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Why I Decided NOT to Pursue a PHD in Economics.


Daniel

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econjobrumors.com

 

Just kidding!

 

First, my profile:

Undergrad: Large state school, Econ program ranked in the 40-70 range

Major: BS Econ

Overall GPA: 3.45, Econ GPA 3.50

Grad: Public Policy M.A, Good school.

Grad GPA: 3.67

GRE: First time (2008) 720Q 570V 4.5AW, second time (2011) 800Q 650V AW-Pending

Math Courses: Calculus I (A-), Calculus II ©, 3 Stat classes (third one with calc and programming) A-, A-, A. Post Grad: Linear Algebra (A), Calculus III (A), Differential Equations (A), Math for Econ I & II (A, A)

Econ courses: The whole undergrad she-bang, assorted A's and B's, and A's and B's in the core (Micro, Macro, Econometrics). Grad Micro and Macro (Master's level) - (A, A).

 

Research Experience:

1. Currently doing some research with a Professor at my undergrad institution. This is key.

2. MA thesis, some econ, but nothing on the level of an econ academic paper.

 

Other Experience

Think Thank internships, private sector internship (microfinance).This is key as well

1. My 4 recs are good: All professors from top 10's (one maybe top 15, depending on who you ask). 3 undergrad, 1 from my MA (he's an econ PhD).

 

Anyways, like many others, I was very interested in an Economics PhD. I liked the romantic idea of being a professor, had the utmost respect and admiration for my professors - who were, 99% of the time, amazing teachers, counselors and individuals. I liked doing economic related research, enjoyed writing papers, and hence thought that a PhD would be a natural progression. I worked hard this summer, working on the research project and taking 3 summer classes, and studying for the GRE.

 

While doing actual economic research this summer, I realized: I don't really care for all of this. Time after time, I enjoyed doing policy analysis and private sector work a lot more. Talking to my professors, and with some self-reflexion, I came to the realization that a PhD is not for me. I would be better served by going to the private sector, or the non-profit route. I enjoyed my time in the private sector and think-thanks way better than my time doing research, even when the economic research was supposed to be aligned to my interests.

 

I'll be honest: I was lost after my graduation from my MA. I wasn't really sure what I liked to do, or what I wanted to do. Preparing myself for a PhD seemed to take my mind off the decisions I needed to make.

 

I knew I wasn't going to get into the top 25 schools, and even top 40 would be a stretch, and that definitely played a factor. There's no reason I should toil away for 5-6 years and then settle for a job I won't be that passionate about.

 

In short: I am thankful I realized this now and not after I make commitment to go to school. There is no shame in deciding a PhD is not for you. I've done research, and found there are a lot of economics related things you can do without one, like policy analysis, private sector work (finance, banking, etc...) that can be closer to what an undergrad thinks economics is.

 

Finally, my advice: If you can, try to do an internship at a non-profit, one in the private sector, and spend some time doing RA work for a professor, even if it is for free. It will give you a much clearer picture to what you want to do with your life.

 

The point of this was to others (PhD's and non) to chime in and discuss the issue of "Hey, an econ PhD is not for me", or the other side of this: "Hey, this is why I realized it was for me"

 

Best of Luck,

 

Daniel.

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Good for you for realizing before several years worth of sunk cost go in. Incidentally, I'm doing an internship with the govt. right now. What I'm learning is a 9-5 sucks, and govt. fiscal reports are incredibly spotty. Not only do they change methodology from year to year without telling me all the time, but you can expect good news to be printed up front and the bad news to make it into a footnote if you're lucky. Also, I'm a little surprised but no one listens to music in my office. It took me a day to say, this is dumb, and start streaming pandora while I worked.

 

P.S. The prof I'm RAing for was listening to pandora the last time I went in, and he took half this week off.

 

P.P.S. If you've been following this debate about whether Academics are too detached from practitioners

A great divide holds back the relevance of economists | The Great Debate

I've found that Mark is at least right that forecasting seems to be a more prominent part of at least one govt. economist's job (my boss) than you'd think given the proportion of literature being published on it. Incidentally I've yet to find any practical use for anything I've learned in grad micro or metrics.

