The higher ed blog I follow recently had a piece on a report commissioned by the Canadian government regarding outcomes for Ph.D. graduates here in Canada.
The findings were highly discouraging. I suspect the situation for PhD’s in Canada is even more dire than in the U.S. The main take aways of the study are:
The number of PhD graduates in Canada is growing while the number of open tenure-track positions is stagnant or declining
Non-academic sectors have not significantly increased their uptake of PhD graduates
The labour market outcomes for PhDs vary significantly by gender and discipline, and the economic return of a PhD is lower for younger graduates compared to PhDs in general
The report provides a chart that shows average salaries for PhD graduates by field of study during the first 5 years following graduation as well as the difference in earnings between master’s and PhD holders over that same 5 year period. Science PhD’s in particular in Canada it would seem have no greater value than a Master’s degree. The report went on to further analyze the economic return of a PhD relative to a master’s degree, the question being: Are the additional earnings gained by PhDs high enough to offset the foregone earnings and earnings growth they might have attained by stopping at the master’s degree? The results show that especially for men under the age of 40 with PhD’s in either the humanities or sciences the answer for the most part is no and that it actually result in negative financial results. In fact according to the data it would take 16 years for men under 40 with a PhD who graduated in 2016 to catch up to what they would have earned had they stopped at a master’s degree.
In terms of employment opportunities for graduates it would appear that in Canada the private sector is not inclined to invest in R&D. They provided a graph that shows the percentage of total gross domestic product that Canada spends on research and development vs the U.S. and OECD countries and the figures are not encouraging. The reason for that is because relative to the US and other OECD countries, a much higher percentage of R&D in Canada is conducted by universities. So it would seem that if as a new PhD graduate you wanted to pursue a career in research your best bet would be to seek employment as tenure track faculty. Unfortunately the survey shows that your chances of getting a job as a researcher at a Canadian university is very low as the number of assistant professors in Canada has actually declined since 2007.
One of the article’s points which I quoted was that the alternative jobs that you speak of don’t require a 5-7 year pre-investment in a PhD degree. For most non-academic jobs, 5-7 years of job experience will be much more valued than a PhD in a non STEM/technical field. Getting a PhD while also working a non-related job fulltime generally results in a longer track in obtaining the PhD and/or not getting the PhD paid for by the university.
I understand your points, but many of the non-teaching jobs that PhDs might take don’t require a PhD…so why pursue a PhD then? It could be preferable to get an MBA, or MPH, etc., not only from a future earnings perspective, but from one of opportunity cost as well. I would be curious in hearing from any PhDs as to the reasons they chose to pursue a PhD, if they didn’t want to teach. I certainly believe that PhDs bring a lot of skills to the table in non-teaching jobs, but at least in management consulting, they are often underpaid relative to the MBAs.
Valid points. But for many people, the pursuit of a job isn’t predicated purely on the salary.
The idea that a Phd us purely for teaching/higher salary isn’t likely. They should have asked how many wanted to teach and could not find a role ( if that was the argument they were trying to make).
And there are many non MBA’s in management consulting. In fact, specific expertise can be more useful than a general MBA.
Sometimes true. Yet…and I’m just an n of 1, the PhDs at my firm consistently make less than the MBAs.
Part of the reason for that is they have relatively less work experience when they are hired…and their degree does not make up for the lost years of work experience in earning power. Full stop.
Another issue is that ultimately one also has to be able to sell at many management consulting firms in order to progress…and selling is a skill set that (IME) PhDs develop less frequently and less well than those with other types of advanced degrees.
From the report I linked it would appear that approximately 80% of students going into a PhD program in the sciences and engineering initially do so with the intention of pursuing employment in academia.
Most commonly, studies show a declining interest in academic careers as students
near the end of their degree. In a 2010 survey of 4,109 students in chemistry,
physics, and life sciences at 39 of the most research-intensive American
universities, the percentage of respondents who identified a faculty position with
an emphasis on research as the most attractive career path was significantly
higher for those beginning their degree versus those near the end (Sauermann &
Roach, 2012). The same results tended to hold true when controlling for student
cohorts. In a longitudinal study of 854 science and engineering students surveyed
over the course of their PhD training, the vast majority (80%) indicated an interest
in an academic career at the outset of their studies, but this had fallen to 55%
three years later, with 25% of the students losing interest entirely in securing an
academic position (Roach & Sauermann, 2017).
Also it would appear that desire for a career in academia is even higher for those pursuing PhDs in the humanities and the social sciences.
