The number of individuals receiving PhDs also depends on underlying demographics and college graduation patterns. For example, the large increase in the number of women receiving PhDs is due in large part to the increase in the number of women graduating from college, not to a change in the propensity of those going to college to get a PhD.41 The same is true for underrepresented minorities. Indeed, the most effective way to increase the supply of underrepresented minorities receiving PhDs is to increase the number receiving bachelor's degrees. This is not a trivial observation: a policy maker would achieve larger increases by building the base of students eligible to go to graduate school than by investing, as many institutions do, in changing the propensity of those who graduate to go to graduate school.
In other words, the best way to make progress at the graduate level is to make progress at the undergraduate level. But the best way to make progress at the undergraduate level would be to make progress in k-12. And progress in k-12 would be easier if we improved underlying social conditions, because there are plenty of things in a person's environment that matter more than their school. And that takes us to problems that are hard for anyone to solve and are impossible for the scientific community to solve.
Also, the 41 in the quote is for a footnote, in which Stephan breaks it down more precisely and says:
Richard Freeman estimates that 70 percent of the increase in the ratio of women to men getting PhDs is due to growth in the ratio of women receiving bachelor's degrees relative to men receiving bachelor's degrees. Likewise, 63 percent of the increase in the ratio of underrepresented minorities to non-minority PhDs is due to growth in the ratio of minority to non-minority bachelor's degree recipients. Source: Freeman's tabulations from data obtained from the Survey of Earned Doctorates (National Science Foundation 2011c and the Appendix) and the U.S. Department of Health, Education, and Welfare. See Stephan 2007b.
"Stephan 2007b" refers to a presentation at this meeting, but I cannot find a link to the presentation itself.