An Economic Perspective: Graduate school

Forty-two percent of Geneseo students enroll in graduate programs directly following graduation. They go to earn a master's, Ph.D., J.D., MBA, M.D. or one of many other advanced degrees. Are these degrees actually worth the investment?

The basic idea behind higher education is that it will get you a better job, more money and greater prestige. A bachelor's in psychology doesn't go far; you'll probably get a job as a counselor. Going to graduate school means you can be a professor, doctor or lawyer.

Does this mean that everyone who wants a rewarding, high-paying career should go to graduate school? No.

Graduate school is an investment. Different programs vary widely in duration. A master's degree may take as little as a year to complete, but a Ph.D. requires an average of six years to finish.

Graduate students typically earn either no money or a small salary. You must borrow roughly $20,000 each year to cover living expenses in addition to tuition. Doctoral candidates often get paid for teaching undergraduate courses, but at a rate of just 20 percent of what a full-time professor makes. Students permanently lose potential income they would have earned were they not still in school.

But here's the really shocking news: On average, those who earn a doctorate only make 3 percent more than people with master's degrees alone! In many fields like engineering, technology and architecture, those with doctorates actually make less than those with master's degrees.

The main reason for such a small salary differential is an oversupply of highly educated people. Ph.D.s are meant to be for research and tend to be extremely specific. Between 2005 and 2009, 100,000 students graduated with doctorates, but only 16,000 new professorships were created. The remaining Ph.D.s stay on as research assistants, teach as adjuncts or transfer into the private sector.

Being a research assistant or adjunct is academic hell. Getting a job in the private sector is very difficult because academic skills often have little value in the marketplace. A specialty in medieval history with a thesis on the rivalry between Siena and Florence in the 13th century is not going to land many positions.

The same logic applies to degrees in law and other areas. People believe that if they receive enough education, salary and prestige will be guaranteed. This is hardly the truth.

As more people enter the market, wages decrease and unemployment increases. The best and brightest students go into law school and accumulate up to $200,000 in debt. To their surprise, most can't find a job that pays off their loans.

Don't be fooled. A tough job market affects the entire intellectual spectrum. Research shows it's just as likely for the dumbest students to drop out or be unemployed as the smartest.

Don't let this scare you from pursuing higher education. You should carefully weigh the costs and benefits of higher education before attending. Maybe you want to talk about 13th century Italy for the rest of your life. In that case, you may be better off making less money.u

This article is the work of the Economics Society and reflects the views of its author. The views of the Economics Society are not necessarily represented in this article's content.