How Academia Resembles a Drug Gang

In 2000, economist Steven Levitt and sociologist Sudhir Venkatesh published an article in the Quarterly Journal of Economics about the internal wage structure of a Chicago drug gang. This piece would later serve as a basis for a chapter in Levitt’s (and Dubner’s) best seller Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (P.S.) The title of the chapter, “Why drug dealers still live with their moms”, was based on the finding that the income distribution within gangs was extremely skewed in favor  of those at the top, while the rank-and-file street sellers earned even less than employees in legitimate low-skilled activities, let’s say at McDonald’s. They calculated 3.30 dollars as the hourly rate, that is, well below a living wage (that’s why they still live with their moms). [2]

If you take into account the risk of being shot by rival gangs, ending up in jail or being beaten up by your own hierarchy, you might wonder why anybody would work for such a low wage and at such dreadful working conditions instead of seeking employment at Mc Donalds. Yet, gangs have no real difficulty in recruiting new members. The reason for this is that the prospect of future wealth, rather than current income and working conditions, is the main driver for people to stay in the business: low-level drug sellers forgo current income for (uncertain) future wealth. Rank-and file members are ready to face this risk to try to make it to the top, where life is good and money is flowing. It is very unlikely that they will make it (their mortality rate is insanely high, by the way) but they’re ready to “get rich or die trying”.

With a constant supply of new low-level drug sellers entering the market and ready to be exploited, drug lords can become increasingly rich without needing to distribute their wealth towards the bottom. You have an expanding mass of rank-and-file “outsiders” ready to forgo income for future wealth, and a small core of “insiders”  securing incomes largely at the expense of the mass. We can call it a winner-take-all market.

Academia as a Dual Labour Market

The academic job market is structured in many respects like a drug gang, with an expanding mass of outsiders and a shrinking core  of insiders. Even if the probability that you might get shot in academia is relatively small (unless you mark student papers very harshly), one can observe similar dynamics. Academia is only a somewhat extreme example of this trend, but it affects labour markets virtually everywhere. One of the hot topics in labour market research at the moment is what we call “dualisation”[3]. Dualisation is the strengthening of this divide between insiders in secure, stable employment and outsiders in fixed-term, precarious employment. Academic systems more or less everywhere rely at least to some extent on the existence of a supply of “outsiders” ready to forgo wages and employment security in exchange for the prospect of uncertain security, prestige, freedom and reasonably high salaries that tenured positions entail[4].


How can we explain this trend? One of the underlying structural factors has been the massive expansion in the number of PhDs all across the OECD. Figure 1 shows the proportion of PhD holders as a proportion of the corresponding age cohort in a  number of OECD countries at two points in time, in 2000 and 2009. As you can see, this share has increased by about 50% in 9 years, and this increase has been particularly pronounced in countries such as Portugal, Greece or Slovakia, where it nearly tripled, however from a low starting level. Even in countries with an already high share, the increase has been substantial: 60% in the UK, or nearly 30% in Germany. Since 2000 the number of OECD-area doctorates has increased at an average of 5% a year. [5a]

So what you have is an increasing number of brilliant PhD graduates arriving every year into the market hoping to secure a permanent position as a professor and enjoying freedom and high salaries, a bit like the rank-and-file drug dealer  hoping to become a drug lord. To achieve that, they are ready to forgo the income and security that they could have in other areas of employment by accepting insecure working conditions in the hope of securing jobs that are not expanding at the same rate. Because of the increasing inflow of potential outsiders ready to accept this kind of working conditions, this allows insiders to outsource a number of their tasks onto them, especially teaching, in a  context where there are increasing pressures for research and publishing. The result is that the core is shrinking, the periphery is expanding, and the core is increasingly dependent on the periphery. In many countries, universities rely to an increasing extent on an “industrial reserve army” of academics working on casual contracts because of this system of incentives.

Varieties of Dualisation

What I mention above is the broad dynamic that spans across a number of countries. However, the boundary of the insider and outsider group varies across countries. I can give a number of examples from different countries.

