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How much should stipends sway decisions?


cjw10

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I'm curious how much other people are considering the amount of their stipend in making a decision. Is just "getting by" enough, or no? Let's assume we're talking about a TA/RA stipend and not a fellowship.

 

I think it's very relevant in making a decision. For one, who wants to worry about money in grad school when you already have enough to stress about. You also want be able to afford a low level of comfort during grad school, and once you factor in the cost of living differences funding can often be 2X at one school compared to another. Some of us also have high credit card payments, and some schools offers won't allow us much extra money to make these payments. Others really want to be able to afford a car in grad school.

 

It will definitely play a factor in my decision (although many other factors play a more crucial role). The way I see it, there's nothing wrong with letting it influence your decision (on the margin of course ;) ).

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npv difference between stipends

 

npv difference in your expected career earnings

 

seems to be a good start

 

 

On top of that, you can add your consumption discounting factor, and your access to credit.

 

Also, make sure you get to know as much as possible about the difference in living costs. This can be a bit complicated...

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I'm curious how much other people are considering the amount of their stipend in making a decision. Is just "getting by" enough, or no? Let's assume we're talking about a TA/RA stipend and not a fellowship.

 

What my idea of throwing darts at the admissions letters wasn't a good enough decision criteria? :p

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My take is similar to YoungEconomist's. I'm sure you've heard it said that one of the greatest scarcities of modern times is a scarcity of attention. If you're upset that you only had ramen with some sliced up bologna in it for dinner, you're not going to be able to devote as much attention to your problem set as if you had some shrimp and fried rice. For grad school, I'm going to consider money, but only so much that I don't have to think about money once I'm there.
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Is it possible to avoid thinking about money while studying towards an econ ph.d.?

 

Fiat, or with some standard?

 

Think Robison Crusoe and his closed economy, finds Friday, they can trade consumable goods.

 

Base dissertation on that.

 

Bam, no money involved.

 

Maybe...

 

:rolleyes:

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Fiat, or with some standard?

 

Think Robison Crusoe and his closed economy, finds Friday, they can trade consumable goods.

 

Base dissertation on that.

 

Bam, no money involved.

 

Maybe...

 

:rolleyes:

Still have to pass the macro comps... what to do about that LM curve?

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I think it's very relevant in making a decision. For one, who wants to worry about money in grad school when you already have enough to stress about. You also want be able to afford a low level of comfort during grad school, and once you factor in the cost of living differences funding can often be 2X at one school compared to another. Some of us also have high credit card payments, and some schools offers won't allow us much extra money to make these payments. Others really want to be able to afford a car in grad school.

 

It will definitely play a factor in my decision (although many other factors play a more crucial role). The way I see it, there's nothing wrong with letting it influence your decision (on the margin of course ;) ).

 

i've been thinking about the 22k i would be making at UNC. that puts me in the 15% tax bracket, which leaves me with a little over 19k left over (and no state taxes). Spread out over 12 months that is almost 1,600 a month. In Carrboro, that could fetch me a halfway decent apartment and a healthy food budget. Compared to the way I am living right now, that is a very comfortable life style.

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If you're in your 20s and comparing funded offers, I'd only go with the higher offer if you're indifferent between the schools on other grounds. You're talking about, what, no more than $50k total vs. 40+ years of difference in earnings from a potentially better career path? (Not to mention any differences in how much you'll enjoy living in a particular city and attending a particular school for the next 4-5 years...)

 

Another way to approach this--since not all departments are created equal in terms of funding, especially this year--is to compare your offer to other offers made at the school. Is one of the schools signaling a strong commitment to you by making an especially good offer, even though their offers are in general on the low end?

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If you're in your 20s and comparing funded offers, I'd only go with the higher offer if you're indifferent between the schools on other grounds. You're talking about, what, no more than $50k total vs. 40+ years of difference in earnings from a potentially better career path? (Not to mention any differences in how much you'll enjoy living in a particular city and attending a particular school for the next 4-5 years...)

 

Another way to approach this--since not all departments are created equal in terms of funding, especially this year--is to compare your offer to other offers made at the school. Is one of the schools signaling a strong commitment to you by making an especially good offer, even though their offers are in general on the low end?

 

The first comment is spot on--basically what I've been thinking, but needed to hear someone else say.

 

As for the second comment--what would the disadvantages of a relatively average offer be? For example, UCSB is my top choice, but NCSU offered a nicer package (including an add'l 5k fellowship that they only give to one incoming doctoral student/year). What are the real benefits of a department making a strong commitment to a student?