Edited by Charis
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I find the divide to be temporal, not categorical, meaning that the results of academic research typically cannot be reaped for many years until other areas of our knowledge are mature enough to complement or be complemented by an old idea. New breakthroughs are often based on a novel research or innovation from years, if not decades, ago. This has been especially true in physics (e.g. research on GMR in the 80's and present day large-capacity hard drives), engineering (e.g. frequency-hopping spread-spectrum technology developed in the 40's, noted for the involvement of actress Hedy Lamarr, and present day Wi-Fi), and medicine (eg. genome-sequencing is a basic science project with little present applicability on most of the genes studied, but there is no question that we're building a foundation for future medicine and biotechnology). I do not see how it would differ much for economics, perhaps we simply don't know enough yet for these little theories and curves and functions to work together in a grand scheme yet.

 

I'm sure academics are used to the accusation of being out-of-touch and not solving problems NOW, this debate has been going on for ages. But precisely because of its apparent and perceived uselessness, academic work is seldom performed in the private sector (as it doesn't equate present profitability and profit 40 years from now is discounted to nothing), and the research is often funded by non-profit organizations and government bodies that have the foresight to want something that'll stand the test of time, a system that is in place to ensure that we're looking ahead far enough despite this incessant and moot debate about being out-of-touch (ok, what I just said but without sounding elitist).

 

Edit: just wanted to point out this is a response of the aforelinked "great debate" and it is in no way an attempted invalidation of OP's decision not to pursue a PhD in favor of more hands-on work :)

 

P.P.S. If you've been following this debate about whether Academics are too detached from practitioners

A great divide holds back the relevance of economists | The Great Debate

I've found that Mark is at least right that forecasting seems to be a more prominent part of at least one govt. economist's job (my boss) than you'd think given the proportion of literature being published on it. Incidentally I've yet to find any practical use for anything I've learned in grad micro or metrics.

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I don't think an internship gives an accurate picture of what working at an institution is like. It takes about 6 months in a new job to get a good handle on what it is you're actually supposed to be doing and can do it independently. A two month internship is the Pepsi challenge; a sip when what you should really be seeking is attitude to the whole bottle/career. The first sip is not an unbiased sample.
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The decision/experience aspect of choosing to do an economics PhD is something that is not discussed enough on these forums. My "gut check" moment happened when I was shut out of PhD programs after finishing my undergrad. I decided to pursue a masters with a thesis both as a profile-booster for getting into a PhD program and as a way to add a little more experience on the academic side of things. Doing RA work and my own research for the last two years cemented my desire to pursue a PhD. While I obviously wouldn't wish a shut-out for admissions on anyone, I think it helped me realize that I did want a PhD because, quite honestly, I didn't really know what the game was all about then. I had a dream-like perception of what an academic position was like without enough hands-on experience to see what a career in economics academia really entailed. I would also say that while there are always doubts when making a decision like pursuing a PhD, it definitely pays to explore options and be confident-enough about pursuing the degree before starting a 5-year degree and realizing it's not the right thing for you halfway through the program.
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honestly, if you do drop out, is it that big a deal? Obviously I'm ignorant as I ask this, but you do end up with a masters, or is the masters meaningless?

I'm one of those people who may not be 100% sure if a PhD is right for me, but if I do enroll, I'll be going in thinking that the worst that could happen is I drop out and get a masters. Is that a dangerous way to think?

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I was in a similar position a few months ago. I had just finished a master's in finance after my undergraduate in econ and felt like I could really enjoy a career as a professor in economics or finance. However, I also wasn't receiving any job offers so the thought of taking four more years for a Phd with the potential of a six figure income at the end of it didn't seem like such a sacrifice.

 

In the end I decided I needed to experience the "real" world and now have a job that I enjoy. I haven't completely ruled out the Phd, but I agree with the idea of not deciding something just because it seems interesting. You really need to get a taste of whatever you are considering doing so you can make an informed decision.

