Planning for Your Ph.D. in Economics

There are several different types of programs that offer the Ph.D. in Economics. Choosing the right one for you is not always easy and will take research and some soul-searching. If reading this page does not dissuade you from pursuing your Ph.D., make an appointment soon to talk to your favorite economics professor.

What can a person with a Ph.D. in Economics do? Almost anything. The world is run by Ph.D.s in Economics. Well, that’s a little bit of an overstatement, but not that much.

Ph.D. economists are employed in research, policy development, policy evaluation, and regulation in the public sector in many state and federal agencies, including (but not limited to) the Department of Treasury, Department of Commerce, Department of the Interior, the Department of Labor, and the Department of Education. Agencies within the cabinet-level departments employ economists—for example, the Environmental Protection Agency, the Bureau of Labor Statistics, and the Census Bureau all have large numbers of Ph.D. economists on staff. The Federal Reserve Board and Banks employ economists in both research and regulation.

Ph.D. economists are employed in a wide variety of positions in the NGO/non-profit sector at think tanks, the World Bank and the International Monetary Fund.

Ph.D. economists are employed in the private sector in business and consulting, doing a very wide range of jobs.

And, of course, with a Ph.D. in Economics you can teach and do research at a college or university.

The graduates of the Ph.D. program in economics at American University mainly work in government agencies in the U.S. or in their countries of origin and in NGOs. A relatively small number of AU Ph.D.s hold academic positions in colleges and universities, especially at schools where a heterodox (not exclusively a mainstream economic) approach is appreciated.

The higher the rank of the Ph.D. program, the greater the greater the range of choices. The criteria for admission to top-ranked economics programs are straightforward. They will ask:
(1) How high is your quantitative score on the GRE?
(2) How good are your recommendations?
(3) How thoroughly do you understand advanced mathematics?

Top-ranked economics programs require training in mathematics that goes well beyond what is necessary for the BS or MA in Economics. Three semesters of calculus plus linear algebra (MATH-310) are generally the minimum. That’s minimum. It is unlikely that a student without these math courses on the transcript will be admitted to a top-ranked Ph.D. program. For information on ranking, please visit here, here and here, and visit here for student comments on rankings.

Today’s investment in advanced math courses will have high returns in graduate study in economics. Take differential equations (MATH-321). Learn how proofs are constructed (MATH-500; MATH-520 AND 521 wouldn’t hurt). Study topology (MATH-540).

Studying probability theory and mathematical statistics is a good idea, too. Try STAT-502, 530, 531, 584, and 600.

Put it all together and you have yourself a minor in Math or Statistics or even a double-major. It’s not just professors who think all this math is a good idea; current graduate students in economics programs think so, too.

A final word on graduate programs and money: most undergraduate students are aware that professional programs (law, medicine, social work, business administration, etc.) are expensive. A Ph.D. program, however, is a little different. Most Ph.D. programs in economics (and many other disciplines) offer fellowships and assistantships. A fellowship is when you get paid a stipend to go to school; being a student is your job. An assistantship is a job at the university (usually in your department) helping with teaching or research. Fellowships and assistantships generally come with tuition waivers. That is, when you choose a Ph.D. program for which you are adequately prepared, you should incur no major direct costs. (Sizable opportunity cost still exists. Fellowships and assistantships, even including a tuition waiver, are not likely to equal the salary you will forgo for the joy of study.)

In general, if a student is admitted to a Ph.D. program, but the program does not make an offer of a fellowship or an assistantship, they should consider it a signal that he or she is one of the weaker students admitted to the program. There are important exceptions, however. Some of the most highly ranked programs (for example, the University of Chicago) do not provide funding for first-year graduate students, no matter how promising the student may seem. Students who do very well in the first year are offered funding for the second year.