Hi CCers! I am thinking about grad school, specifically PhD and inevitably this question popped up: When is getting a PhD a good idea financially?
This seems like a broad question (and it is) but here is a general breakdown of what I am wondering:
In which fields does it make sense to get a PhD? See, if someone wants to go into business or finance, they’re probably better off getting an MBA, if humanities, maybe just a Masters? (correct me if I’m wrong), if some fields of STEM (eg Pharm) then why not do PharmD or Medical school?
MBA, Medical school, PharmD all seem MUCH better financial ideas than dedicating oneself to a ~7 year study of a niche subject that might not be relevant to most things and thus leaves few job prospects. I just wanted to make sure I’m not missing some very lucrative job career that comes after getting a PhD?
I’m guessing this leaves the ‘serious academic’ types (future history, lit, econ professors) and those who want to conduct something like biomedical research their entire lives. Am I missing something?
My kid is a physics student in the area of condensed matter. She plans to work in either a national lab or industry after finishing her PhD. It seems like a plan with reasonable job prospects from what I can tell.
My daughter is currently applying to PhD programs in Biomedical Engineering because she loves learning in this field and loves research. She wants to do the types of jobs that involve research, the actual setting where it will lead her remains unknown since she has to get in and get the degree first. Is it a great idea finacially? I don’t think she cares about that so much right now. She wants to keep going to school and while a stipend is a low salary, she will get paid to do it. Know your reasons for pursuing a PhD before taking it on.
If you’re thinking about lucrative job opportunities where a PhD is required/preferred then the obvious ones would be financial “quant” jobs (usually a math or physics PhD or maybe economics) and artificial intelligence research at tech firms (usually a computer science PhD or perhaps linguistics).
A PhD in the biological sciences and/or chemistry can have a lot of career paths outside of academia. Especially in the private sector. Lots of science based companies hire PhDs: pharma, biotech, agrobusiness, finance, etc. A PhD in a science based field can also lead to patent law.
Most of these types of PhDs are fully funded…meaning that there is little out of pocket expense. While MBA/MD/PharmD may have greater job prospects, you’ll be funding your own education with a lot of loans.
From a pure financial perspective, a PhD rarely makes sense. The people who benefit most from a PhD are those who go to grad school in a higher academic tier than their undergrad: ex. Alabama for undergrad but MIT for their PhD.
The bottom line here is that one should never try to get a PhD for financial reasons. It generally doesn’t pay appreciably better than a master’s degree. A PhD is really about the career path rather than career earnings.
One exception is if your BA/BS graduation happens during an economic or industry downturn, so that trying to enter the labor force means being unemployed, and possibly unemployable later since long term unemployed people tend to be last hired during a recovery (employers assume that since no one else hired you, you are not worth hiring, or that your skills have decayed). If you have an offer of funded graduate study, it may be worth waiting out the downturn doing graduate study instead of becoming part of the unemployment statistics.
I think it depends on what you mean by “a good idea” or “makes sense”.
If you’re comparing a PhD to other professional degrees in high-paying fields like pharmacy or medicine, the PhD is almost never going to come up on top if you’re just looking at salary. It’s also difficult to make a direct comparison because PhDs don’t necessarily lead straight to a specific field. If you get a PharmD, chances are you are going to be a pharmacist, and we know how much pharmacists make on average (around $122K). If you get a PhD in chemistry, there are a lot of things you can do, some of which may pay more money than being a pharmacist, and many of which won’t,
There’s also debt and opportunity cost. A PharmD is going to put you in a whole lot more debt than a PhD, and so will an MBA or medical school. Physicians make a lot more money than PhDs on average, but for the first 10-20 years of their careers, their loan repayment may end up bringing their spending power closer together than you’d expect, depending on what that PhD is doing. And MBAs may not make much more money than a PhD. That just depends on where the MBA came from and what kind of work the person does afterwards.
On the other hand, there’s an opportunity cost to doing a PhD. MBAs only take 2 years and then you’re earning money. PhDs take 5-7 years or more. So that’s 3-5 years that you’re not earning money that you theoretically could have.
Yes. You are missing the fact that humans aren’t completely rational economic actors, and don’t make decisions purely on the basis of financial concerns and future salary. Interests, passion, job satisfaction, and career growth play into that. I have a PhD, and I was well aware of the fact that I had the potential to make more money had I gone to (and finished) medical school. But I didn’t want to be a physician.
It depends on the field you want to be in. In fields where PhD degrees are not required, it almost never make financial sense to obtain a PhD degree. However, some fields (such as academia, research in science) practically require PhD degrees to perform adequately, so you don’t have a choice in these areas.
Some fields where PhDs are required for many but not all jobs-
Bioinformatics, actuary science, data science, machine learning, artificial intelligence, semiconductor manufacturing, chemist, biotechnology/genetics research, physics research scientist in any branch of physics, research psychologists, biologists including medical sciences, ornithology, microbiology and biotech, meteorologists and climate modeling, fluid dynamics, aerospace fields, planetary sciences, nuclear engineering, some jobs in chemical engineering especially in the oil industry like PhD grads, geology, geophysics and geochemistry, control theory and other branches of electrical engineering.
PhDs will allow you to teach at universities, but that type of career varies from very low pay in some fields like music, or humanities and social sciences, to much higher paying fields like chemical engineering or computer science.
US Government agencies including Department of Interior, Department of Agriculture, Department of Commerce, Department of Energy, and Department of Defense, hire a lot of PhD educated scientists.
PhDs in social sciences, especially work for think tanks and private industry as well.