Economics may be known as "the dismal science," but the job market for economists is anything but dismal. In fact, it's booming.
The total number of new jobs listed in Job Openings for Economists, a Web site sponsored by the American Economics Association and the main site for employment opportunities in the field, rose to 2,650 in 2000 from 2,389 in 1999, a gain of nearly 11 percent. Since 1996, the number of new job listings has nearly doubled.
"It's really a hot market," says Robert M. Schwab, a professor of economics and director of graduate studies at the University of Maryland at College Park. "It's just the right field to be in right now."
Unlike the academic market in the humanities, there's no huge backlog of unemployed Ph.D.'s. "We never have this incredible excess supply of people who are looking to get academic jobs," says Mr. Schwab. "There are just too many other outlets for these people. Many wind up in government. Many wind up in international organizations such as the World Bank and the International Monetary Fund. There are just a lot of terrific jobs for economists outside of academia."
According to the A.E.A., which is holding its annual meeting January 5-7 in New Orleans, the job options for economists expanded in 2000, both within academe and in the outside world. John Siegfried, who as secretary and treasurer of the association keeps a close watch on the employment situation for economists, notes that the proportion of nonacademic jobs posted on its Web site rose nearly 20 percent last year, to 1,015 from 849 the previous year. Meanwhile academic job openings were up by more than 6 percent, to 1,635 in 2000 from 1,540 in 1999, says Mr. Siegfried, who is also a professor economics at Vanderbilt University.
The academic job market for economists is further strengthened by the high demand for Ph.D.'s in departments other than economics, says Edward A. Miguel, an assistant professor of economics at the University of California at Berkeley. Other university departments and schools hire economists, he says, including business schools, public-policy schools, political-science departments, even public-health schools.
It's no surprise that some of the hottest specialties in economics are those with the most outside employment options. There's a greater demand for people who specialize in international finance, says Richard J. Arnould, head of the economics department at the University of Illinois at Urbana-Champaign, because "they can go to business schools and be in finance departments, where they get very high pay, they can go to Wall Street and get extremely high pay, or they can go to economics departments and get economists' salaries."
Similarly, everybody wants a health economist these days, says Mr. Schwab, who notes that the job possibilities for health economists range from medical schools and public-health schools to government agencies and private research and consulting firms. Subfields like econometrics, industrial organization, labor economics, international trade are also strong this year.
However, the good times aren't limited to people in those subfields. "In our department -- and I don't think we're in any way an exception -- everybody gets a job," Mr. Schwab says. "In fact, many people wind up with several offers."
Mr. Miguel, the Berkeley economist who earned his Ph.D. from Harvard University earlier this year, agrees. He had 20 interviews at last year's annual A.E.A. meeting and 9 campus visits in the month after the meeting. "I think for people at top-10 programs, having 20 interviews is not exceptional at all. Actually, I remember telling one faculty member [at Harvard] last year that I had 20, and he said: 'You only have 20? Why don't you have more?'"
The seller's market in economics is good news for job seekers, but it's not necessarily good news for departments that are hiring. Although many department heads say it's not any harder to hire people this year than in previous years, they agree that they're paying a premium to attract good candidates.
"We wind up paying much more than we used to," Mr. Schwab says. "I would guess that in 2001 the starting salary for a brand new assistant professor will probably be in the low seventies. It'll be a great time to be starting out, that's for sure. And there will be all kinds of extras thrown in. I wouldn't be surprised if they got a couple of summers' worth of support and a course release each year for the first three years and a nice computer and so on."
"Economics teaches that prices change to equate supply and demand, so the way I would put it is to say that the salaries of entry-level economists have risen pretty sharply in the last couple of years," says Maurice Obstfeld, chairman of the economics department at Berkeley.
Despite the increased expense, "I think everybody's hiring," says Mr. Arnould, who says he plans to hire three, possibly four, junior people this year -- one or two labor economists, a trade specialist, and a specialist in empirical microeconomics. Mr. Schwab at Maryland says he's planning to hire a junior faculty member and four senior scholars. The junior position and one of the senior positions are open searches -- for the best candidates in any subfield. The three remaining senior openings are in the areas of labor economics, finance, and development. At Berkeley, Mr. Obstfeld says, he wants to fill two junior positions, and he's made job offers to four senior candidates.
Many economics departments conduct open searches for the "best people," but that creates intense competition for top graduates, says Mr. Miguel. "If school A thinks you're really great and they fly you out and make you an offer, then school B is going to be more likely to compete for you. A lot of schools are going after the same top tier of candidates."
Fueling the demand is a falling supply of new economics Ph.D.'s. Compared to 1997 -- when there were 1,177 Ph.D.'s minted -- 1999 saw a drop of nearly 9 percent, to only 1,076, according to a forthcoming report by the National Science Foundation.
"People who in other times would've applied to Ph.D. programs in economics are just finding that they can make a fortune without fooling around for five years in a Ph.D. program and living like a peasant," says Mr. Schwab. "It's hard."
There is, however, a sharp uptick in the number of international students enrolling in Ph.D. programs in economics, caused in part by the movement in many countries -- like those in Eastern Europe and Asia -- toward a market economy. Andrew McLennan, a professor of economics and director of graduate studies in the economics department at the University of Minnesota-Twin Cities, notes that of the 20 or so people admitted to his program each year, only one to three of them were Americans in recent years. Mr. Schwab says he sees a similar trend, noting that 88 percent of the applicants to his Ph.D. program in economics last spring were international students.
While economists are reluctant to make long-term predictions, many of them are optimistic about the future. Their optimism seems to have trickled down to the job seekers in the field, says Mr. Miguel.
"Even though economists get stressed out before they go on the job market, just like everybody else, there isn't a sense of gloom about it," he says. "I think people are generally pretty optimistic that if they work hard and write a decent thesis they're going to get a decent job. And, usually, it works out that way."