THE ECONOMICS OF PROFESSING ECONOMICS. I'm not sure what the economics departments are doing differently from other disciplines, such that their Ph.D.s face better odds in the job market and in the face of state-mandated retrenchments, administrators must devote some of the resources they'd rather apply to expense-preference behavior to keeping economists from leaving.

Professor DeLong notes,

Economics Departments appear to have made a conscious collective decision (I still can't figure out how) to downsize their graduate programs in the 1970s--to accept smaller numbers of teaching assistants and larger class sizes in order not to be churning out Ph.D.s for which academic jobs would be absent. Then the explosion of business schools created a large additional demand for economists. Then the expansion of world finance created a host of other jobs--in the Federal Reserve, at the IMF, in private-sector banks--that economists could fill.

That last sentence confirms what the anonymous community college dean suspected about private employment opportunities for Ph.D. economists. The "conscious collective decision" might be no more than an upward-sloping supply curve at work. I started graduate school in the mid-1970s (applied to four programs you'd recognize, got into three, had offers of aid from two.) All I can tell you is what went down at Wisconsin, where the admissions and aid committee made fewer offers of aid as the soft money dwindled (reduced spending on poverty research, fewer grants funded by National Science Foundation.) To some extent that committee may have attempted to extrapolate likely demand for courses requiring teaching assistants over the four years entering students might expect aid. Other departments might have made similar calculations, but that's a purely neoclassical response to changing incentives. No cartel is necessary.

Focus, now, on this statement from Dean Dad.

The big state universities couldn’t survive if they paid full-time salaries to everybody who teaches freshman comp.

Phrase it slightly differently.

The big state universities would be hard-pressed to offer the same in-state tuition discounts if they offered 40 person sections of their core courses taught by regular faculty with research opportunities.

That includes introductory economics. Economics is rarely a major of first choice for people. Sure, there are the Alan Greenspan wannabes and there's nothing like an energy crisis to get people listening, but the reality for economics faculty at any institution with an undergraduate business program is the provision of lots of spaces for pre-business students to complete their economics prerequisites. The term of art the college uses is "service" courses, which those of us with some knowledge of animal husbandry find slightly amusing.^(*) The situation is not much different at institutions with no undergraduate business program. Students have a greater propensity to do an economics major because they perceive it as somehow cognate to business (it isn't). Getting the more careerist of those majors excited about the finer points of game theory or the Welfare Economics Paradigm is a struggle. Where the undergraduate business program has admission standards, the economics program serves that cognate purpose, with a somewhat different set of motivational challenges. As business enrollments grow, more students take the service courses. As business admission standards tighten, more students pursue the cognate major.

So how, then, to cheaply offer lots of slots for those principles students? On one hand, the department could hire lots of tenure-trackers whose primary task is to offer two to five sections of introductory economics a semester, and charge a high tariff, or, if a state university, hit the legislature up for a bigger subsidy. On another, the department could hire fewer tenure-trackers, rotate the responsibility to staff the service courses, find large rooms to offer them, hire apprentices to handle most of the routine questions and the grading, and use the proceeds to subsidize opportunities for those tenure-trackers to occasionally conduct an advanced class with somewhat more connections to the cutting edge of economics research, where there is no dearth of interesting, incompletely answered questions. (I think we have to appeal to one of those Japanese demons with more than two hands here, as there are other models available.)

The second approach is one more likely to appeal to aspiring faculty members. The service courses become a necessary evil one can be induced to do with the promise of additional merit money for larger enrollments (our approach) or overload adjustments (the large course counts as two or more courses taught.) Either method of compensation satisfies overseers whose metric is enrollments or student-credit-hours-per-faculty-member. (If your metric is classroom hours per faculty member, we have ways of adapting to that as well.) The overseers get their productivity, the pre-business students get serviced, and the faculty members get to teach in their areas of expertise. (There are derivative consequences of this outcome, involving a general disinterest among economics faculty in improving the content of introductory economics courses, but that's tangential.)

It's not too much of a stretch to then set up a graduate program in any university with an undergraduate enrollment of over 10,000, using the service courses to simultaneously subsidize the graduate program and lower instruction costs. In economics, there appears to be a rough balance between Ph.D. production and hiring. The forty departments claiming to be among the top 25 turn out tenured faculty for each other, for the other Ph.D. programs, and for the more famous private colleges. The remaining Ph.D. granting departments will turn out the occasional tenure tracker for each other, for the Upwardly Mobile departments not yet ready to commit to a Ph.D., and to less-famous private colleges that sometimes have long-term working relationships with such departments. (Believe me, if you're running a department in a solid if not well-known small college, you do NOT want Harvard's or MIT's tail-end Charlie on your tenure track. There are other pitfalls, but that would be digressing.)

I'm not persuaded, however, that the existence of government and private-sector opportunities for economists suffices to explain the near-continuous market clearing of the job market for economists, and the lack of clearing elsewhere. The opportunities to offer service courses to subsidize doctoral programs appear to be better in two of the disciplines with the tightest job markets. Introductory economics is a required course for business, engineering, and a few other majors, and relatively few of those students will take additional economics. Freshman composition is for everybody, and history of some kind or other frequently turns up in the general education requirements. College enrollments have been rising. Until employers rebel against paying a premium for unproductive credentials, the incentive for people to give college a shot will be present.

Furthermore, the upper division courses in other fields offer more play value for curious students than upper division economics, where there are lots of calculus story problems with the calculus hidden.

Conclusion: why other disciplines have not balanced new production with new hires as effectively as economics mystifies me.

^(*)The college is thinking of definition (4) or (5), we prefer (12).