In the United States, numbers from the department of education reported in The Atlantic (Figure 2) show that more than 40% of teaching staff at universities are now part-time faculty without tenure, or adjunct lecturers paid per course given, with no health insurance or the kind of other things associated with a standard employment relationship.[5b] As you can see from the graph, the share of permanent tenured faculty has shrunk dramatically. This doesn’t mean that the absolute number of faculty has diminished, it has actually increased substantially, but it has been massively outpaced by the expansion of teaching staff with precarious jobs and on low incomes. The Chronicle of Higher Education recently reported about adjunct lecturers relying on food stamps.[6] The person mentioned in the article declares a take-home pay of 900$ per month, which is sadly not that far away from the 3$ hourly rate of the drug dealer, but for a much more skilled job.


Germany is another case where there has traditionally been a strong insider-outsider divide, essentially because of the hourglass structure of the academic job market. On the one hand, there are relatively good conditions at the bottom at the PhD level, and opportunities have expanded recently because of massive investments in research programs and doctoral schools generating a mass of new very competitive PhDs. On the other hand, there are good jobs at the top, where full professors are comparatively well paid and have a great deal of autonomy. The problem is that there is nothing in the middle: for people who just received their PhD, there is just a big hole, in which they have to face a period of limbo in fixed-term contracts (wissenschaftliche Mitarbeiter) or substitute professor (Vertretungsprofessur) for a number of years, after which they can hope to get their first permanent job in their mid-40s, while this could happen ion their mid-30s in the 1970s.[7] Figure 3 shows the average age of the PhD, for the habilitation and the first professorship in political science between the 1970s and 1990s. The age of the PhD hasn’t changed that much but the age of the first professorship has increased substantially. Also, you have to take into account that there is a selection effect because the people in the sample are only those who have made it to the professorship, and doesn’t take into account all of those that have dropped out during the academic limbo. What is interesting is that the insiders (professors) who control the market have often been hired at a time when no such competition existed, and you may wonder if they themselves would have been hired if similar market conditions had been in place. A number or new types or positions in the middle, such as the Juniorprofessuren have ben created, but these are also limited in time and are not the equivalent of tenure-track positions. Germany is the country of financial prudence, and both regional and federal governments have been reluctant to commit themselves to fund programs and positions on a permanent basis.


This academic limbo is accentuated by the fact that in some disciplines it has become common to apply for professorships even if you’re already a tenured professor so that you can negotiate your own working conditions with your home university. The result of this is that it is very difficult for recent PhDs to compete with established professors, and hiring processes tend to last a very long time as many candidates refuse and take time to bargain back and forth. Time, you may have it if you are tenured, but you don’t if you have an insecure position. You cannot wait two years when a university is negotiating with somebody who will eventually refuse if you have fixed-term contracts. This is a really perverse and insider-oriented system.

The United Kingdom is different from Germany in the sense that it does have intermediate permanent positions for people finishing their PhD. Britain is the biggest academic market in Europe and lectureships provide secure employment for relatively young academics even if the starting salary is relatively low if you take into account living costs, especially in London. However, this does not mean that UK higher education does not rely on a large industrial workforce of outsiders as well. Recently, the Guardian reported on the prevalence of so called “zero-hour contracts” at UK universities. [8] These are contracts which do not specify the number of hours one is supposed to give, and basically imply that the workers needs to be available to her employer when there is work. Compared to Continental Europe, what is striking is the pretty dismal situation of PhD students and teaching assistants who provide quite a large part of the teaching and whose employment conditions are much more casual than what one can see elsewhere. When I did my PhD in Switzerland, I was basically a public employee with a corresponding salary, pension contributions, welfare entitlements. A large proportion of PhD students in the UK do not have regular sources of funding, need to apply here and there to get scholarships, and when they teach they are paid per hour taught or a piece rate (exam/essay marked) that can vary across and even within universities.

The number of hours usually taught at UK universities is relatively moderate, at least at Russell-Group universities, because of a heavier focus on essays and independent work from students, but also partly because departments can rely on this flexible workforce. This has been accentuated by the strong constraints set on universities in terms of research and publication through the REF (Research Excellence Framework). This happens through two channels. First, as research is what is most valued, this creates incentives for established professors to retreat from teaching and secure research grants and publications instead, leaving teaching to casual teaching staff. On the other hand, some universities have advertised a number of temporary positions just because of the REF in order to use people’s publications in their submissions. There is no guarantee that universities are going to keep these people once they have “used” them.