While some surveys indicate that students in the sciences and engineering often
lose interest in academic careers (Sauermann & Roach, 2012; Roach & Sauermann,
2017), these results have not necessarily been mirrored among PhDs in the social
sciences and humanities. A survey of social sciences and humanities PhD holders
in 13 European countries, working in a range of professions in various sectors,
found that respondents’ desired career goals tended to remain focused on
academic and research positions (Ackers et al., 2014). While graduates were able to
face the reality that an academic career might not be forthcoming, and were
willing to embark on alternative careers, their desire for an academic position
remained. In fact, the authors found that PhD training in these disciplines tended
to reinforce a preference for an academic career, with “many who had not initially
considered an academic career changing their minds during their studies” (Ackers et al., 2014).
One data point “your firm” does not make it true. I can add that MBA’s based on MY experiences lack context and depth in mc. They often try to sway the conversation back to the things they know. Creativity and solid skills like math, stem, other are kacking. Can they sell, yes. But no one listens to an MBA regarding AI ( or any specific subject) when a Phd speaks in detail. No one.
And selling is specific to people. Some are great. Some are not.
In terms of financial compensation, it’s oftrn based on a combination of factors ( including work experience). It’s much easier to replace an MBA mid to late career than someone with a Phd in your companies’ expertise. I think you are overstating tge worth of an MBA at tge expense of a Phd( perhaps that’s tge path you took so you think it’s best).
I’d tell my kids go deep and be irreplaceable in terms of what you do. The big money is paid to Those with unusual combined skills. Plus the work is more interesting. We’re a STEM family so an MBA would be a 3rd degree. Personally have found it easy to hire those skills.
I don’t disagree with any of what you are saying, and like the advice to forge an irreplaceable skill set.
But, how do explain that PhDs make less money than MBAs (at least in the first jobs out of school (because that’s the easiest data to get, maybe only data)? In mgmt consulting the difference in starting salary for an analyst/consultant job can be dramatic, with PhDs starting at $70K-$90K vs. MBAs $120K-$150K (rough ranges, can vary based on large vs boutique firm and/or geography). That is a big hole that is hard to close over a career.
So many factors. MBA hits the ground running with his/her expertise Phd needs to learn the soft skills. But, I think your numbers for Phds are way off. We have three on staff and started all at far higher salaries. ( One is even offshore and isn’t paid that little) In addition, I think your MBA numbers are high. Why? Could be two reasons, someone in your company values MBA’s or you are in an area with a shortage, etc. In our area, MBA’s are common so it’s the soft skills that make a good candidate ( with any educational background). Some do well financially some don’t ( soft skills matter the most)
Yes, it’s hard to make up a gap but not over a career. The director, VP, partner and CEO have vastly different salaries. One can jump from analyst to CEO with the right skills. Or stay in a fixed role. All effects income.
Yes exact same job. So, not only does the PhD go into the same job as a typical MBA, they make less money for it.
I will say that the PhDs do great, and because they are cheaper this firm has started hiring more PhDs than MBAs…because M7 MBAs are really expensive. There are a lot of PhDs looking for jobs, and they just don’t command the salaries that they probably should. Now that there are relatively more PhDs in the firm than before, it has created a bit of an issue now though that there aren’t enough ‘sellers’ coming up through the ranks. Not all MBAs are able to ultimately sell either, but generally more of those have developed that skill than the PhDs. At least so far.
Remember I’m just talking about consulting. I’m confident in my salary ranges, I’m involved in the hiring process and we use a couple of (expensive) headhunters who help us stay on top of industry trends. Tell the PhDs and MBAs to become headhunters, LOL
Well they obviously haven’t taken the course on how to sell themselves. Maybe you are looking for general analysts.
There is real competition for Phds in some fields. They are hired/reviewed when finishing their Phds. And they are highly revered for their expertise. They are also used to raise VC. You cannot be lacking a Phd to speak to the VC’s and some clients.
And they review the technology ( kick the tires).
100% STEM. Again, there are so many STEM PhDs looking for work.
You and I agree on a lot! PhDs do need to sell themselves better, that helps make my point that (again just in consulting) they are relatively less successful at developing that skill set than MBAs.
I just looked up Kellogg’s 2020 placement info…average consulting salary was $153K and 36% of the graduating class went into consulting. Important to remember it’s tough to get accepted to Kellogg (or any top MBA program) without at least 4 or 5 years prior work experience. The MBAs do speak with the VCs all the time, as do the PhDs
Could be geographical as well. We are in the Boston area and many companies search for Phds. There isn’t an excess. Also many fields need them. We have tons of Phds in the area and many more MBA’s some from schools as good as Kellogg.
