Monday, January 16, 2012

Is Graduate School a Ponzi Scheme?

A couple of years ago, this article ran in the Economist. In the article, the author takes the point of view that the pursuit of a PhD degree is a waste of time. Whether or not you agree with this perspective, it is important to consider the points being made. If you are, or have been, a graduate student, you probably learned much of this during your time in graduate school.

1. Imbalance of supply and demand 
The article gives some very compelling statistics indicating that there are simply not enough jobs to employ all the PhD students trained annually in professions (as academic professors) for which they were trained. The article suggests that more than 100,000 new PhDs were conferred between 2005 and 2009. There simply aren't that many academic jobs.

2. Limited earning potential 
Good news: your PhD degree will earn you about 26% more than your bachelor's degree. Now the bad news: a Master's degree, which takes considerably less time will earn you about 23% more than a bachelor's will. The numbers here are simple: if the outcomes you are primarily concerned with are financial, the PhD doesn't seem to make sense (or cents) for people.

3. A source of cheap labor 
The article points out one of the more depressing aspects of the PhD degree: Graduate school is a source of extremely cheap labor for the university. Graduate students perform much of the labor in the experiments and also tend to teach many of the courses offered by the university. This is a problem because there are incentives, very unfortunately, to admit more graduate students and confer more PhDs despite the limited earning potential and imbalance of supply and demand.

PhD Comics

Again, I highly recommend reading this article, especially since most of the people who we seek advice from about graduate school tend to err on the positive side of things. In terms of the article, that graduate students are a source of cheap labor becomes apparent in the first semesters of graduate school. I must have taught smallish sections of undergraduates for 10 semesters during my graduate years (e.g., grading exams, serving as a liason between students and professors). Graduate students do this work to cover tuition costs and for a small stipend. I could have used a little extra money during graduate school.

And unfortunately, your earning potential doesn't improve a whole lot after that. When I start my new professor job at the University of Illinois in June, it's not going to make me a part of the 1%. If money is your primary concern, there are plenty of jobs you could do where you don't have to work for peanuts for the first 6 years.

Let's not forget, I'm one of the lucky ones, fortunate to land an academic job despite the imbalance of supply and demand caused by the huge number of PhDs conferred yearly. Others will have very different career paths, and will land jobs in other fields, for which they don't have explicit training.

So, much of what is written in the economist article is true about graduate school. And I think it is important to consider these problems with the PhD conferral system. For one, academic institutions might want to consider shrinking the number of graduate students they admit annually. I also think this article sheds light on the importance of labor unions for graduate students. These unions can protect the work rights of graduate students whose work can be taken advantage of by the university. The article also highlights the importance of finding a great graduate mentor--a professor who will look out for your career and your best interests. Unfortunately there are a lot of individual differences in mentoring ability (Cronan-Hillix et al., 1986).

On the other hand, I think that the rewards of an academic life are not likely to be financial. Rather, the rewards lie in the intellectual pursuits of academic work and the challenges that occur during the time that one is a graduate student. These intellectual pursuits are a privilege that graduate students enjoy, and perhaps no other occupation has them. Sure they are combined with long hours and little pay, but I think many students sacrifice these things for the possibility that they will discover something new, and forever add to scientific knowledge.

I also believe that earning a PhD and working in an unrelated profession doesn't have to be seen as a failure. There are many jobs out there in the Bay Area alone that require statistical training, or web design experience, or survey/interview experience. These jobs are perfect for someone with the rigorous experience a PhD requires. Sure they probably don't earn the type of salary earned by a corporate CEO, but they represent an employable path for PhD students who are finished with academic life and ready for the professional world. Graduate students should entertain the idea that they are entrepreneurs as well as researchers. It's not always a sad story for graduate students, and I think the Economist article missed that a bit.

I'm interested in your thoughts about the Economist article and your experiences in graduate school. Is graduate school a Ponzi Scheme?

Cronan-Hillix, T., Gensheimer, L., Cronan-Hillix, W., & Davidson, W. (1986). Students' Views of Mentors in Psychology Graduate Training Teaching of Psychology, 13 (3), 123-127 DOI: 10.1207/s15328023top1303_5


  1. It's easy to get bitter about these issues. I'm not entirely convinced that the value of education can be subject to a return-on-investment analysis though. Is the academic job market fiercely competitive? Absolutely. But the skills gained in getting a Ph.D are invaluable.

    1. I completely agree. I do think (and this includes myself) that some students go in not knowing the competition they're facing. It helps to know what you're up against before starting grad school.

      Thanks for reading!

  2. I think all graduate students have had that conversation with their peers where they complain about having to pay for the privilege of doing someone else's work. Personally, I didnt' pursue a PhD because I thought I would make lots of money, but because I love the work. It is competitive, but if you love it then it's worth competing for.

    1. Maybe that is something future grad students should remember: if you decide to go to grad school, make sure you enjoy the work that grad students do. I think the enjoyment can inoculate you for some of the things grads must contend with in academic life.

      Thanks for the comment!

  3. Interesting and important information. It is really beneficial for us. Thanks

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  5. Getting my PhD in chemistry was a huge waste of time. I don't need an academic job, but I do need a job. I went to grad school for the express purpose of becoming a scientist. My goal has always been to go into industry. If a PhD at a top ten program and a postdoc at a top ten program don't get me that, then a PhD can be nothing but a waste of time. I don't care about the other things I can do with my degree. I think the value of the PhD is highly overstated for those things and I'm not very interested in them either. If I knew that sacrificing the best years of my life would yield nothing, I would have just skipped grad school and done something else. As it turns out, I'll probably have to do something else anyway.

  6. As an undergrad upperclassman I have flip-flopped once or twice on all this (aka self-doubt) because it's always seemed to me that people either idealize/romanticize, or devalue pursuit of a Ph.D. I think I'm done flip-flopping though... lol. I was frightened out of my initial decision to pursue a Ph.D by a disheartened social network acquiantance who's now completed a degree in cognitive psych. He is always more than willing to tell horror stories about grad school, all the reasons getting a Ph.D is such a horrible idea, and to avoid it at all costs unless you're going for a "real" science like biology, engineering, or math. (Most recently, he seemed to show strong opposition to classification of psychology as a "STEM" science at all.. something I've always thought was a good idea, at least for the more "hard science" based fields like psychopharamcology or neuroscience (both of which are prospective career paths for me.) I feel that to discount these as "soft" sciences largely invalidates such fields entirely. Maybe I'm biased by personal interest on that though. ;)

    Anyway, what changed my mind mostly was just my own reflection and realization. I felt like I had no real passion for any of the alternative career prospects I was sort of feigning interest in to fool myself into thinking I had an obvious "easy way out" of a Ph.D program. lol... I don't think getting your tuition covered is exactly getting paid peanuts. If your interest has led to something bordering on internet/reading addiction (as mine has), getting paid for free access to peer-reviewed journal archives and publications sounds almost too good to be reality. I've often joked that I've been cursed in the sense that what I'm passionate about truly, basically mandates that I go all the way and get a terminal degree, with whatever the trials and tribulations are that come along with it... and in spite of all the talk lately about how grad school is a Ponzi Scheme.. and despite all the other stereotypes about grad school... lol.

    1. It sounds like you'll fit right in at a grad school RJ, LOL

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