Are there too many Ph.D. students and postdocs or too few? The size of the Ph.D. population is on many minds right now, but the nature of the concern is one that many scientists might find surprising. An article in last month's Scientific American asks, "Are there enough Ph.D.s in science and engineering?" Similarly, the National Science Foundation?s (NSF?s) Science and Engineering Indicators 2002 report inquires, "Is the United States educating an adequate number of bachelor-level S&E majors who are willing and able to pursue advanced degrees in S&E?"

The motivation for these questions is recent data from NSF that show worrisome-looking declines in the number of physical sciences Ph.D.s produced over the latter half of the last decade (see Figure 1). The U.S. Air Force, on the basis of these declines, has already begun to assemble a coalition of government, university, and industry representatives to address the situation. Scientific American suggests that an aggressive recruitment campaign could increase the number of Ph.D.s granted per year by about 20%.

Figure 1. Decline in Physical Science Ph.D.s Awarded in the United States

National Science Foundation, Division of Science Resources Statistics Table 1, Science and Engineering Doctorate Awards: 2000 Arlington, VA (NSF 02-305)

Science and engineering are playing an increasingly important role in our economy, so ensuring a well-educated workforce is important if the United States is to maintain its competitiveness in the global marketplace. That being said, before investing significant resources to recruit new Ph.D. students, it is worth examining the issue more closely.

Labor market economist Richard Freeman examined the influence of economic considerations on the decision to enroll in physics Ph.D. programs in the 1960s and ?70s (read Freeman?s analysis here). He found persuasive evidence that physics enrollments were strongly influenced by the attractiveness of physics careers relative to competing alternative careers. Enrollments were highest when starting salaries for physics Ph.D.s compared favorably to salaries for other professionals, and lowest when physics salaries lagged behind those of other professionals. Freeman found forecasts of Ph.D. production based on models that incorporated the response of enrollments to salary considerations to be "remarkably accurate while those based on mechanical extrapolations were orders of magnitude off base."

Freeman?s research provides a compelling explanation for the recent declines in the ranks of physical sciences Ph.D.s. In the early 1990s the large numbers of science and engineering Ph.D.s on the market drove down salaries and degraded working conditions for young scientists. At the same time, the Internet boom created glamorous, high-paying opportunities for people with strong analytical skills. Faced with a choice between the allure of Silicon Valley and long years of school followed by a series of low-paying postdocs, many would-be physicists, engineers, and mathematicians chose to postpone or forego graduate studies.

The collapse of the dot-coms and the current recession should bring about increased graduate enrollments, particularly in fields in which salaries for new Ph.D.s compare favorably to those for competing alternatives. There is already considerable anecdotal evidence that graduate enrollments are growing. The job market for physicists has improved considerably recently, and the recent reductions in the number of physics Ph.D.s has played an important role in the improvement (see "The Physics Job Market: From Bull to Bear in a Decade", for example). This reversal of the relative appeals of physics jobs and competing alternatives should result in a significant increase in physics enrollments.

Freeman?s work suggests that plans to aggressively recruit new graduate students in the near future could have the opposite of the desired effect in the long run, as increased numbers of Ph.D.s will drive down salaries and therefore enrollments. The best way to maintain the ranks of physical scientists is to ensure that science jobs pay well and that science careers are attractive relative to alternatives. Improving the lot of postdocs would be a natural first step toward this goal.

Economists have a great deal of insight to offer policy-makers. One particularly useful way to tap their knowledge would be to commission economics-based models of the higher education system with the goal of letting policy-makers examine the effects of funding and policy changes via simulation. The objective of these models would not be to provide a precise forecast of the future (an impossible task), but rather to capture enough of the behavior of the educational system to make useful qualitative predictions. Current planning draws upon demographics-based models (see the National Academies Office of Science and Technology Personnel?s 1994 Meeting the Nation's Needs for Biomedical and Behavioral Scientists and 1997 Multi-State Life Tables reports, for example). Although useful for making short-term predictions, these models provide little insight into how the higher education system evolves in response to external changes.

The biggest changes in the scientific labor market over the past decade--the job market problems facing young scientists, the increasing numbers of foreign students, and the expansion of the ranks of postdocs--have all been driven by economic, not demographic factors. Of particular relevance to postdocs is the fact that economically based models are the only ones that take into account the harm done by low postdoc wages to recruitment efforts for the next generation of scientists. Policies and funding mechanisms guided exclusively by demographic models miss such considerations completely.

It is time to bring the same level of careful analysis to the funding of science that we bring to the bench when conducting science. Send in the economists!