Written by Connie Xie
As COVID-19 rages on and continues to leave lasting impacts on all aspects of life around the globe, many PhD students may choose not to graduate this year because “most universities have frozen their hiring of new faculty due to [its] budget impact”, according to Professor David Yermack, chair of the Finance department at Stern.
Yet the prospects of employment for postgraduates, even under normal circumstances, is grim in many sectors. This is not because of the inability of postgraduate students to find careers — the unemployment rate of PhDs in the United States is less than one-third of the national unemployment rate — but because of underemployment, a phenomenon that occurs when the job for which one is hired does not necessarily require the level of education one has achieved. This is because the academic job market is generally highly competitive, as a university’s hiring capacity depends to a great extent on its funding and financial resources. “In my department, it is not unusual to receive more than 200 applications from new PhDs in a year in which we may end up hiring one new assistant professor”, writes Professor Yermack. To make matters worse, postgraduate studies can often cause students to accrue large sums of debt, which, in addition to causing financial stress, sometimes places postgraduate students under great mental pressure.
Although this image of postdocs unable to find suitable positions is a reality for many, it is not the entire story. “In some areas teaching jobs can remain unfilled for many years if there are few PhD students studying the topic”, Professor Yermack states. Due to the transparency of the market, he points out, students are able to take advantage of this by gearing their areas of study towards such understaffed topics. Competition is further decreased considering the fact that many postgraduate students choose to leave academia to work industry jobs or government jobs, with some electing to do so even before completing their PhD.
But if there are so many applicants for each position, one must wonder at the burdens the competition must place on universities to find the best candidate. While many universities appoint hiring committees to screen the large volume of applications, this proves a minor inconvenience as universities often have to “compete with other universities who will also make offers of faculty positions” to top PhD candidates. Therefore, from a hiring perspective, Professor Yermack writes, “universities do not mind if there are a large number of applicants, because we try to be very selective in whom we hire and appreciate the availability of many candidates.”
As for the COVID-19 related crisis in the academic labor market, current doctoral students need not panic more than they would in any other fiscal year. While there will indeed be more competition when new PhD candidates graduate in later years, Professor Yermack reports that “universities are also reducing their admissions of new PhD students, which will lead to a lower supply of faculty candidates in response to the reduced demand.”
Despite its unique challenges, the academic labor market, as Professor Yermack describes it, is just like most others: a question of supply and demand.