The ranks of new Ph.D.'s and adjuncts these days are mainly composed of people from below the upper-middle class: people who believe from infancy that more education equals more opportunity. They see the professions as a path to security and status.
Again and again, the people who wrote to me said things like "Nobody told me" and "Now what do I do?" "Everybody keeps saying my doctorate gives me all kinds of transferable skills, but I can't get a second interview, even outside of academe." "What's wrong with me?"
Well, the job markets sees a few things wrong with the typical Ph.D. student compared to someone who has similar levels of IQ, openness and conscientiousness but managed to avoid getting sidetracked in graduate school.
1. They are signaling that they are not the type of person who wants to deal with the real world outside of the bubble of academia.
2. For graduate students in technical fields, they are demonstrating that they prefer prestige status over monetary opportunities. There is also the potential for status clashes with superiors in the workplace.
3. In younger Ph.D. students, the Ph.D. track is often chosen because no other track was readily apparent. Choosing this track only to go into the workforce later on suggests that they don't really think about how the world works beyond one or two steps.
4. They spent all of their time learning how to become a professor, gave up on that, and are now competing with peers who have put the time into figuring out how to create value in the market.
The Ph.D. drop out is much better positioned than the student who delays entering the real world by finishing their thesis. However, there are some positions such as in biochemistry where in order to have influence in the real world an advanced degree is more beneficial than harmful.
Tyler Cowen has some additional thoughts on why people get Ph.D's in the humanities.