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I used to think that with every degree you get your salary goes up.
Universities produce more and more PhD's and i learned in economics 101 that once the supply is higher than the demand, the price (here salary) will drop.

Even if you get a little bump in salary, you have to take into account, that you are joining the workforce 3-4 years later and therefore "loose" those salaries.

From an economical standpoint : Is a PhD still worth doing ?

( I know, doing a PhD is not "just" about the money )

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    If the only reason you want to do a PhD is for money, I would consider rethinking doing one at all. – Chris Cirefice Feb 17 '16 at 23:37
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    @ChrisCirefice you're forgetting that money impacts life goals. I could pursue a PhD, but that means another 3-4 years of living poorly. It also means I have to put off things, like getting married, starting a family and buying a house, all things that I value highly, all things that are impacted financial capability. Or I could leave academia and in 4 years time be well down that path. The question in my mind is how quickly could I catch up? I would certainly like to understand the long term economic considerations of this decision. – Phill Feb 18 '16 at 1:11
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    @Phill Fair enough; I just wanted to point out that most PhD students I know are doing it because they care about the development of science, and are not doing it because "the next level of degree = more money", which a lot of people seem to think. All in all, yes doing a PhD makes it really hard to accomplish life goals such as marriage (especially having kids), which some people might want to seriously consider. Personally I am just fine with putting off those goals to make myself a true scientist. For me, it's about what I can contribute to the academic world, and not the money :) – Chris Cirefice Feb 18 '16 at 1:14
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    @Phill i hope you are aware that there are PhD positions that are good paid by institution – SSimon Feb 18 '16 at 2:24
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    Is a PhD (economically) still worth doing compared to what? (What would you be doing instead if you didn't do a PhD? The answer depends pretty strongly on that.) – ff524 Feb 18 '16 at 2:35
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If you look at income alone, it's definitely not worth it - assuming you don't live in a country in which "Herr Doktor" is still highly regarded, and an almost must for high-end jobs in politics and business (like in Germany or Austria).

In industry, there are a few jobs (chip design for Intel or quantitative hedge funds come to mind; maybe in consulting it's a toss up; certainly there are others) where it might help. There are also jobs where it's required to have a PhD (some chemistry research, or such), or at least very beneficial. But outside these somewhat rare positions, HR will put you on a pile called "non-standard degree" which is largely ignored, and you rely on personal connections or quantitative recruiters to even get your foot in.

If you end up in academia as tenured faculty, you get a decent salary with a wide range (e.g., at the top end, Business School finance assistant professors lie around $200k at good schools, to a low end that's a fraction of that if the school or department is less wealthy, or the field less supported by industry). But if you're smart and driven enough to get there, you almost certainly could have long made partner at McKinsey by that time, where you won't go home with less than $1m.

I think the term "still" in your title is a bit off. I don't think this ever was different. You should write a Ph.D. as you're passionate about a field, look for independence, and genuinely love what you're working on. And you should be aware early, and accept, that this is not a choice made for the money.

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    This is the money quote: "But if you're smart and driven enough to get there, you almost certainly could have long made partner at McKinsey by that time." Ph.D.s are more driven. (They need to be, to complete their Ph.D.) So when you look for the income effect of a Ph.D., you need to compare Ph.D. holders to non-holders with the same level of drive. I suspect that most of (any) effect goes away once you take this selection bias into account.. – Stephan Kolassa Feb 18 '16 at 7:35
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    Having known some people who worked at McKinsey, I'm not sure that's a good thing. – Fomite Feb 19 '16 at 23:37
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I would say: "it depends". Basically: What is your field you want to do a PhD in? Does it complement your field of study or is it something completely new and outfits you with unique skill/expertise? Secondly: A PhD suggests -- even if it does not fit to your field of profession -- that you are capable to self-organise, to autonomously pursuit a research question and work it through. To break down a problem in abstract thesis and work problemoriented etc. These are skills that are welcome on the outer academia job market although maybe the knowledge you obtained with your PhD thesis might not be. I am a sociologist and interviewed project managers. Many told me that after my PhD I should get in touch with them, since having successfully done a PhD indicates that you can stay on a project and are disciplined to do it while 'on your own'. Third: Yes, numbers of PhD holders are increasing, however it seems that there is no saturation in the sense you proposed. Employment markets usually do not work the way you might learn in economy 101. Fourth: You said it yourself: doing a phd is not about the money and not about the fame. If your job does not require it, I would suggest, don't do it; it sets back on many dofferent accounts, like family, outer university carreer and longterm planning.