Figure 4 summarizes in broad terms the differences outlined above. As I can see it, this form of insider/outsider divide exists everywhere and is probably expanding. The interesting thing is that these divides are largely structural in the sense that the system simply couldn’t work without this large supply of outsiders ready to accept any kind of employment contract. If you are mobile, strategic and concerned with employment conditions, you might want to exploit these differences and avoid the outsider boxes at different stages of your career. This would mean avoiding the UK for your PhD and avoiding Germany after your PhD.


This was presented on November 19 at the European University Institute’s Academic Careers Observatory Conference. For an updated analysis of academic labour markets in Europe, check this this paper.

[1] Levitt, S.D., and S.A. Venkatesh (2000) “An Economic Analysis of a Drug-selling Gang’s Finances”, The Quarterly Journal of Economics 115(3): 755-789; Levitt, S.D., and S.J. Dubner (2006) Freakonomics: a Rogue Economist Explores the Hidden Side of Everything. NY: HarperCollins.


[3] Emmenegger, P., S. Häusermann, B. Palier, and M. Seeleib-Kaiser et al. (2012) The Age of Dualization: the Changing Face of Inequality in Deindustrializing Societies. Oxford: Oxford University Press.


[5a] NB: This paragraph has been amended to reflect more recent data. The data can be found here.



[7] Data for political scientists from Arendes, C., and H. Buchstein (2004) “Politikwissenschaft Als Universitätslaufbahn: Eine Kollektivbiographie Politikwissenschaftlicher Hochschullehrer/-innen in Deutschland 1949–1999”, Politische Vierteljahresschrift 45(1): 9-31; Armingeon, K. (1997) “Karrierewege Der Professoren Und Professorinnen Der Politikwissenschaft in Der Schweiz, Österreich Und Deutschland”, Swiss Political Science Review 3(2): 1-15.


262 responses to “How Academia Resembles a Drug Gang”

  1. Nothing new here. It’s the (in)famous “Winner Take All” phenomenon coined by Robert Frank. And although some of his explanation was flawed (basing the formation of pecking orders on differences in “talent”, rather than, chance), his observation of the fundamental phenomenon holds. The underlying way of thinking (the world can reliably and conveniently be compartmentalized and ranked) has become deeply embedded in US psyche. As a result, this is also essentially how most industries (increasingly) work, esp. entertainment, but also consulting and investment banking (only that the periphery is better paid). Oddly, the sports industry (probably because of the need for success early in life) seems to be doing a better job at staging this process throughout a person’s “way up”. It’s also much less pronounced in other countries.

  2. This winner-take-all system, which depends on lots of low-paid wannabes, is certainly harsh. But it is not only low-paid wannabes enabling this, new technologies are probably an even more potent force in this direction enabling a few star players to have enormous impact. Consider MOOCs, taught by a famous professor and possibly supported by a lot of low-paid teaching assistants, as they take over from many medium-paid instructors. And I doubt this effect is confined to drug gangs and academics. Rather it seems to be the way our whole economy and society are going. For example, technologies from just a couple computer companies and cell-phone companies dominate global markets and get the vast majority of the profits, while the rest of the industry fights over the crumbs that remain from iPhone-iPad-Galaxy devices. I see the same pattern repeating in other industries as new technologies enable single products to dominate and automation taking away the need for most human labor. The result is winners getting ever larger slices and the rest fighting over smaller left-overs leading to an ever greater spread in wealth. My pessimistic prediction is that if something doesn’t change the dynamic then in not too long the vast majority of people in my country, the USA, won’t be needed and will be living in close-to-poverty conditions.

  3. […] Critical Reading “The academic job market is structured in many respects like a drug gang, with an expanding mass of outsiders and a shrinking core of insiders. Even if the probability that you might get shot in academia is relatively small (unless you mark student papers very harshly), one can observe similar dynamics.” via Facebook […]

  4. Interestingly, you are way behind the time on Germany! In Computer Science, the average age for getting a full professorship has dropped to 36 and the habilitation is only done by people who are unlikely to ever get a professorship. Today, most successful researchers either do a Max Planck Research Group, or an Emmy Noether Research Group, a Junior Professorship (10% tenure-track, 90% non-tenure track) and directly become full professor afterwards. It has not been as easy to become German professor since the 1950s.

