THE TEACHING ECONOMIST - William A. McEachern 
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Issue 15, Spring 1998
William A. McEachern, Editor
What AEA Members Do
As many of you know, every four years the American Economic Association surveys its members and publishes the results in a supplement to the December American Economic Review (what has come to be known as the AEA Handbook). In the most recent two surveys, 1993 and 1997, members were asked for the first time about their "principal present employer." Academic positions accounted for nearly two-thirds of reported member employment in both years. Specifically, of those responding to the survey, 64.8% held academic positions in 1993 and 65.6% did so in 1997. Universities represented the overwhelming share of academic jobs in 1997 among AEA members - 87.2%, versus 10.0% for four-year colleges and 2.8% for other educational institutions. This distribution was virtually the same as in 1993.
Total AEA membership declined slightly ( - 0.6%) between 1993 and 1997; the number responding to the employment survey dropped more, by 3.9%. I have adjusted the results of the survey in 1997 to account for the decline in response rates. In all, the number reporting an academic employer increased from 11,031 in 1993 to 11,106 in 1997, or 0.7%. Employment at universities increased from 9,546 to 9,679, or 1.4%, but employment at four-year colleges decreased from 1,187 to 1,116, a drop of 6.0%.
Non-academic employment declined from 5,987 to 5,811, a drop of 2.9%. The largest non-academic employer in both 1993 and 1997 was the federal government, where employment fell from 1,484 to 1,337, or by 9.9%. State and local government employment also declined, from 297 to 275, or by 7.4%.
Employment in business and industry decreased from 762 to 655, or 14.0%. Banking and finance slipped from 662 to 643, or 2.9%. And international organizations remained unchanged at 557. The only non-academic categories to increase were non-academic research institutions, which rose from 619 to 659, or 6.5%, and consultants, up from 1,182 to 1,268, or 7.3%. An increase in consultants may, to some extent, reflect a growth in economists who were between permanent jobs.
The bottom line is that the modest growth among members in university jobs was more than offset by losses elsewhere, resulting in an overall decline in employment among AEA members. Job erosion among members was deepest in government and especially in business and industry, where one in seven positions disappeared in the last four years. Of course, the slack employment may reflect only what's been happening to AEA members and not the wider profession, but the corporate job loss does bring to mind the economist from Morgan Stanley quoted in last Spring's Teaching Economist. He said that his firm would not hire an economics Ph.D. without substantial work experience outside academe, arguing "We insist on at least a three-to-four year cleansing experience to neutralize the brainwashing that takes place in these graduate programs."