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If you're in your 20s and comparing funded offers, I'd only go with the higher offer if you're indifferent between the schools on other grounds. You're talking about, what, no more than $50k total vs. 40+ years of difference in earnings from a potentially better career path? (Not to mention any differences in how much you'll enjoy living in a particular city and attending a particular school for the next 4-5 years...)

 

Another way to approach this--since not all departments are created equal in terms of funding, especially this year--is to compare your offer to other offers made at the school. Is one of the schools signaling a strong commitment to you by making an especially good offer, even though their offers are in general on the low end?

 

This may be true. But a lot of future potential earnings has a lot to do with ability to research, and pedigree may be negligible after 10 years. If you can't publish, you perish.

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If you're in your 20s and comparing funded offers, I'd only go with the higher offer if you're indifferent between the schools on other grounds. You're talking about, what, no more than $50k total vs. 40+ years of difference in earnings from a potentially better career path? (Not to mention any differences in how much you'll enjoy living in a particular city and attending a particular school for the next 4-5 years...)

 

I don't completely agree because this neglects degree. If one school is offering me $25K and the other is offering me $15K that's a pretty significant difference. Even if the $15K schools is slightly better than the $25K school, I'd probably choose the $25K school.

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I think money is highly signficant because of what it signals. If a school offers you money it's a signal that they think highly of you. If, by sad chance, you happen to have a bad first year, a school that offers you money is much more likely to keep you around for another year. However a school that decided to not offer you money implictly signaled that you were not among their top choices that year. So if you have a bad year, that school is likely to take the grades as confirmation that they were correct: You are a weak student and hence should be dismissed. Even if they don't dismiss you from the program, it likely will be much harder to get a decent professor to offer to serve as your disseration chair.

 

In the past I've recommended that a student go to a school ranked 15 that offered him a signficant stipend over going to a school ranked about 10 that did not offer him money. I felt at ease making that suggestion...but if the choice had been the 15th ranked school versus the 2nd ranked school without money,....well, that choice would be much more difficult.

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i've been thinking about the 22k i would be making at UNC. that puts me in the 15% tax bracket, which leaves me with a little over 19k left over (and no state taxes). Spread out over 12 months that is almost 1,600 a month. In Carrboro, that could fetch me a halfway decent apartment and a healthy food budget. Compared to the way I am living right now, that is a very comfortable life style.

 

What do you mean, no state taxes? NC has a state income tax...I mean, it's not a huge amount of money, but I make little enough that I pay just about as much to NC as I do in federal taxes, since the lower rate is made up for by much lower deductions and exemptions.

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What do you mean, no state taxes? NC has a state income tax...I mean, it's not a huge amount of money, but I make little enough that I pay just about as much to NC as I do in federal taxes, since the lower rate is made up for by much lower deductions and exemptions.

 

fellowships are exempt from state taxes, or so i've been told. i presume you're living in durham?

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I think money is highly signficant because of what it signals. If a school offers you money it's a signal that they think highly of you. If, by sad chance, you happen to have a bad first year, a school that offers you money is much more likely to keep you around for another year. However a school that decided to not offer you money implictly signaled that you were not among their top choices that year. So if you have a bad year, that school is likely to take the grades as confirmation that they were correct: You are a weak student and hence should be dismissed. Even if they don't dismiss you from the program, it likely will be much harder to get a decent professor to offer to serve as your disseration chair.

 

In the past I've recommended that a student go to a school ranked 15 that offered him a signficant stipend over going to a school ranked about 10 that did not offer him money. I felt at ease making that suggestion...but if the choice had been the 15th ranked school versus the 2nd ranked school without money,....well, that choice would be much more difficult.

 

Thanks for the advice. It's definitely something to consider. I guess this verifies that faculty DO know about/use these forums :D.

 

fellowships are exempt from state taxes, or so i've been told. i presume you're living in durham?

 

Can anyone verify that fellowships are exempt from state taxes? Also, I'm going to go out on a limb and say that CA state taxes are higher than NC, yea?

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Thanks for the advice. It's definitely something to consider. I guess this verifies that faculty DO know about/use these forums :D.

 

 

 

Can anyone verify that fellowships are exempt from state taxes? Also, I'm going to go out on a limb and say that CA state taxes are higher than NC, yea?

 

I posted some info on this in the Decisions Thread. Basically, check your state, but from the 5 states I checked, it is correct.

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