    • Not sure why you spread such political propaganda, but last time I checked (this month), the situation as described in the article is pretty much correct for Germany, and what you describing is simply how politicians would like it to be… The limbo is still there, and a LOT of colleagues (natural sciences btw) are struggling to find a way out of it. You admit it yourself: Junior Professors are only 10% Tenure Track. What do you do after that? No more Post-Docs, that’s for sure. That leaves only full professorship. Good luck with that.

      • Propaganda? Oh please!

        Did you know that of all Emmy Noether group leaders less than 1% did not get a full professorship before they were 40? That Lichtenberg (the equivalent to the Emmy Noether program) requires tenure track? That the lack of qualified candidates (who actually looked at the schools curriculum and faculty before applying) has been the key bottleneck at any time when a job ad comes up for a full professorship?

        I became full professor myself at age 34 (in Germany). In my dept, about 30% of the 26 professor were about my age or younger when they became full professor (all of 30% are still below 40 years of age). Of all researchers whom I of my generation in Germany, everyone got a full professorship by now (I am now 37). Even many where I did not feel comfortable with them getting a PhD for their work! Not a single one did a habilitation. But even when I look ten years back: all post-docs whom I knew in Germany before I left Germany for my PhD became full professor before they were 35. So it seems to have been better for a while…

        In computer science, this is definitely the case!

  5. Everything you’re saying about the academic job market is also true of the Rock Star market, too. Doesn’t “dualisation” just mean that academics is a high-risk, high-reward sector? The difference being, if a garage band doesn’t make it big, eventually the members turn to more productive enterprises and change careers. Somehow all these extra Ph.D.s insist that a professorship is owed to them, and don’t exit the market in the numbers you would expect in other sectors.

    • Can you explain to me what “high reward” means? (thats a rhetorical question…lets call it high risk, average reward)

    • Garage bands usually perform & play as a side hobby to their day jobs. They don’t spend nearly every moment of nearly a decade devoted to their band, and usually don’t accrue tons & tons of debt in order to have that band. The difference between feeling “owed” something and training for a future that doesn’t exist anymore.

    • The difference is that there is no system that exploits the wannabe rock stars by enticing them with the prospect of stardom in order to get them to work for less than a living wage for awhile before being discarded.

      • Perhaps you haven’t tried to earn money as a musician; babysitting pays a lot better. I think that “PhD to be” has a point.

    • That’s because a PhD requires an insane level of financial and personal commitment, not required of stand-up comics and garage bands. You can’t have a day job while you develop your maths research career.

      They’re staying in the market because the minimum commitment to be in the game at all is far too big to be lightly abandoned.

  6. I would like to add that doing a PhD in many countries of Europe is less paid and a less secure job than looking for employment in the industry (i.e. : insider) and is only usefull if one is trying to enter academia. Otherwise, for most positions in the industry, it is useless to apply to a job and often less well considered than 3 years of relevant experience in the industry.

  7. some people pursue something without concern for wealth but rather to fulfill some intangible passion that is the aphrodisiac that blinds us to the reality. I knew the odds getting my PhD of staying in academia that is why I’ve always kept my options open. I think a major problem in some fields is that the PhD has become a copout for recently minted college graduates who don’t adequately think about what they are going to upon leaving the comfort of academia and as a result, crawl back into the womb to stave off reality a bit longer. A Ph.D. is not always the answer: in America, a recent survey suggested that the best performing high school teachers have a lot of work experience and maybe a masters degree. This and personal experience makes me realize that just because you slug it through graduate school does not mean you have some higher intellect and capability than someone who’s been working for 6 years instead. The incentives to get a Ph.D. for a higher glass ceiling really needs to come down and evaluations of employees based on performance rather than number of degrees needs to be reinforced. That being said, if one want’s to be a professor or learn to be an independent thinker, a Ph.D. will finely tune those skill which one should already have before entering graduate school.

