Wednesday, April 11, 2007

Mamas, Do Let Your Babies Grow Up to be Health Economists

by Tom Bozzo

According to John Cawley and Michael Morrisey ("The earnings of U.S. health economists," Journal of Health Economics, Vol. 26 [2007], No. 2., 358-372), the mean annual earnings of health economists surveyed in 2005 was $119,499. Among the not-overly-surprising details, non-academics outearn academics (with median earnings of $118,500 and $100,000, respectively) and holders of actual economics PhDs make more than holders of "other academic doctorates."

Holders of doctorates in other social sciences, don't despair. A possible way to close salary ranks with Those Darn Economists is to get out of "The Academy." Among non-academics, the economics PhD doesn't command a statistically significant premium over other doctorates. [*] However, to get on the real gravy train probably requires sufficient quantitative skillz to get on the expert-witness circuit. [**]

[*] Assuming, it stands to reason, that your doctorate gets you in the door in the first place.

[**] Or, maybe, get a business school job; Cawley and Morrisey find that B-school assistant professors are lavishly compensated. In a fascinating W$J article from a couple weeks ago on the Law and Economics Consulting Group, the firm's econ professor founder claimed that a few dozen of LECG's experts pull down mid-six-figure salaries. Making corporate executive-level pay at a publicly-traded consulting firm may, however, require certain ethical compromises — e.g., testifying on the tobacco company's side in tobacco-related litigation.

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