“Those who can …”


[T]he typical economics assistant professor makes 50% more than the typical sociologist

The author constructs an institutional model to explain the gap, but the reason is simple:

A quantitative economist can make more money outside the academy than can a sociologist. In Economics jargon, the opportunity cost of being an Economics professor is higher than the opportunity cost of being a Sociology professor. If the academy wants to keep an economist, it will have to pay more than for a sociologist.

It’s even worse for a humanities professor. What’s the alternative employment for a Gender Studies PhD?

I’m sure that pay gap generates rancor.

I’ve spent enough time in the academy to be acquainted with its utopian communitarian fancies. “It’s just as hard to get a Gender Studies PhD as an Economics PhD. It’s not fair!”

That doesn’t bother me. One doesn’t get paid for doing what one wants. One gets paid for doing what someone else wants. Ya pays yer money, ya takes yer choice.

In fact, I’m surprised that the premium to economists is only 50%.

There’s an old saw that a society that exalts philosophy and scorns plumbing will find that neither its pipes nor its logic hold water. A university that pays its professors the same will find that its Physics department can’t explain why pipes hold water and its Economics department can’t explain why California is running out of water.

My concern is different:

Can academia pay enough to retain first-rate economists? Mathematicians? Physicists? Engineers?

And if not, who will teach the next generation of economists, mathematicians, physicists and engineers?

My Love employs people with advanced degrees in quantitative disciplines: Mathematics, Statistics, Physics, Economics. She doesn’t compete with the academy for that talent. She competes with banks that need quants to analyze complex securities and strategies. The banks pay many times the salary of a tenured university position. My Love has to meet that salary expectation.

The gap in my profession (Engineering) is probably less stark. Professors can supplement their salaries with consulting fees and research grants. The range of incomes outside academia is much greater. Still, I make several times what my professors make.

There’s another, more brutal, old saw, “Those that can, do. Those that can’t, teach.” I have the utmost respect for my Engineering professors. My Love doesn’t just respect her professors, she reveres them.

But will the private sector’s premium to quantitative ability and training eventually undermine education in quantitative fields? Will those who can, quant?

Until this generation, the most brilliant mathematicians and physicists taught the next generation. In this generation and the next, will too many go to Goldman Sachs?

Then who will train the next generation?