What the oversupply of social science PhDs means for universities

Will universities continue to offer permanent faculty positions as they offer courses remotely, asks TCA Srinivasa Raghavan.

A few weeks ago I had written about the central challenge that economics faces. This is to go from analysing scarcity to analysing abundance. 

Ironically, a small but important subset of this is the persistently deficient demand for the world’s supply of economists, defined as those with PhDs. The market in question is the academic market.

Recently, I was told that barely a quarter of the economists who came on the academic job market last year found jobs. This year there will again be a fresh supply of economists to add to the ones who didn’t find jobs last year.

How many of them will find jobs next year?

And it isn’t just economics departments in colleges and universities that are not hiring. Indeed, the glut problem came to other liberal arts departments--like history, philosophy, political science and sociology--three decades ago.

Economics escaped because the demand for economists stayed high. No one really knows why. 

It wasn’t just the demand from students. It was also the availability of funds to support the discipline.

An overdue correction

But I fear that this has changed irrevocably. The market for economists has long been overdue for a correction. It has started to happen now.

Not many economists agree with my assessment. They say universities and colleges will resume hiring once the devastating effects of the pandemic on government revenues wear off. Also, they say that demand for enrolments in economics courses will remain high.

Even if this hope is not belied, the question remains: will universities and colleges continue to offer permanent faculty positions when they can get ten times the bang per buck per permanent faculty via online courses?

The new model

If you look at what has happened to the market for preachers in the US, you will get a sense of what I am saying. While the demand for the Sunday sermon remains high, church attendance is not even a quarter of what it was three decades ago. But there has been a massive proliferation of TV preaching and preachers.

I think this what will happen to liberal arts degrees generally and economics and economists in particular. 

In the end it all boils down to service delivery and if the service must be delivered in person (as with, say, barbers) or in a disembodied way, as with call centres. It’s technology that determines the mode of delivery.

To see how the new model will emerge, one must look at the intermediate model currently in operation. This comprises franchises so that you can attend Oxford University in Japan and New York University in Abu Dhabi. And so on.

Now take that to the next level. If a well branded university can offer a course remotely, it will do so. This is what is being done for the last one year. This is going to have three effects. All are positive because abundance will become the norm in university teaching, just as it has in churches in the US.

One, it will remove the limitation on the numbers who can be enrolled because the physical size of the classroom no longer matters.

Two, it will hugely reduce fees--other than some nominal premium--because there is no limit on how many students can be enrolled via the virtual medium. Three, faculty salaries will be replaced by course fees. This trend had already begun about 25 years ago in management courses. It will now catch on more widely.

In theory, every degree in the world can now be awarded by just one university, say, Harvard, which can spend a $100 million dollars on 500 marquee names to attract students while spending a small fraction of that on those who do the actual teaching.

This, too, already happens anyway. It will be just become more widespread.