Kevin Hoover had his pick of the world’s best universities. A budding economist at the Federal Reserve Bank of San Francisco, he had been accepted into Ph.D. programs at Harvard, MIT, Stanford, and Oxford. He chose the latter. Hoover excelled in the history and philosophy of economics, and Oxford’s program was strong in those areas. After graduating in 1985, he knew he wanted to work in academia. But when Hoover returned to America, despite having a doctorate from one of the most prestigious universities in the world, he found that “I didn’t have connections.”
It was Hoover’s first taste of the “oligopoly” at the heart of the economics profession, which channels power to a handful of institutions and marginalizes thousands of economists working outside them. Graduates of these institutions are vastly overrepresented at one another’s universities, dominate the leadership of the American Economic Association, monopolize the president’s Council of Economic Advisers, and receive most of the field’s top honors. The result is an old boys’ network that limits the development of knowledge and illustrates the severity of America’s obsession with top universities, even among academics who preach the importance of competitive markets.
“Economics is a hierarchical, oligopolistic scientific field,” says Andrej Svorenčík, an economist at the University of Pennsylvania who recently co-authored a paper on this phenomenon with Hoover, now a professor at Duke University. “A few departments have an outsize influence in terms of producing scholars, placing scholars in academia, and influencing or controlling the research agenda.”
Hoover and Svorenčík’s paper examines the leadership of the American Economic Association, the profession’s powerful governing body. According to their research, since 1985 almost 70 percent of the leadership of the AEA have been doctoral graduates of Harvard, the Massachusetts Institute of Technology, the University of Chicago, or Stanford University—a staggering overrepresentation, given that around 150 American universities grant doctorates in economics.
But the dominance of graduates from these institutions is not limited to the AEA. It also extends to economics’ most prestigious prizes. Sixty-five percent of Nobel laureates in economics since 2000 received their Ph.D. from one of the world’s top six universities for the study: Harvard, MIT, Stanford, Princeton, Chicago, and the University of California, Berkeley. That dominance is even more pronounced for the Clark Medal, or “baby Nobel”: 83 percent of medalists since 2000 received their Ph.D. from Harvard, MIT, or Stanford.
Graduates of these elite institutions also wield disproportionate political power. Since it was founded in 1946, the White House Council of Economic Advisers has helped chart the country’s economic direction; its members are among the most influential economists in the country. Of the 32 economists to serve on the council since 2000, 24 received their Ph.D.s from Harvard or MIT (three more received doctorates from Chicago or UC–Berkeley).
This oligopoly is partly a product of history. The economics programs at Harvard and Chicago are among the oldest in the country, which gave them a head start in amassing prestige and talent, says Svorenčík. Other institutions, like MIT, developed into giants through deep ties with existing programs and early successes recruiting talented professors.
But the oligopoly also entrenches itself in the present. Professorial jobs overwhelmingly go to candidates with Ph.D.s from the top-six institutions. A recent study found that of 2,686 tenure-track academics at the 96 highest-ranked American economics programs, more than a third received their doctorates from top-six universities. Almost 15 percent received doctorates from just two universities: Harvard and MIT. There was “little upward mobility” in economists’ careers, according to the study, and “few economics professors in this group are teaching at programs ranked higher than their own Ph.D. programs.”
The dominance of top-six graduates is particularly strong among the faculty at the top-six universities. At least half of economics professors at each top-six university received their Ph.D.s from a top-six university. At MIT, Harvard, and Stanford—which are tied for first in the world for economics by U.S. News & World Report—three-quarters of professors are doctoral graduates of top-six universities. At MIT and Harvard, 6 in 10 economics professors received their Ph.D.s from MIT or Harvard.
The focus on a handful of elite institutions is rooted in a narrow understanding of talent. In a 2014 paper about economics at MIT, Beatrice Cherrier, an economics historian at ENSAE Paris, quotes the MIT professor Robert Solow as saying, “To maintain our position in the pecking order, we simply must nab one or two of the top young economists in each succeeding generation.” Solow later said, “Any connoisseur will tell you that there are only four young mathematical economic theorists under the age of 30 worth talking about in the world.”
