The Doctor of Philosophy (PhD) is the terminal degree in economics. Earning the degree requires years of study and culminates in the completion and defence of a dissertation of economic research.
Many recipients of the PhD pursue academic careers as professors of economics, business and related fields. Others pursue careers in government or consulting. The average salary of a PhD in economics depends on the selected career path.
Most four-year colleges and universities require a PhD for employment as a faculty member in economics. In addition, some PhD economists hold faculty positions in schools of business, law and public affairs or public policy.
Salaries for economists in academia vary by whether an economist is on the faculty of a university that grants PhDs or only undergraduate and master's degrees.
The American Economic Association reported in 2007 that senior assistant professors at PhD-granting institutions earn an average of nearly £62,400 a year. Professors who earn tenure can expect to earn even more. The AEA reported that salaries for tenured associate professors average £83,590 a year, while full professors' annual salaries average £133,120 a year.
Economics PhDs who find employment as faculty members at universities in which the master's is the terminal degree earn less than their counterparts at PhD-granting institutions. The AEA reported in 2007 that salaries for senior assistant professors average £52,108 a year. Tenured associate professors receive a small boost, with their salaries averaging £53,516. Full professors at colleges and universities that grant only bachelor's and master's degrees earn average annual salaries of £63,375, according to the AEA.
PhD economists with strong public policy interests find rewarding careers in government, especially at the federal level. The federal government has jobs for economists in many agencies and departments. These include the Federal Reserve Board and its regional banks, the U.S. Department of State, the Central Intelligence Agency and the U.S. Department of Labor.
A PhD in economics can begin a career on GS-12 of the federal government's pay scale, according to the American Economic Association. Starting salaries on the GS-12 grade range from £39,178 to £50,930 a year, according to the U.S. Office of Personnel Management's 2011 pay scale for federal employees.
Career opportunities for PhD economists are not limited to civil service and academia. Others enter the private sector, working in consulting, financial markets, banking, manufacturing and other business sectors.
The National Association of Business Economics' 2010 salary survey reported that its members with doctoral degrees earned an average of £97,500 a year, well above the £78,000 median for all NABE members, regardless of degree. In addition, the average starting salary for a PhD was £55,250. Highlights of the NABE report indicated that respondents to the survey included government economists as well as those in business, finance and consulting.