Watching a Train Wreck, Part 2

Posted by Geoff Davis at 04PM on 12/19/06 | Categories: Labor Market | 2 comments

We've seen the effects of the NIH budget doubling on the grad student population. What about postdocs?

The NSF publishes an annual headcount of postdocs in academic institutions, and sure enough, the number of postdocs went up over the budget doubling period, 1998-2003. However, once you dig into the numbers a bit, some interesting things emerge. Take a look at the breakdown by citizenship:

Postdocs by citizenship

From 1998-2003, the number of life sciences postdocs increased by 4,015. These new postdocs were all non-citizens. In fact, over the same time period, the number of US citizen / permanent resident postdocs decreased by 255.

This is not to say that foreign postdocs are not displacing US postdocs. Here's what most likely happened: the NIH announced a big new pot of money. As we discussed earlier, new graduate enrollments increased significantly in response. It takes 5-7 years for these new grad students to earn their PhDs, and in the meantime there simply were not enough US citizen PhDs to fill all the new positions, so universities had to import them. The new US PhDs will be coming online this year or next, but it's already too late. As Peter said earlier: "the domestic PhD population arrives at exactly the WRONG time - after the party is over." The delay in creating new PhDs means that similar increased immigration will occur during any rapid scientific expansion.

So one big question is, what happens when all the new US PhDs start showing up? Can an increase of 1000 -1500 new US citizen postdocs / year be absorbed? Postdocs are cheap, so 1,000 new 3-year postdoctoral positions would only cost about $150M - only about 0.5% in the $30 billion NIH budget. That's small potatoes when the NIH budget grows at, say, 5% per year, but if instead the growth rate is more like 2%, I expect to hear a lot of grumbling from senior people and significant downward pressure on stipends. NRSA fellowship amounts are already decreasing in inflation adjusted terms.

My guess is that the new NIH money that is not dedicated to infrastructure is now paying the salaries of a lot of new soft money positions. Over the next few years, we'll see a shakeout of these folks, and this once-promising escape route will be replaced by a lot of new postdoctoral slots.