    • High school teachers must attain a master’s degree after five years or lose their licenses. You are right in that high quality high school teachers with significant work experience have capabilities that tenured professors do not. In fact, I would argue that with their limited experience with and knowledge of teaching pedagogy, these professors are less well-equipped to actually teach. Lecture is still the preferred method of presenting material and has been proven one of the least effective means of teaching for decades. I have debated for several years now whether or not to earn my PhD, but I have yet to find a practical reason to do so. Given the improbability of me attaining tenure, the pay is not worth leaving my high school position nor is the status or opportunity for advancement.

      In addition, tenured professors seem woefully out of touch with how the real world works. Being an independent thinker is best learned outside of academia where one’s choices are penalized less for what political philosophy you have than practical consequences. Given the closed-minded social structure of universities, academia is the last place one will find open-minded acceptance of ideas; rather conformity is the norm. Look at the failures of professors who have entered the realm of politics in the last 6 years. Their ideas, while perhaps sound theoretically, have failed abysmally in practice, which they then refuse to acknowledge, shifting the blame to other political forces.

      Several years ago, I read an article in NCTE Journal that compared high school teaching of writing to that of colleges, along with the workload, and the difference was remarkable. The high school English teacher works an average of 500 hours overtime in a school year and grade about 800 2-3- page essays, whereas college professors grade approximately 200-300, with a significantly lighter teaching load – an average of three classes a semester to a high school teacher’s six. Where the elitist attitude comes from in professors is anybody’s guess, though I suppose they feel superior because they do less work??? Not sure.

  8. I find the assertion that it is “the insiders (professors) who control the market” to be misleading. Unlike those of drug gangs, structures in academia are generally maintained (if not formulated) largely by administrators who determine salary, availability of positions, and faculty makeup.

    • Not everywhere. In many institutions those doing the actual interviews and determining the “profile” a candidate should have are academics. What bureaucrats usually do is only to give the number of new positions to be opened. Who fills those positions is up for academics to decide. At least, that’s how it is in my countryPhDs (Mexico). Certainly in all Latin American countries, including Brazil, the professors that are doing the hiring decisions now, wouldn’t have been hired if the same qualifications had been demanded of them. When some of them got tenure, they didn’t even have PhDs, let alone postdoc experience or publications.

  9. Actually it occurred to me that the sports world has an even larger base of low-paid wannabes, along with fewer and higher-paid stars than academia. But due to an oversupply of eager labor with ever improving productivity of those already employed, this spread is how most professions are moving.

  10. I think the real problem is not the divide between those who have made it and those trying to get ahead in academia. I like the sports and garage band analogies, because they highlight one crucial difference: The people at the top in sports and rock music don’t get free (or semi-free) labor from the pool of wannabes. In academia, PhD and post-doc publications very often pad the resumes of those at the top, who manage to amass seemingly impossible numbers of publications. This is because, as a wannabe in academia, you have to be “attached” to someone at the top (your PI), and even if you are lucky enough to get first author when you do most of the work (and not everyone does), it remains the fact that one publication each from 5 PhDs and 10 post-docs equals 15 publications for the head honcho (not counting any genuine first-author publications that s/he may produce). It would be one thing if you “merely” risked insecurity and low-income for a shot at a professorship, but it’s more than that: at the same time you are paying a portion of your blood, sweat, and tears to the top-dog in order for the right to stay in the game. Not so in sports or music: even if you are an unknown in football, if you score an awesome goal, it’s 100% yours.

      • Yes that is very true. Senior academics are also the ones that dominate editorial review boards, grant assessment panels, and recruitment committees – giving them a good chance to influence outcomes (perhaps in their own favour).

    • You nailed it. The benefit that insiders achieve is job stability, better pay and working conditions at the expense of the exploited outsiders. The professor benefits more from the accomplishments of the underlings, than any Rock Star, or Pro Athlete. In a world driven by “results” and “metrics” it amazes me how this Medieval Guild system has managed to survive this long.

  11. i think the problem is root from the global currency based economy system which forced everyone pay much focus on currency

  12. Interesting post but heavily biased.

    “The reason for this is that the prospect of future wealth, rather than current income and working conditions, is the main driver for people to stay in the business”

    The prospect of future wealth isn’t innate nor universal and part of cultural beliefs and as such derived from more basic behavior. Recognition in one form or another is basic, starting with those ear-shattering baby screams.

