Early Career Paths of Economists Inside and Outside of Academia

Economics job candidates face considerable professional and financial uncertainties when deciding between academic and nonacademic career paths. Using novel panel data, we provide a broad picture of PhD economists’ early career mobility and earnings growth–both in and outside of academia. We find that academic jobs have fallen to just over half of US placements, with growing shares in tech, consulting, and government. We document considerable early career job mobility and higher earnings growth among job changers, private-sector economists, and men. We also find an earnings premium for graduates of top-ranked PhD programs that grows over early career years in academia while shrinking in the private sector. These different earnings dynamics mean the opportunity cost (in terms of potential earnings) of remaining in academia is generally less for graduates of top-ranked programs, although there is significant dispersion in mid-career earnings among these academics.