About one-third of psychologists teach and do research at a college or university. These psychologists specialize in traditional research areas such as experimental, physiological, cognitive, developmental or social psychology. The remaining two-thirds work in applied settings. The majority of these are clinical or counseling psychologists working in a hospital, clinic or private practice. Industrial-organizational and school psychology are the other two largest applied specialties.

The percentage of psychologists working in applied settings has increased steadily over the past 15 years. The academic job market has become poorer due to the declining number of 18--2 year olds in the American population. The number of college students will continue to decline until the mid-1990s. The surplus of college teachers has held academic salaries down. On the other hand, the number of applied psychologists has grown steadily over the past several decades and the future is beginning to appear brighter for academic positions.

In response to these trends, graduate schools are placing increasing emphasis on applied research and training for nonacademic career roles. In 1982, for the first time, more new PhDs in the traditional academic specialties took jobs in nonacademic settings than in colleges and universities.