Economics Vs. Finance in academia

[IvyBoy]

Hello people,

I was just wondering...assuming that one has equal interest in economics and finance and they want a research oriented career, which one is more marketable a Ph.D. in econ or Finance? In other words, are there more job openings for econ professors or finance professors out there?

~IvyBoy

[asquare]

Econ. Econ PhDs can teach in econ departments, finance programs, or business schools, while finance PhDs are more limited to finance and business. Also, almost every research university has an econ program, but not all have finance programs.

[tct]

Originally Posted by asquare

Econ. Econ PhDs can teach in econ departments, finance programs, or business schools, while finance PhDs are more limited to finance and business. Also, almost every research university has an econ program, but not all have finance programs.

It seems to me that the most rigorous Ph.D. programs in Finance are basically the same as Ph.D. in Economics from the same university where you are limited to fields related to finance. You often end up taking core and economic theory courses in the economics department while financial economics and corporate finance courses in the business school. In theory, if you hold a Ph.D. in Finance from such a department, I don't see why you can't qualify to be a professor of economics (in the field of financial economics). But of course, I would say that Ph.D. in Economics is superiour because you're not as constrained to what your concentration field can be. It's also not fully true that all economists can teach in the school of business (say, if you're doing something like environmental, labor, or development economics, I suspect it will be hard to get a job there).

[asquare]

tct, I think the problem is that professors in economics departments need to be able to teach outside of their specialties (at least to undergraduates -- most people teach only their specialty to grad students). If getting a PhD in finance were the same thing as getting a PhD in economics with finance as your ony field, this wouldn't be a problem. And I'm sure there are individual cases where it's not a problem -- there are going to be plenty of counter-examples to the "finance PhDs don't get positions in econ departments" generalization. But in general, I think you maximize your chances of landing a teaching position by doing the econ degree rather than the finance one.

[Jhai]

I worked for an economist this summer who got his Ph.D in Public Policy at Chicago. He strongly warned me against going the same route - getting a Ph.D in a field related to econ (finance, econ at a business school, public policy) because it simply gives you less options after graduation, at least if you want to work in academia. Econ is the hub of these other programs - people go from econ into these other programs, but few people go from these programs into econ.

[wolf87]

I think that this thread has been missing a large set of jobs: the private sector. For research-oriented careers in the private sector, a PhD in Finance can be more valuable. It opens up some quant-type positions and is more marketable in the financial community. For research institutes and such, econ PhDs are better. Depends on where you want to go.

[asquare]

wolf87, the OP asked specifically about research careers and job openings for professors. I agree with you that finance is very valuable in the private sector, but that wasn't the question the OP raised

[wolf87]

Just a definition thing. I consider some quant finance careers to be research (model building, etc.).

[IvyBoy]

Well, I think there are two points here. First, I think it is the general consensus that Finance professors earn more than Econ professors. Secondly, a person who may not make it into a top econ department might have a shot at a top finance department for a doctorate. So given that Mr. E and Mr. F graduate from top departments in Economics and Finance respectively, I would agree that Econ might be the way to go. However, people have been telling me that if I end up going to a low-ranked university, Finance would make me more marketable. What do you guys say to that?

[asquare]

I still disagree Coming from a low-ranked finance program, you're unlikely to get a teaching position at a top finance program, and you will have fewer overall options than if you'd come from a similarly ranked econ department. If you think you can get into a substantially stronger finance program than econ program, it's a harder decision. I'm not convinced that it's easier to get into a top finance program than a top econ program, though. Both are very competitive, though the profiles of top applicants may be subtly different.

In the end, I think it's important to choose the program that is the best match for your interests and goals -- not to spend too much time thinking about how to work the system. Job markets change, rankings change. Pick the program that gives you the strongest possible training in the areas you are interested in. If you are passionate about finance, you should do a finance program -- the wider options you'd have post graduation with an econ degree won't appeal to you anyways. By the same logic, if you aren't passionate about finance, don't limit your future career options.