Following the publication of Cherrier’s paper, Jake Vigdor, a public policy professor at the University of Washington, wrote on Twitter that this “reflects a deep-seated worldview” that “only the work of a handful of economists truly matters. The thousands upon thousands of dues-paying economists, from the perspective of those atop the hierarchy, busy themselves with work of no consequence and are chiefly useful as potential employers for disappointing students.”
Clearly, says Svorenčík, economics is “one of the least upwardly mobile” academic fields: Compared with political science or sociology programs, an economist’s doctoral program is more likely to determine their career path. “One possibility is that those [at the top] are just the best people,” says Hoover. “But I don’t entirely buy that. It’s also that they have a different opportunity set than other people.” Other economists might be intellectual late bloomers, or might have come from poorer backgrounds that made it difficult to get into prestigious undergraduate programs where they could get references from famous academics. Another recent study found that U.S. Ph.D. graduates in economics are less socioeconomically and racially diverse than those in any other major academic field.
Svorenčík believes that the dominance of a handful of economics departments may also hinder innovation. “Similar people come up with similar ideas,” he says. “Competition is good for outcomes.” Importantly, elite universities’ homogeneity appears to leave many of their graduates unfamiliar with other, increasingly important aspects of the field. A 2022 report by Rethinking Economics, a group pushing for reform of economics education, found that 78 percent of the American economics students they surveyed hadn’t been taught about environmental economics, and 92 percent hadn’t been taught about feminist or stratification economics, which focuses on socioeconomic inequalities.
“You have such a narrow scope of what is studied and such a narrow range of perspectives,” says Abigail Acheson, co-coordinator of Rethinking Economics USA. The top institutions “don’t think that thorough historical analysis, or a feminist perspective, or a decolonial perspective, or a radical perspective, is economics,” agrees Nouhaila Oudija, also a co-coordinator of Rethinking Economics USA.
Oudija attributes that disregard to the dominance of the top-six institutions. “When you have that privilege of being a Harvard economist or whatever, there’s ego. You think that you’re in the right and everybody else is in the wrong,” she says. “The establishment organically breeds that toxicity.”
Interestingly, one of the most important developments in recent economic history, behavioral economics, came from outside the top-six universities (and, in fact, from outside economics): Its earliest proponents, Amos Tversky and Daniel Kahneman, started as psychologists at Israel’s Hebrew University. Richard Thaler, another of behavioral economics’ most important theorists, received his Ph.D. in economics from the University of Rochester.
Despite these problems, however, senior members of the economics profession often seem unwilling to recognize the issue. After finishing their paper about the AEA’s leadership, Svorenčík and Hoover contacted the American Economic Review, which the AEA runs, to see if the journal was interested in publishing their work.
Hoover says he didn’t expect the journal’s editor to say yes. But when the editor wrote to say they had been rejected, he was shocked by the reason: Hoover and Svorenčík’s analysis, the editor said, wasn’t connected to a “general interest question.” It “shows an amazing insensitivity to what people regard as important in the profession,” says Hoover. Their paper was later accepted by another journal.
Hoover is not particularly aggrieved by the oligopoly at the heart of economics. “I don’t want to sound like a bitter outsider,” says Hoover. “The world has treated me well.” After graduating from Oxford, he eventually landed at the midranked UC–Davis, rose to lead the economics department, then moved to Duke University in 2006.
However, there is a “significant” probability he would have ended up at a higher-ranked university earlier in his career “had I gone to any of the institutions I had in my choice set other than Oxford,” he thinks. “We’re never going to have a system in which … your connections don’t matter. But we can sort of minimize that.”
At the very least, he says, economists should talk about the problem. “I don’t think there’s anything nefarious about it, but there’s something very unattractive about failing to have any kind of sensible debate or discussion about what we want the organization to be.”