In industries which are growing fast ( I don’t want to share the exact field for which we hire). the demand is high. Phds are not good at selling themselves. But they are needed and they compare packages. So companies would be silly to offere lower wages than the market warrants/ Plus Phds tend to want to do a certain type of work. They aren’t looking to do just anything. They are particular.
I guess you are in a different field. I can’t see a Phd and MBA doing many of the same jobs except maybe a starter role as an analyst ( but even there one is going to look at the tech/product and the other is going to look at the numbers so maybe on a team but I can’t see them being interchangeable).
We have come across Phds who weren’t hirable despite their knowledge. These folks were unable to understand they needed to be part of a team or they needed to understand that they weren’t the smartest person in the company. But this can happen with any candidate.
Speaking as an employer generally and specifically as to investment banking, I think many employers who have the luxury of allowing a longer term gestation period to develop employees like liberal arts types when hiring from undergrads. The ability to critically think, analyze across data sets, communicate clearly (written and oral) and to be able to go outside of the box is valued. Many, if not most, of my colleagues involved in hiring probably preferred the math/physics/econ (or even English/history/philosophy with a good amount of quant courses) major from a LAC than a finance major from any school other than maybe Wharton for our analyst program.
However as we get to more senior levels of hiring (and greater compensation), specialization becomes more important. The higher the level, the more immediate return is required. To reiterate @Mwfan1921’s point, relevant job experience is going to be more directly related to compensation and job responsibility than any tangentially related advanced degree. In banking, even in the most “cerebal” department, research, a person who has had real life experience at say Exxon Mobile is going to be in front of the PhD in petroleum engineering with no work experience.
Isn’t it obvious that you don’t do a PhD to maximize your career earnings, whereas you choose an MBA for exactly that reason? Clearly there are a bunch of PhDs that have ended up being in the right place at the right time, for example working in say AI or battery technology. A few years ago the hot topic seemed to be natural language processing, but I don’t know any linguists (and I know quite a few) who chose it because they thought it was a route to riches. Before that it was search. And way back in the day my PhD (in network optimization) also turned into a moderately hot topic, though it wasn’t something I particularly exploited.
I thought the WSJ article generalized too much about social sciences. There are a lot of opportunities in policy formulation (eg think tanks) that are being strongly influenced by the advances in economic data analysis that have only come to the fore in academia over the last 10-20 years. It’s not all about medieval history and 19th century literary criticism.
I think it would be more interesting if the article looked at whether the cutbacks have also been impacting subjects that are actually in demand. For example I was surprised to learn that MIT is not admitting new students to its masters in city planning this coming year (https://dusp.mit.edu/degrees/admissions ), which is the top program in the country and a subject that shouldn’t be constrained by a lack of jobs in academia. It seems the explanation is that most people from 2020-21 deferred because this year’s course wasn’t perceived as useful when it was offered online only.
As per the report I posted above there maybe two aspects to this. Firstly:
Central to the challenges faced by many PhD graduates is academic culture (i.e.,
the norms and values that shape academia and the people working within it).
Academic culture can promote a community for people with common interests,
enabling them to collaborate, to learn, and to develop and share new ideas. At the
same time, some aspects of academic culture can contribute to the challenges felt
by PhDs during and following their studies, particularly for those who do not want
to stay in academia or for those who feel as if they have “failed” in achieving their
desired academic career. The norms, practices, and values of academic research do
not necessarily align well with those of different sectors or employment groups,
nor do they always align with those of students themselves.
The PhD is the primary pathway to becoming a professor in many disciplines, and
the traditional view still exists that a faculty member’s role in PhD education is to
train the next generation of faculty. The PhD student’s supervisor has a large hand
in guiding them toward academic success and is also a key figure in shaping
expectations and career ambitions. Academic supervisors, having themselves
been trained in academia, may be ill-prepared or even unwilling to help their students transition to non-academic careers, which may demand different skill
sets and ways of approaching research and scholarship.
And secondly:
While PhDs generally graduate with a clear sense of the knowledge they have created and gained, they often lack recognition of their skills and abilities — a so-called skills awareness gap. PhD graduates may also be unaware of careers outside the academy or how to pursue them. Many PhDs complete their studies without having developed non-academic networks or learning the skill of networking, despite its importance for finding employment.
PhD graduates are also challenged by the fact that some private sector employers do
not perceive benefits in hiring PhDs, believing they lack certain essential attributes
or professional skills. While the private sector recognizes that PhDs have highly
specialized knowledge, it also perceives them as lacking adaptability, practicality,
certain communication and teamwork skills, and skills increasingly needed for
21st-century work, such as collaborating with diverse actors and incorporating
multiple perspectives that cross discipline and sector boundaries.