So what I am trying to tell: A scientific degree like a PhD is not so easily transformed into economic capital as one would think. Of course, it creates benefits but it also closes options down (overqualification). IMHO market principles do not work that well on it.

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I have an EdD in Music Education, and now I am a software engineer in test. While I started my degree intending to be an academic in Music Education, I changed careers when I was almost done with my dissertation research, and decided to complete the degree.

The degree itself is not the deciding factor in making money, but because I was pursuing a Doctorate, tech companies were interested in interviewing me, curious about my dissertation research, and excited about the different things I pursued. Point being that you really cannot predict every aspect of life (I had no plan to leave academia), but a degree can strengthen your ability to make connections and get interviews, even if not in your chosen field. I write this to share with you my personal experience, as I can only speak for myself. Best of luck in your decision and endeavors.

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1

This is such a hugely open ended question that I was quite tempted to vote to close it - because the core of this answer is What kind of PhD? and Compared to what?

To use two edge cases:

  • Getting a fully-funded PhD in a field where PhDs do indeed lead to increased salaries, compared to sitting on your couch playing video games and wondering what to do with your life? Yes, it's worth it.
  • Giving up an offer to go work as a programmer for 200K a year at Google to take on debt for a PhD in a field that's very crowded, and the job market is dominated by adjunct positions? Clearly not worth it.

Even if you don't think about those edge cases, it will vary heavily by field. For example, there's good, lucrative work to be had for people with an MS in Computer Science, so a PhD might not be "cost justified". At the same time, in my own field, the work you can do with a Masters vs. a PhD are, in some cases, entirely different fields, so it becomes much more a matter of "If you want to do X, you must go get degree A", and the question of cost is more about mitigating the opportunity cost.

In more general terms though, I'd say "It depends. For technical fields maybe, for liberal arts fields probably not, if you're taking on debt almost certainly not."

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Answer the following question: Do you want to become an academic?

If yes: Welcome to the club then!, you will need to do a PhD and a number of postdocs, and if you work hard at it, you will get an academic position.

If no: Simply do not do the PhD, because among other things definitely it does not help you get a better job (and money); simply because industry measure you based on your knowledge, which is determine through their interview process, and not your PhD diploma.

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  • Generally correct. There may be some few additional jobs where a Ph.D. is desirable. But unless you are going for such a job, the Ph.D. would just be for your own amusement, or to fill time until you find your dream job. Maybe your husband has a Ph.D. and he (or you, or your family) will consider you inferior if you don't... These are all non-economic reasons. – GEdgar Feb 18 '16 at 2:31
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    Even if you want to be an academic, doing a PhD may not be worthwhile. Most PhDs do not become academics. – JeffE Feb 18 '16 at 2:59
  • This is totally wrong. There are many other things you can do with a PhD besides becoming an academic. As a random example, my mother has a PhD in statistics, and she worked for a standardized testing company doing mathematical modeling. – user1482 Feb 18 '16 at 2:59
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    @GEdgar Maybe your husband has a Ph.D. and he...will consider you inferior if you don't ---That's a strong argument for a divorce, not a PhD. – JeffE Feb 18 '16 at 3:01
  • Working hard is not a guarantee of getting an academic position. – anomaly Feb 19 '16 at 5:00

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