Gradschool is great. Here's how to do it right.

2/27/2014 02:56:00 PM
There's a lot of nay-sayers on grad schools these days. Matt Yglesias is one of them. They like to claim that graduate degrees are expensive, teach you nothing, and don't increase your earnings or employment prospects. Now, I don't doubt that useless graduate degrees exist--don't bother with MBAs from no-name for-profit colleges. But a masters or phd from a mid-tier or elite-tier university is great.

First, the claims that graduate degrees don't pay is simply wrong:

Correlation isn't quite causation, but bear in mind your employers are aware of this chart, and correlation is a powerful signal.
I'm not quite sure what the education nay-sayers think of this chart. Maybe they argue that correlation isn't causation, and that what's actually happening is that better workers are selecting into grad schools. I'm sure that that does explain part of it, but it really doesn't change the calculus at all--by not going to grad school, you are signalling to employers that you are not grad school material. That harms employment prospects even if grad schools have no effect on productivity. There may be some professions, like blogging for Slate perhaps, where having a graduate degree really doesn't change how much employers are willing to pay. The editors at Slate can easily observe Matt Yglesias's writing quality and web traffic, so they don't need an economics diploma on his wall to know he's a great economics writer (I'm assuming, of course, that Yglesias's leaving Slate has nothing to do with his lack of education). You also don't need a graduate degree to work at McDonalds. But for nearly all mid to upper-level positions at any firm or instution, you will find that having a graduate degree will increase your starting salary by a lot. You'll also find that a lot more people will return your calls when you inquire about job openings.

But more importantly, in my view, the biggest error that these nay-sayers make when they argue against grad school is that the assume grad school is all signalling and no actual learning. This is clearly false. Getting a graduate degree in computer science really does make you a much better programmer. A Master's degree in English really does make you a better writer and editor. In my own case, I'm sure I got the job researching the health economics of pediatric sickle cell at the leading children's hospital in the US in large part because I have the graduate credential in economics from Cornell. But on the other hand, the reason why I'm able to do research at this level is because I studied graduate-level health economics and econometrics at Cornell. I suspect that Yglesias and others think that your employers will just teach you what you need to know, but this is false--my job isn't something where my manager just points to something and asks me to do it. To a large extent, I'm operating by my own parameters--they expected me to start with enough expertise to marshal these projects from nothingness to publication. Of course, I have great collegues who are willing to lend their expertise as well when I ask for it, but there are no training sessions, no one showing me how or even what to do, I'm expected to have learned all that at grad school, and that's exactly where I learned it. This is all to say that even if grad school wasn't causally related with better earnings and employment prospects--though it is--it would still be worthwhile solely for the human capital it you get from it.

Something else I want to add here is that statistics on graduate degrees probably understate the gains they offer. That's because most people who go to grad school, especially PHD programs, do so with the aim to do research afterwards. Research is a notorious public good: it is hugely valuable to society, but usually the people who do it cannot profit from it once it becomes public knowledge, so we end up being severely under-invested in research. As a result, researchers are usually not paid much. You can graduate from a PHD program in biology and end up a modestly paid minion in some NSF-funded lab somewhere. These workers are motivated in part because they love research, and in part because they hope to break into "the profession" and get a higher-paying academic appointment somewhere with their own lab and minions. But that doesn't change the fact that they had the option of making fantastic salaries elsewhere making biological weapons for DARPA or what have you. Time it right and as a private-sector PHD environmental economist you can become a millionaire from a couple years of contracting with Exxon if you catch my drift... Point is, low-earning graduate degree holders are typically low-earning by choice.

Gradschool naysayers are being deeply deceptive and unhelpful, biased by their own unusual experience. Fortunately, I have a couple of pointers that may be helpful:
  • Many employers will pay for your graduate degree.
    For example, if you get a full-time job at Cincinnati Children's Hospital Medical Center right after you graduate with a bachelors, one of the standard benefits is that they will pay for your graduate courses (at any accredited school), which you can take while working full-time. There is an annual limit to how much they will pay, but I know lots of people who got totally free masters degrees from great universities this way.
  • PHDs are about research.
    So are many masters degrees. If you are only looking for a credential and really don't like research, find a work-oriented terminal masters program. The only good reason to do a PHD is if you want to do research. End of story.
  • Collaborate, collaborate, collaborate.
    Here's a big secret: having two papers where you did only half the work really does count as more than one paper where you did all the work. In grad school, your job is to coauthor on as many different papers as possible. Gradschool is a foot-in-the-door for tons of opportunities that you cannot have any other way, so if you don't get anything out of gradschool, it is entirely your own fault. A good rule of thumb is that if you don't personally know most of the students and all of the professors in your graduate field, you haven't collaborated nearly enough.
  • Most universities will let full time employees complete graduate degrees
    I've known several people who ended up with PHDs simply because they worked for the university after graduating from their bachelors. Typically they will let you take any classes for free (provided they have enough space in the class), and if you impress the right people with your ability to research, they'll give you the degree. Also, working at a university is kind of a free credential when it comes to submitting research to publications--they often won't notice that it doesn't say "assistant professor" after your name.
  • Adjunct teaching doesn't pay.
    DO NOT MAKE THIS YOUR MAIN SOURCE OF INCOME. Based on how much I've observed them working, I calculate their hourly wage to be around $12 an hour at major universities. That said, I do suggest teaching a class or two in addition to a full time job. It's fun, it's illuminating, it's something you can only do with a graduate degree, and it does pay a little bit.
  • Programming and Statistics are the most marketable skills
    Don't let yourself leave gradschool until you've mastered programming and statistics. Gradschools have so many resources you may never have again.
  • Gradstudent RA positions are kind of crap.
    Typical RA jobs are just cleaning data and summarizing journal articles for some well-funded professor somewhere. Which is to say, RAs do more clerical work than research. By contrast, right now, I teach principles of economics courses and do health economics research full-time. That's basically exactly like grad school, except I make twice as much and don't pay tuition, and do actual substantive research for publication where I will be first author--without doing clerical crap for someone else's research. Grad students don't seem to realize that they are allowed to turn down RA positions and seek employment elsewhere, even outside the university. That's hard to do in, say, Ithaca, New York. But if you are a grad student at Ohio State University, I recommend you look for better-paying jobs downtown. Turning down RA funding may cause you to loose the tuition remission too, but remember, many employers will pay your tuition.