The collapse of the econ PhD job market

The economics PhD job market is experiencing a significant collapse, with job postings down approximately 30-35% in three years. This decline is particularly acute for tenure-track academic positions, which are the primary goal for most PhD graduates. Simultaneously, the number of economics PhDs awarded annually is increasing, leading to intense competition for a shrinking pool of jobs. This creates a low placement rate, especially for graduates from non-top-tier programs.

Beyond academia, traditional alternative employers such as government agencies, international organizations, and the tech industry are also reducing hiring for economists. This is attributed to factors like government hiring freezes, budget constraints, and the automation of tasks previously performed by junior economists. The banking and finance sector, while a landing spot, prefers other qualifications over economics PhDs.

Several structural reasons are contributing to this decline in demand: a decrease in undergraduate economics majors, a looming demographic cliff affecting college enrollment, the rapid rise of artificial intelligence capable of performing analytical tasks, and a perceived loss of trust in the profession due to its handling of inflation discussions. Consequently, an economics PhD is no longer a guaranteed path to a stable career but a gamble with unfavorable odds.