Is doing a Habilitation a financially viable decision?

Question

I know that a PhD is necessary to enter academia which means you can find a better job and get salary.

But, how about doing a Habilitation in Germany? Does it have any positive impact on the career or financial situation as an international student?

For instance, say someone is barely employed. So, he is supposed to get an "actual" job after the completion of his PhD. But, can he postpone getting the job until he completes his Habilitation? What would be the financial implication?

Answer 1

You have to distinguish things here:

1. A Habilitation is a qualification level (not quite like an academic degree but you can think that it is sort of a grand PhD with additional teaching). This does not mean that you have to be employed but in most cases you will be because otherwise it is going to be a bit difficult to finance your life for the time it takes (normally 4-8 years)
2. A Habilitation used to be the formal qualification level to become Associate Professor and Full Professor. The position of an Assistant Professor (German "Universitätsassistent") was usually the time when you worked on obtaining the Habilitation. Today most job advertisements do not ask for a Habiliation anymore. Instead it states something like "Habilitation or equivalent qualification". This allows hiring of international professors.
3. In daily university life a Habilitation might still be of significant advantage. You (sadly) still hear phrases like "This guys does not even have a Habilitation - what does he even want". Also nobody will questions your ability to supervise students if you have the Habilitation (you can also without but it definitly still helps)
4. In non-academic jobs as in industry you will certainly not need a Habilitation. It might rather be a disadvantage as you will be seen as overqualified.

Answer 2

Your question is a bit unclear (see @Wrzlprmft's comment) and I hope to resolve the confusion. Practically doing a habilitation is very similar to a PhD in Germany. You are hired by a professor and conduct/manage research projects (and you often have the duty to teach).

The difference is you are expected to work very autonomously, acquire funding as PI, supervise PhD students and develop your own research ideas. The professor/university more or less borrow you infrastructure (offices/devices).

The implication is, if you have managed to write and defend a habilitation thesis after some years, you are over-qualified for much more jobs in comparison to "only" having a PhD.

Giving a general answer, how this pays off in industry/academia depends more on the current demand in your field of research. But it's crucial to anticipate that if you don't get tenure as a professor with habilitation (and there is a high likelihood it distinct branches), there are nearly no other positions in the German academic system where your habilitation is an advantage (rather disadvantage). In industry you are then seen as someone who wants to develop his own ideas, manage projects, be autonomous and is maybe hard to integrate in a bigger team as small wheel number #.

The questions here is not to ask what is the hypothetical virtual better pay-off. The question is which kind of person you are. Many people are just not suited to lead, supervise and manage teams (under strong competition) and even when attaining such a position will not be successfully in it long-term. If you are only looking for the bigger pay off and you are an autonomous person, industry is anyway the way to go (at least in Germany where professors cannot have a salary of several hundred thousands)