sociologist and blogger at org theory, thinks econ PhDs should subsidize other grad students because economists do better financially than other social scientists. Thus, they should be treated more like MDs, law students or MBAs.:

Economics has shifted from lowly paid arts and science to well compensated professional field. Consider the following: In an article on the crummy academic job market, the Wall Street Journal reports on a University of Arkansas study that shows that entry level econ PhD’s make $86,000 (scroll about half way down). That’s right - an average econ PhD with few (or no) publications makes the same as a full professor in many arts and sciences areas. If an economist lands a job at a leading program, the assistant professor salaries easily start at $100,000+. B-schools start even higher. In the private sector, consultancies and related work are better compensated.

Let me emphasize this: professional economists do better than nearly any other arts and science field (except maybe computer science) and do well compared to lawyers and MD’s.

Economists make more money than other social scientists for several reasons. First, the median economist has better quantitative skills than the median social scientist, and the market tends to reward those skills higher relative to qualitative skills. Second, some economists can teach finance at business schools, which I believe pays better than what a sociologist or psychologist would earn at a business school (is this true?). Third, there are many other alternatives for top economics talent, like Wall Street, which pay way more than academia, although they are no longer strictly research jobs (compensating differentials and all that). Add to that more opportunities in consulting and private sector work and you generally have a much more lucrative field. Fourth, since economics is usually the largest undergraduate social science major, it makes sense to have more TAs and research assistants to help with the large class sizes. Oh, and it's not like economists produce shoddy academic work either.

Note that Fabio doesn't specifically say that economists should subsidize other grad students, but that's about what this amounts to. So should they? It strikes me as odd to say that because there is more demand for economists than english professors we should charge economists more. In fact we should limit the number of awardees in fields that have low demand. I really don't see why we need to limit the number of econ PhD's that we grant. It is certainly not like other fields where the excess supply is dampening wages.

Finally, in terms of equality, our progressive tax system insures that economists pay more in taxes. This may not equate salaries at universities, but I see no reason why they need to be equal. If historians want to make more money, they should pay attention to cartel behavior and produce fewer history PhDs. At UCLA, my undergratuate alma mater, the history dept is much larger than the political science department. You can guess which dept has better placements. There are lots of good comments to Fabio's post so be sure to read those as well.