It's been just over one year since I submitted my first job application to a non-academic position. I completely remember this one, and I even wrote down my login credentials for the application site, so I thought it might be nostalgic to check it out. The funny thing is, the site still says "Application Under Review". So much for an applicant tracking system...
In trying to stick to logical arguments as I have brought up in previous posts, this entry is a way of proving (albeit in a hand-wavy sort of way) why someone should not go to grad school based on cumulative earning power in a person's life. I have seen this argument before, and it is typically used to show that getting a university degree is a good investment in the long run financially. So, with some information I have cobbled together from various sites, here are the 7 life paths of a scientist that I am going to evaluate:
Overall assumptions:
a. Career (academic or otherwise) starts at 18 and ends at 65.
b. Tax brackets: < $60000, 15%; $60000 - $80000, 20%; >$80000, 25%.
c. Salary increments are performed every year (not for grad positions or postdocs).
Career paths:
1. No university: $0 student loans, starting salary = $30000/year, ending salary = $60000/year.
2. B.Sc. to industry: 5-year degree, $50000 student loans, starting salary = $45000/year (this is actually what I was offered out of undergrad), ending salary = $100000/year.
3. Ph.D. to industry: 5-year B.Sc. + 6-year Ph.D., $100000 student loans (as per my situation - I was 'fully funded' at $20000/year), Ph.D. salary = $20000/year, starting industry salary = $60000, ending industry salary = $120000/year.
4. Ph.D. + 3-year postdoc to industry: As above, except 3 years of earning in industry are lost to $40000/year postdoc salary (NIH standard level).
5. Ph.D. + 5-year postdoc to professorship: starting professor salary = $80000/year, ending = $120000/year.
6. Ph.D. + 10-year postdoc to professorship: As above, but 5 more years are lost to postdoc wages.
7. B.Sc. + M.D. + residency to medical doctor: $200000 student loans, 5-year B.Sc + 4-year M.D. (assuming no money is made although this isn't true due to clerkships) + 5-year residency @ 75000/year. Starting professional salary = $150000, ending = $250000.
And the winner is: M.D.
No surprise there; I really just put that in for comparison. Second place goes to "Ph.D to industry". Here is the final cumulative lifetime earnings (net after taxes, and minus student loans, in millions of dollars):
1. M.D. - $5.2
2. Ph.D. to industry - $2.56
3. Ph.D. + 5-year postdoc to professorship - $2.52
4. B.Sc. to industry - $2.39
5. Ph.D. + 3-year postdoc to industry - $2.36
6. Ph.D. + 10-year postdoc to professorship - $2.29
7. No university - $1.84.
So what is the moral of the story? Besides the obvious fact that students shouldn't overlook the M.D. route, a Ph.D.'s earnings are maximized if they can obtain industry employment immediately following their grad degree, and having a Ph.D does not give you that much more in lifetime earnings compared to only a B.Sc. (a difference of ~$150000). The overall cumulative earnings decline depending on the number of postdoc years you have under your belt before going to industry. In essence, you lose the difference between a postdoc salary and the high-end (near $120000) salaries that you would make if you would have cut to industry straight after the Ph.D.
In terms of these earnings, a professorship is not a bad option, but this analysis does not include the probability of securing this position. In life sciences in 2011, only 15% of Ph.D. grads held secure, tenure-track positions 5-years following Ph.D. graduation. Not to mention that attrition rates in grad programs are ~30-40%. So, if you are starting a grad program today, you have about an 8% chance of having a professorship after 5 years of postdoc. I don't think anyone would choose this path if they actually heard numbers like this. 8% is quite the lottery for a job that you are supposed to be training for. I can't think of any other occupation that has such a bleak outlook (apart from other Ph.D. grads). You would be better off picking anything but the professor route. So, if professorships are not on the menu, then it is not necessary to go to grad school for training, so you might as well cut out after the B.Sc. as you would make about the same anyway as a Ph.D. grad.
Another thing that isn't mentioned is the relatively poor quality of life for grad students and postdocs - do you want to be spending your younger years sacrificing and worrying about living expenses for the sake of having more earning power when you are closer to 65? I truly think it is a very good option to enjoy life early and forget about grad school altogether.
For me, I am in my 5th year of postdoc, with no tenure-track positions in sight. In terms of the numbers, I would be better off now even waiting a couple of more years (up to 8) until I find a professorship, as each year that passes as a postdoc decreases what I can make in industry. It isn't so much of choosing which way I want to go because of the money I can make - right now it is solely based on what jobs are available. This past year, out of ~80 applications to industry and ~15 to academia, I had 3 interviews (all industry). Out of the 3, I got to the on-site stage for one, and didn't get past the phone interview for another. For the third one I have had a phone interview so far, and I am waiting for feedback. 3 interviews in one year really sucks, because when one finally comes around, it is so stressful to think that the next one won't be for another 4 months or so, so if I blow it...
Anyway, the point is: There is no reason to go to grad school. Let the white-hairs figure out how they can populate the professorship ranks with B.Sc. graduates, say no to Ph.D.s and postdocs, and think long and hard about professional degree routes.
I welcome your comments and criticisms.
I've been thinking about this sort of analysis for a while and I think you might be discounting a couple things (or it's just possible all career paths are different).
ReplyDeleteMy career path went - BA (ended with ~$25,000 debt, got degree in 1996, so this is unrealistic now), academic research technician (3 years, $30K/year), Grad Student 7 years ($25K/year, but only $8K additional debt), Postdoc (3 years/~$40K/year), Industry PhD Scientist (starting $88K/year + ~$10K annual bonus + stock options).
So two things I think you're discounting. 1) Industry starting salary is generally much more than what you're estimating and 2) Many people in industry and academia will spend some time as a research tech before going to grad school, adding time and decreasing lifetime earnings, but I also think having this increased experience makes one more successful in their career (in my opinion, more motivated too).
Also, at this point, you absolutely need the postdoc to snag an industry scientist job. Our company actually does not hire PhD scientists without a postdoc - we have too many applicants and that's one way to screen some out. It sucks, but that's just the way the job market is right now.
Thanks for doing this analysis though - I have many techs asking me whether grad school is worth it or not (techs who have very good jobs, reasonable career paths and decent compensation at a young age) and I have trouble verbalizing why, especially since everything ended well for me despite the long time as tech/grad school/postdoc. But this puts things nicely in perspective in terms of earnings. If you've got a good job with great work/life balance, why leave it for the promise of a better career, but an uncertain job market after 10 years of training? Really hard to tell people to go, unless they're dead-set on the academic life.
Thanks for your comments. You are right, I didn't think about the people that take a pause in their schooling in between undergrad and graduate school. In my experience, most of my colleagues came straight from undergrad. The numbers that I used for industry are completely arbitrary - I know more about how salaries work on the professor side and not on the industrial side.
DeleteI would definitely tell the techs to stay where they are given the circumstances, but again, I am quite removed from how industry works. Thanks again for your insight.