Will a PhD make you better off? Not until 33 years later

Some interesting research out of the UK:

Lost earnings and missed workplace experience means PhD graduates will take decades to catch up on postgraduates despite higher wages, analysis shows.

Doctoral graduates will only start to benefit financially from their PhD more than 30 years after embarking on their studies, according to a new study.

Noting it “takes time to fully exploit the PhD premium”, the paper finds that PhD graduates will take 33 years to catch up financially on a master’s degree holder, on average, resulting in a modest payoff for most PhDs assuming they retire after 36 years in the workforce. That catch-up point is much earlier, however, if PhD graduates are women (28 years), work in the public sector (23 years) or take a STEM degree (20 years).

Dr Marini said the single most significant factor was whether a PhD helped graduates achieve a managerial position.

The study highlights the potential oversupply of UK-based PhD graduates, with their number rising from 383,000 in 2012 to 579,000 in 2021, a 51 per cent increase, of whom only half work in academia.

For PhD graduates choosing to work in academia there is a 20 per cent “pay penalty” compared with other sectors. “These decisions are apparently not all about the money,” said Dr Henseke. “However, keeping the direct (tuition) and indirect (lost earnings) costs in mind can help sharpen thinking about what it is people want to get out of a PhD.”

Link: https://archive.is/RYdvr

 

Universities don't pay that much, even for tenured faculty in most disciplines. Those that don't make it into the academy are often poorly prepared to make the transition to industry, so they're not getting the pay premium that might be expected of a trained researcher.

 

PhDs can however open a second line of income as a consultant, adjunct, expert etc. And it can be an income stream that continues into retirement. The key though is not to pay for the darn thing. At age 40 I was able to get a full boat scholarship from state U with grants and pay in a liberal arts field. I treated the whole thing as a six year side gig and was in the black not red when I finished. By the time I retire the PhD will have likely provided me at least $500K in extra income I would not have otherwise had, maybe far more depending how long I work. BUT if I had soley relied on the PhD, yes I would have lost money in the long term because it was in the liberal arts. So PhD aspirants should carefully weigh their economic outcomes and use all possible methods to obtain the degree as inexpensively as possible.

 

Indeed. And so should everyone, PhD aspirant or not, except (possibly) those with inexhaustible resources. I didn't start weighing mine till I was 65 and flat broke. Then I learned how -- and it's working nicely, now I'm 80. No more broke guy -- ever. Then again, my plans don't include a PhD.

And congrats, Jon, on getting the degree you wanted, the way you did. Not something very many people can qualify for. For the rest, it's usually a decision fraught with great potential difficulties - which can include carrying humongous student debt into their old age.

I think Student Loan offices should have a sign:
"Please pay off your loan(s) before you die. We don't want to chase all over Hell after you. (But we will if we have to.)"

 

The advice I received from a friend of mine who was faculty at another university was: you shouldn't have to pay for that PhD, when you apply just ask the Department for all possible grants and aid.

 

That is often but not always the best option. 5 years of lost income for me is 10x the cost of the tuition for the doctorate.

 

That's the less well known advantage of the Master's degree. It makes the holder a credible expert in his field but consumes a fraction of the time, money, and effort of a Ph.D.

 

Wait a while - I'm thinking the Credential Inflation Monster has spotted that. There are very few other things left for it - the food chain is getting shorter... we now have Greedflation and Degreeflation.

 

That is why it might be good to start a PhD after getting established in another field. The PhD took six years of part time effort, so was able to work full time while doing it. That is possible in arts and pseudo sciences but maybe not the hard ones.

 

Wait, 36 years in the workforce, how do they land at that number? If you earned a bachelor's, master's and PhD in 10 years which is fairly common, and maybe a little slow by UK standards, you're 28. Having 36 years in the workforce only puts you at 64. The UK retirement age (at least, the age you start receiving State Pension) is 66 right now, set to go up to 68 in a few years.

 

I disagree and agree simultaneously.

I agree that cost is a factor.

But I disagree that it is a driving factor. What should be important is who you want to be and how you want to live your life.

I was, just yesterday, making out a monthly budget. Two actually. One currently and one in retirement. (It is rapidly approaching.) Both had a slot for student loans. I put the same amount in each, and it didn't bother me a bit. I don't care. What my PhD from Union did for my career, professional identity, and life simply doesn't have a price tag. From a purely financial sense, the ROI has been amazing. But that is only the beginning. I have an documented expertise in this field of distance learning, and the satisfaction of completing a PhD defies description.

NOT a criticism. There are many schools of thought on this and each person must find his or her own path (or to not take it at all).

 

Yabbut maybe the Nurses Aid will call you "doctor" as she ties on your drool bib...

 

Of course, federal student loans are discharged upon the death of the borrower. Sadly, that's my plan.

 

She'd better!

 

It's not quite cut-and-dried with private student loan firms. Some do not discharge loans on the borower's death and file claims against the estate of the deceased. If there is a cosigner, the debt can outlive the borrower -- or possibly be discharged. It seems to depend on the lender's policy - often it's a "may (or may not) be discharged." List here:
https://lendedu.com/blog/dealing-with-student-loan-debt-after-death/#:~:text=Discharge (Cosigner)&text=If the student borrower dies,cosigner will not be responsible.

To complicate things further - Federal tax practice was to treat discharged student loan debt as taxable income. That was taken out of the Federal tax code in 2017 and that exemption expires in 2025. No guarantee it will be renewed then. Some states still levy state income tax on the discharged debt.

The whole thing is a minefield.

 

I wouldn't be surprised if some borrowers just refused to die - forever.

 

Pseudo sciences? Are we talking astrology or dowsing? LOL

 

So proceed cautiously, after you die.

 

Metaphysics? Quantum healing? Orgone therapy? Primal scream? ... I think there's a dictionary of these things. Yeah -- there is, sorta. https://en.wikipedia.org/wiki/List_of_topics_characterized_as_pseudoscience

 

I know a couple of people who include in pseudo-science ALL of psychology, ALL of sociology and anything else to do with human behaviour, human relations or communication. I can't get through to these people - so I'm not one of them.