From the conclusions of a new paper in the Journal of Economic Perspectives*:
If the objective of graduate training in top-ranked departments is to produce successful research economists, then these graduate programs are largely failing. Only a small percentage of economics PhDs manage to produce a creditable number of publications by their sixth year after graduation. Even at the top five departments, it would be hard to argue that the bottom half of their students are successful in terms of academic research. The number of AER - equivalent papers of the median at year six is below 0.1 in all cases and is in fact zero in most. At the majority of the departments ranked in the top ten in conventional rankings (such as Coupé 2003), 60 percent of their students fail to meet this 0.1 AER -equivalent standard, and for the majority of the PhD graduates of the top 30 departments, 70 percent fail. A tenure standard of 0.1 AER-equivalent papers is roughly equal to publishing one paper in a second-tier field journal over six years. This record would not be enough to count as “research-active” in most departments, much less to result in tenure. ...
For graduate students in economics (and also potential graduate students), the message is that becoming a successful research economist is difficult. The good news is that one does not have to go to a top department in order to become a successful research economist. The bad news is that wherever one goes, only the very best of each class is likely to find academic success as defined by research publications. ...
Thus, students thinking about applying to PhD programs in economics would be well advised to have “Plan B’s” for every stage of the journey—including the possibility of not being accepted into a PhD program, the possibility of not completing the program, the possibility of not finding a suit able academic job, and the possibility of not receiving tenure. We hasten to add that there are many rewarding and worthwhile nonresearch and nonacademic career paths open to those who obtain masters or doctorate degrees in economics, and many students discover, either while in graduate school or during their untenured years, that they actually prefer these sorts of jobs to the academic life.
A couple of other quotes are worth excerpting. From the intro:
Economics PhD programs are primarily designed to produce research economists. There is little or no focus on training students to suit the needs of business or industry (Siegfried and Stock 1999). Our experience suggests that most students, especially at the better programs, enter graduate school planning to seek academic jobs, or at any rate, jobs that require research. We would also argue that students have a more-or-less common preference ordering over departments. In general, a student admitted to MIT or Princeton is unlikely to choose to go to Duke or Ohio State instead.
Teaching is not even mentioned in the first sentence. And, Duke and Ohio State? Burn!
And this from the conclusions:
However, at lesser departments, there is always a debate about whether it is better to hire lower-ranked graduates from top-ranked departments of economics, or the best graduates from lower-ranked departments. Our conclusion is that it is indeed worthwhile for lower-ranked schools to look outside the top-ranked departments for new hires, though only at the top students of such programs in general.
Some of us at "much lesser" departments have known about this for a long time. I'm most interested in the PhD program ranked #31 - all other PhD programs. The data (available at the link above) contain 7396 of these graduates and 59% (n=4356) do not have any publications** after 6 years. Of those with at least one publication, 82% have published less than two papers in second tier field journals (this is my definition of "research active" and my cutoff is 0.195). If you were at a much lesser department and trying to find a research active faculty member in the job market, there were only about 36 of these on the supply side of the market each year. I wonder if this is any different in in 2014?
Only eighty-nine (16%) of these 541 research-active PhDs published at least one AER-equivalent paper (1 paper in the AER or 10 in second-tier field journals). Here is a picture:
Incredibly, one 1991 graduate had 4.55 AER-equivalents in his/her first six years. Twelve others had two or more.
And going back to that line from the intro. The major activity of most PhD economists is teaching. Given these results it seems that PhD programs at departments 1-31 should spend a bit more time training teachers or, at least, paying it some lip service.
*Source: Conley, John P., and Ali Sina Onder. 2014. "The Research Productivity of New PhDs in Economics: The Surprisingly High Non-success of the Successful." Journal of Economic Perspectives, 28(3): 205-16.
**Here is information on the sample and measurement:
We start with a census of 14,299 economics PhD recipients from 154 academic institutions in the US and Canada who graduated between 1986 and 2000 compiled by the American Economic Association (AEA) and connect this to an EconLit database with 368,672 papers published between 1985 and 2006 in 1,113 peer-reviewed journals (including conference volumes to the extent that these are captured in EconLit).