This dissertation provides an economic explanation for Ph.D. unemployment. The discussion begins with a theoretical investigation of policy making in nonprofit colleges. The predictions of this analysis are that colleges will operate less efficiently than for-profit firms; that faculty salaries will exceed market-clearing levels (in most disciplines); and that faculty salaries will tend to equalize across disciplines (while market-clearing salaries will probably vary across disciplines). The theory of rent-seeking unemployment is then presented. When the academic wage exceeds the nonacademic wage, those gaining faculty positions receive rents; so some individual will refuse nonacademic jobs (accept unemployment) and search for rent-yielding academic jobs. The hypothesis is that unemployment rates will be highest in those disciplines where the intersectoral wage differential is greatest. Empirical evidence is presented which supports the major hypotheses of this study. / Ph. D.