Greg Mankiw's reflections on graduate education

At his blog Mankiw offers his comments on the paper “Completion Rates and Time-to-Degree in Economics PhD Programs” by Wendy A Stock, John J. Siegfried, and T. Aldrich Finegan.

Mankiw writes

This paper is a contribution to an important line of work. As economists, we often remind policymakers that their decisions should be based on objective, empirical research rather than uninformed supposition. Yet when we are the decision makers, as we are when we run our own educational programs, we often have little data-driven analysis on which to base on our judgments. This kind of research should, over time, lead to a better educational system.

I would like to take note of two facts highlighted in this study and to tentatively discuss what they might mean. The first fact is that it is taking longer for students to earn their PhDs in economics. The second fact is that a sizeable percentage of students who start PhD programs do not finish.

It is tempting to interpret these facts as a sign of educational failure. After all, students enter these graduate programs to earn a PhD. If the successful ones are taking longer to finish, and many others are not getting their degrees at all, then it might seem that we are doing something wrong.

But it is far from obvious that these facts are symptoms of a problem. Perhaps longer times to completion and some amount of dropping out are optimal.

Consider time to completion. There is no doubt that economics is still a young science and there is much we do not know. But there is also no doubt that research is continually adding to our stock of knowledge. Perhaps students are taking longer to earn PhDs because there is more for them to learn. It may well be optimal to spend six rather than five years in graduate school before our profession releases students into the world with our highest level of certification.

Another relevant fact is that most students, when they get their first academic jobs, end up at colleges and universities with lower ranked departments than where they earned their PhDs. Why hurry the process of moving to a less vibrant intellectual environment? It may well be better for the professional development of the candidate to spend an extra year or so in graduate school.

Consider now the fact that many students drop out of graduate school without a PhD in hand. While many of these students are disappointed by this outcome, it is likely that in many cases their choice to drop out is optimal. They entered graduate school without fully knowing what it was like and whether it was a good match for them. After a couple of years, they decided it wasn’t. In light of the inherent uncertainty when choosing a path in life, a bit of experimentation is desirable.

My own life is a case in point. When I left college, I was unsure what career path I wanted to take. I therefore enrolled in two graduate programs—the PhD program in economics at MIT and the law program at Harvard Law School—thinking I might finish both. In the end, however, I dropped out of law school after three semesters. Looking back, the decisions to enter and drop out of law school were the right choices. I started because I thought a legal career might be best path for me, and I stopped when I learned it wasn’t.

The question we face as designers of educational programs is how to structure them in light of the longer times that PhDs take and the fact that some students who start these programs may rationally choose not to complete them. The answer may be to divide current PhD programs into two chunks. The first chunk would be a two-year master’s degree focused on taking advanced courses. The second chunk—appropriate for only a subset of master’s students—would be a research degree culminating in the PhD.

Many programs in effect already do that. But the master’s degree is too often viewed as a consolation prize for a PhD dropout. Perhaps we should instead encourage people to view the master’s degree in economics as a fully respectable terminal degree. Moreover, having finished a master’s degree, PhD candidates would be treated as professionals—more like the most junior faculty and less like the most senior students.

Many students leave college wanting to learn a bit more economics. But a PhD may be more than they want or need for their careers. An expansion of master’s programs in U.S. economics departments may offer many students the stepping stone they need.

The fact that it is taking longer for students to earn their PhDs in economics and that a sizeable percentage of students who start PhD programs do not finish are interesting results and I wonder how New Zealand compares to the US in this regard. One explanation for both results would be that the student entering economics PhD program just aren't as good as those students entering other programs, but this should be easy to check.

I do like Mankiw's idea that

The answer may be to divide current PhD programs into two chunks. The first chunk would be a two-year master’s degree focused on taking advanced courses. The second chunk—appropriate for only a subset of master’s students—would be a research degree culminating in the PhD.

The research "chunk" is not needed for many jobs that economists do, so why make students do it? A, say, Master of Economics degree which covers the two years of graduate papers would be attractive and useful for many students who want to work as economists but do not want to be researchers themselves. I'm sure there is market niche here.