    But, judging from the reactions, you have hit a vein somewhere…

  13. Don’t have no homies cause they jealous, I hustle solo
    Cause when I’m broke I got no time for the fellas. Listen
    Ain’t nothin’ poppin’ ’bout no work nigga, I ain’t no joke
    Fuck what they say and get your dough nigga
    Heavy in the game

    Game’s been good to me
    Game’s been good to me
    I don’t care what it did to them
    Game’s been good to me

  14. Reblogged this on $100 Dialysis and commented:
    Worth a read for those interested in how academia works.
    In the NZ context, I wonder how people see this. Is there a small cartel controlling the lives of the rest who plug away looking for grants in the hope of making the breakthrough?
    Note: The increase in percentage of PhDs between 2000 and 2011 in NZ in the graph in this article is distorted by the large influx of international students in the late 90s and early 00s. This was further exacerbated by the change in rules to allow international PhD students to pay domestic and not international fees.

  15. Yes, Academia is exactly like a drug game, except the professors don’t deal illegal drugs, or carry weapons to shoot rivals, or encourage people to become drug addicts, or wear all kinds of bling, or drive ostentatious cars, or brag about their hoes, or engage in gang warfare. But other than those minor points, it’s exactly the same.

  16. I also noticed that many undergraduate students decide to get a further education (Masters, PhD) without getting any work experience beforehand. Yes, your degree matters but if you do not have the soft skills that are required in this competitive market, most employers will not hire you. If you never held a job, get some volunteer experience or become an executive at your university clubs. You need to have leadership experience.

  17. All of this is true and it become hilarious when you’re at a faculty dinner party and the tenured few start complaining about Wall Street or Corporations. The universities are just as bad.

  18. The people on top like to compare themselves to rock stars or star athletes because it is probably too scary to think about the fact that you could be thrown out and replaced with someone who is paid a fifth of what you earn and nobody would notice the difference. It also offends the neo-liberal sensitivity to be forced to admit that you are the beneficiary of an exploitative system. This is why the drug gang is a better analogy than the athlete: the school doesn’t charge a different tuition fee for courses taught by the “low” level employee rather than the “high” level employee. If the professors were really rock stars, the school could charge more tuition to students who enroll in their courses. The enrollment market would either validate or disprove the notion that the “high level” individuals are worth that much more money.

    They would never do that, of course, because they know that the emperor has no clothes. Huge numbers of adjunct faculty are every bit as good as tenured professors and there is no market or merit based reason for the pay differential. It is purely a manifestation of the toxic and dysfunctional power structure that exists in colleges and universities today.

    • I’ve made the comment before that the academic market is indeed headed for a split, with two levels of degree. First Class “elite degrees taught by “celebrity” faculty, and Economy Class degrees taught by low paid adjuncts. Only the Elite will be able to afford that Ivy covered education, while the teeming masses learn online, and at large state U’s that become diploma mills. Different value will be placed on the Elite degree, not because of the quality of education, but merely because it is “proof” of your Elite status. (The Ivy League has been this way forever)

      Also, when I say “celebrity” I mean just that. Universities are already trying to lure in celebrity lectures to “differentiate” themselves from others. The irony is that the tenured faculty becomes expendable when market forces are applied.

  19. This is a topic that deserves more attention-especially since most people think being a professor is an “easy” lifestyle. High risk, average reward, indeed.

  20. Reblogged this on Io Non Faccio Niente and commented:
    Dualisation is the strengthening of this divide between insiders in secure, stable employment and outsiders in fixed-term, precarious employment. Academic systems more or less everywhere rely at least to some extent on the existence of a supply of “outsiders” ready to forgo wages and employment security in exchange for the prospect of uncertain security, prestige, freedom and reasonably high salaries that tenured positions entail

  21. Then, of course, there is the case of the “Breaking Bad Professor” who evidently wanted to prove that it was possible — but not likely — to score big in both the academy AND the drug world:

    Maybe he assumed the academy’s ethos of winner-take-all would serve him well with the meth cartels.

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