WORKING PAPER NUMBER CES-22-26
LUCIA FOSTER, ERIKA MCENTARFER, AND DANIELLE H. SANDLER
Abstract: While the lack of gender and racial diversity in economics in academia (for students and professors) is well-established, less is known about the overall placement and earnings of economists by gender and race. Understanding demand-side factors is important, as improvements in the supply side by diversifying the pipeline alone may not be enough to improve equity in the profession. Using the Survey of Earned Doctorates (SED) linked to Longitudinal Employer-Household Dynamics (LEHD) jobs data, we examine placements and earnings for economists working in the U.S. after receiving a PhD by gender and race. We find enormous dispersion in pay for economists within and across sectors that grows over time. Female PhD economists earn about 12 percent less than their male colleagues on average; Black PhD economists earn about 15 percent less than their white counterparts on average; and overall underrepresented minority PhD economists earn about 8 percent less than their white counterparts. These pay disparities are attenuated in some sectors and when controlling for rank of PhD granting institution and employer.
Conclusion: We have added to the literature documenting the lack of diversity in economics by providing information on post-PhD placement and earnings by race and gender for multiple sectors of the economy. Using Survey of Earned Doctorates data linked to Longitudinal Employer-Household Dynamics employment and earnings data, we examine placements and earnings for US economists in the first ten years of their careers, by gender and race. We find enormous dispersion in pay for economists within and across sectors that grows over time.
Consistent with previous work demonstrating the lack of diversity in economics we find relatively low shares of female and underrepresented minority economists in our sample of PhD economists. Reminding readers of the caveat that our statistics by race cover only about half of PhD economists, the shares in our sample are: 33 percent female economists, 2 percent Black economists; and 4 percent AIAN/Hispanic/NHPI economists. Diving deeper into the data to consider issues of equity, female economists earn about 12 percent less than their male colleagues on average. Black economists earn about 15 percent less than their white counterparts. AIAN/Hispanic/NHPI economists earn about 5 percent less than their white counterparts. These pay gaps suggest that equity and inclusion issues could be tightly tied to the diversity issue since they may serve to dissuade potential economists. While the earnings gaps estimated in this paper are new, the underlying disparities in the profession that these gaps reflect are well known, as were documented by the 2018 AEA Professional Climate Survey (Allgood et al. (2019)). The exploration of heterogeneity in earnings gaps across individual and job characteristics in this paper gives us another window into the inequalities in the economics profession.
Acknowledging the issues with diversity along the entire pipeline, we need to be careful in how we interpret results that control for PhD program and employer. As one of our colleagues aptly put it “the road to earnings inequality is long” and parsing out the impact of each stage on the earnings gap is beyond the scope of this paper. We have attempted to describe one part of this long road, but a full accounting would include the entire educational experience, as well as other socioeconomic factors including health and access to wealth. Moreover, we acknowledge that our measures of race only crudely capture the lived experience of underrepresented economists.
While we have used some measures related to education and employment, in future work, we could include other characteristics of PhD economists at the time of their graduation. For example, we could look at marital status, number of, and student debt (from both undergraduate and graduate studies). These are all asked by the SED and could help provide insights into people’s job preferences. We could also examine most-PhD family structure changes, particularly timing and number of children, using additional Census data.
Our ability to combine the rich data collected in the Survey of Earned Doctorates with the near universe of employment and earnings from the Longitudinal Employer-Household Dynamics has enabled us to provide a view into the labor market dynamics of the economics profession for PhD economists. With the caveats concerning our linked sample, we are able to provide a unique view into the placement and earnings of PhD economists by gender and race. We hope that our contribution with its focus on descriptive statistics provides a useful framework for other research into diversity, equity, and inclusion in our profession.