The Collapse of the Econ PhD Job Market

For decades, a doctorate in economics was a golden ticket. It promised a path to tenure, or at worst, a lucrative role at a central bank, think tank, or tech firm. Not anymore. The economics job market is in freefall, and the profession’s own data proves it. Unlike most fields, economics has a bizarrely centralized hiring ritual. Once a year, in the fall, every employer posts openings at the same time. Every candidate applies at the same time. The entire profession runs through one clearinghouse: the American Economic Association’s “Job Openings for Economists” (JOE). This makes economics PhD market uniquely measurable, and the numbers are brutal. Share Job postings for PhD economists are down 30 percent in just three years The JOE data shows few jobs in 2022, fewer still in 2023, and fewer still in 2024. This year’s trajectory suggests 2025 will be even worse: Extrapolating, the 2025 market looks set to bottom out around 1,000 openings: I think my freehand projection is a very conservative approximation of reality—actual numbers may come in slightly higher or lower, of course, but this reasonably looks like what the market is on track for, barring a miracle. Just three years ago, there were 1,477 openings. The fall to ~1,000 this year will represent a 32% collapse. Most economics PhD students aren’t looking for just any job, though, they want a tenure-track position in academia. According to polling data from the 2025 Webinar on the Economics PhD Job Market, 94% of candidates from the past four cohorts reported being “very interested” or “somewhat interested” in becoming an assistant professor, dwarfing all non-academic options. Subsetting the JOE data to permanent academic positions (tenure-track or tenured) yields a nearly identical trend: openings dropped from 631 in 2022 to about 400 in 2025, a 35% decline over three years: Again, please forgive my Microsoft Paint skills: The JOE data is confirmed by Econ Job Market (EJM) data, a nonprofit 501(c)(3) whose stated mission is “to improve the flow of information in the job market for academic economists, by providing a central repository for job-market materials.” EJM data makes the pattern robust: nearly all interview invitations are sent out during a concentrated few weeks in December, and the volume of those invitations has collapsed from 3,835 down to 2,502… a 34.8% decline. As a result, the AEA’s own Job Market Committee quietly admitted in its 2025 report that last year was “challenging” for candidates. While Supply of Tenure-Track Jobs Plummets, Demand Rises EJM data show that the cumulative number of views on job ads is higher than ever, with 2025 easily on track to set a new record. That isn’t surprising: according to the 2024 NSF Survey of Doctorate Recipients, 1,385 Americans earned economics PhDs in 2024, more than in 2023, more than in 2022, and more than in 2021. You now have 1,385 brand-new PhDs chasing just 400 tenure-track jobs. At first glance, that ratio might not look catastrophic. But here’s the catch: They’re not competing only against each other. An equally large wave of international candidates floods the U.S. market every year. American universities routinely hire from London, Oxford, Cambridge, Toronto, Paris, Barcelona, and beyond. Furthermore, the new graduates aren’t competing just with their own cohort. They’re thrown into the same bucket as the leftovers from every prior cycle: post-docs clinging to hope, visiting professors chasing stability, lecturers desperate to upgrade, assistant professors stranded at second-tier schools. The “new supply” is just the visible tip; the true applicant pool is a rolling backlog several times larger. The result? According to EJM, 5,341 candidates participated in the 2024–25 market, the largest applicant pool ever recorded: Yet the AEA’s Survey of the Labor Market for New Ph.D. Hires in Economics found that only 99 fresh PhD secured a tenure-track job in America. That’s a ~7% placement rate for American PhD students. Put differently: if 100 students spend six years earning an econ PhD in America (the current U.S. median time to degree is 5.8 years, not counting the growing detour of “pre-docs”), only seven will get a tenure-track job. Even if we allow for survey response gaps and use the most charitable assumptions, the best possible placement rate for fresh Econ PhDs is likely no higher than 10–20%, maybe 25%? My methodology isn’t perfect, but no matter what, that’s still catastrophic. And these jobs aren’t evenly distributed. A massively disproportionate share go to graduates of Harvard, MIT, Stanford, Chicago, Princeton, Yale, Berkeley, and Penn. That means for every grad student outside the top 10 programs, the odds of landing tenure track are significantly less than 5%. Beyond academia is even more grim Government has long been the second-largest employer of economics PhDs, traditionally offering stable if less glamorous careers at agencies like the Federal Reserve, Treasury, Bureau of Labor Statistics, or Congressional Budget Office. But even here, the number of available positions has fallen sharply. Federal hiring freezes, budget constraints, and shifting political priorities mean that many agencies are cutting back. International organizations once served as the safety net for economists who missed out on academia or Washington. The IMF, World Bank, and OECD hired tons of econ PhDs. Today, those doors are far more scarce, and the competition is global: an American graduate is just as likely to be measured against candidates from LSE, Sciences Po, or Peking University. Oh yeah, and they have hiring freezes too: Outside academia, government, or IGOs, the tech industry used to provide a reliable fallback. Tech giants like Amazon, Microsoft, Netflix, and Airbnb built entire teams of economists to optimize pricing, design experiments, and model consumer behavior. That avenue, too, has begun to shrink. Tech hiring, which exploded during the pandemic, has collapsed. Today, demand is not just weak but structurally below trend, as firms automate more of the work that junior economists once did. ‘‘What does the modal economist, or any non CS or DS person really, have to offer to a tech firm in 2025? Not all, but many tech companies are actively downsizing and laying off tons of workers with tech experience that you have to compete against. And few firms will really care about causal inference and any other data analytics jobs can be filled by data science masters grads with deeper programming skills and cheaper salary expectations. Not to mention there is a focus on developing and using AI these days and your intro to machine learning class isn’t going to cut it.’’ — Anonymous economist The only seemingly stable landing spot left for economists is in banking and finance, but even here hiring is stagnant and remains well below its pre-pandemic trend. Counterintuitively, most private-sector banks and investment firms do not rely heavily on PhDs in economics. They prefer MBAs, statisticians, or computer scientists, leaving economics doctorates as niche hires rather than a core part of the workforce. Four Structural Reasons Behind Decline of Demand for Economics professors REASON 1: Declining undergraduate enrollment in economics Benjamin Hansen, an econ professor at the University of Oregon, recently tweeted out His department’s own data show a steady fall in the number of declared majors, which has now translated into fewer degrees conferred. National statistics confirm the trend: the number of students graduating with economics degrees is now slipping after years of steady growth. Because universities hire faculty in proportion to student demand, this drop in majors eventually trickles down into fewer faculty lines. REASON 2: The looming demographic cliff The decline in majors is compounded by a larger demographic shift. The U.S. is approaching a “demographic cliff,” as the number of 18-year-olds begins to shrink in the 2020s and 2030s. Fewer college-aged students overall means fiercer competition among departments for enrollments. REASON 3: The rise of artificial intelligence Bryan Caplan, professor of economics at George Mason University, gave ChatGPT his graduate-level Labor Economics final exam. The AI earned a “D” (this was 2 years ago), but soon enough, we all know it will be smart enough to earn an A. The technology is improving rapidly, and universities know it, and so does the private sector. Tasks once reserved for graduate students and junior faculty—data cleaning, econometric modeling, even writing referee reports—are now being automated. REASON 4: Lying About Inflation If you were there during the pandemic money printing, you remember the sequence all too well: first the confident insistence that government spending wouldn’t fuel inflation, then the soothing claim that inflation was merely “transitory,” and finally the outright gaslighting that prices weren’t rising at all. Each step was wrong, and each was delivered with smug certainty. Ordinary people—who watched their rent, groceries, and gas bills skyrocket—saw a profession more invested in protecting Democratic policy narratives than in telling the truth. The result is a self-inflicted torching of trust. Is an Economics PhD still a good deal? The answer is no. An economics PhD is no longer an investment. It is a gamble with terrible odds. A handful of winners still exist, almost all of them minted at Harvard, MIT, Princeton, or Chicago. For everyone else, the degree is a trap: six or more years of grinding work that too often ends with being overeducated, underpaid, and locked out of the profession you trained to join. ‘‘My advice is to do something other than go for a Ph.D in economics … In hindsight, my decision to go to graduate school was a mistake. My primary motivation was intellectual curiosity, and econ grad school worked against that.’’ — Arnold Kling After I wrote this entire article, I came across a similar one published last month by the New York Times: It essentially just blamed the ‘‘bull market for economists being over’’ on the same three core reasons as I did: ‘‘Universities and nonprofits have scaled back hiring amid declining state budgets and federal funding cuts.’’ ‘‘At the same time, the Trump administration has laid off government economists and frozen hiring for new ones.’’ ‘‘Tech companies also have grown stingier, and their need for high-level economists — once seemingly insatiable — has waned.’’ Much more interesting than the NYT article was this commentary on it from , a PhD economist trained at UC Berkeley: He begins by engaging with the NYT article, then runs through the same JOE data I did, ultimately landing on a similar diagnosis: the collapse is driven largely by federal hiring freezes and the looming demographic cliff. From there, though, his piece becomes more distinctive and interesting, exploring the social dynamics and internal hierarchies of the profession. His conclusion is bleak for the discipline itself, but notably optimistic about the future of Substack: Do I think the PhD job market will bounce back? Prognosticating too eagerly is a good way to land yourself a place in the Irving Fisher Hall of Forever Being Remembered For Having Said One Stupid Thing.4 A 16% fall in jobs, while devastating, is not yet apocalyptic. (By comparison, historian job ads have fallen closer to 50% since their 2008 peak.) But for things to get better requires a causal mechanism. Reinstating science and academic funding would require either Republicans to reverse their stance on the value of higher education, or for Democrats to win back the Senate. I don’t have a great sense of if either will happen.5 In this case, prediction may be less important than preparation. Placement chairs need to own up to the harshness of the labor market, and urge job market candidates to start prepping non-academic options. (Better yet, admissions chairs should consider paring back cohort sizes.) Candidates who would like a proper job after graduating should be networking, hard. And candidates resolutely committed to academia should steel themselves for long hibernations as post docs, to wait out the coming storm. On second thought, I will venture one dark prediction, for at least the near future. We’re going to see a lot more Substacks. The wager, then, is that the future of intellectual life will be increasingly decentralized. Platforms like Substack are already siphoning off the kind of energy and analysis that once flowed into journals or policy shops. As for the economics profession, the only real fix would be radical: every PhD program would have to coordinate and act like a cartel to slash admissions to dramatically reduce supply. Without that discipline, the system will keep flooding the market with useless doctorates, a Ponzi scheme destined to collapse under its own weight. Share Leave a comment