 

Also, fidinho, I hope this isn't offensive, but it's pretty clear that you are an international student. My experience with international students in my program is that your opportunity cost is significantly lower than that of US citizens. If you don't find a good job with someone who will sponsor you, your options are to go home or continue in school. That's what many of the students in my program did, some just getting another master's degree. If you can get a Phd program to pay you a decent stipend then you are right, you don't really have much to lose. But many of the other people on this forum face a lot higher opportunity cost.

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Also, fidinho, I hope this isn't offensive, but it's pretty clear that you are an international student. My experience with international students in my program is that your opportunity cost is significantly lower than that of US citizens. If you don't find a good job with someone who will sponsor you, your options are to go home or continue in school. That's what many of the students in my program did, some just getting another master's degree. If you can get a Phd program to pay you a decent stipend then you are right, you don't really have much to lose. But many of the other people on this forum face a lot higher opportunity cost.

 

Yeah you are right. As an international student with no dependents, the opportunity cost differs greatly.

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I was in a similar position a few months ago. I had just finished a master's in finance after my undergraduate in econ and felt like I could really enjoy a career as a professor in economics or finance. However, I also wasn't receiving any job offers so the thought of taking four more years for a Phd with the potential of a six figure income at the end of it didn't seem like such a sacrifice.

 

In the end I decided I needed to experience the "real" world and now have a job that I enjoy. I haven't completely ruled out the Phd, but I agree with the idea of not deciding something just because it seems interesting. You really need to get a taste of whatever you are considering doing so you can make an informed decision.

 

Also, fidinho, I hope this isn't offensive, but it's pretty clear that you are an international student. My experience with international students in my program is that your opportunity cost is significantly lower than that of US citizens. If you don't find a good job with someone who will sponsor you, your options are to go home or continue in school. That's what many of the students in my program did, some just getting another master's degree. If you can get a Phd program to pay you a decent stipend then you are right, you don't really have much to lose. But many of the other people on this forum face a lot higher opportunity cost.

 

I don't understand this line of reasoning... obviously internationals who graduate with a degree can find it harder to work in the US, but they can work in their home country where even if wages are lower, cost of living is often lower, and the opportunity cost in real terms is therefore all but identical.

 

Many would like to stay in the US, and therefore decide to continue to do a PhD in order to stay here, but that is not really an "opportunity cost" issue, just a location preference.

 

Maybe you mean the potential upside for internationals is more attractive, or that they find the PhD to be more beneficial to them than US students, but I can't see an argument for that either.

 

Forgive me if I have missed the true point you were making, I am just seeking clarification.

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If they have fewer good options available to them then their opportunity cost is lower. Maybe that doesn't make sense to everyone, but having talked to a lot of international students, I believe that is a big reason that many programs are full of international students. I'm sure there are a lot of other reasons as well. I know certain cultures value education more etc. but I think a big part of it is the lower opportunity cost.
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Guest 8675309

Its much easier to have reasoning that jobs on private sectors have more relevance or add value more than detached academics do, but I think that is generally opinion of someone who is not in industry or someone who has deep bias against academia. I work in the corporate office of a large commercial bank in the u.s. (meaning we are traditional bank deal with things like commercial real estate, medium business loans and consumer credit) in a quantitative analytics devision (a section that employs Ph.D.s) . I hold a masters degree from an u.s. institution, but my program was comparable to one of the more quantitative m.a.'s like the ones in Canada or Europe.

 

My experiences has been. The work in Academia is much more demanding and more quality is expected of you. In the corporate sector a lot of time is wasted on trying to prove you add value or ensuring your not blamed. The quality of work isn't also the most important thing, rather the story the work tells. I'm sure many people find immense satisfaction working on the private sector, but my experience has been I have a hard time justifying mine or anyone elses salary since I spend most of my time using cut, paste in spread sheets or developing poor statistical models (because the boss has decided apriori what variables need to be included despite their significance or the regression maybe spurious.

 

I'm personally going back to Ph.D. because I realize even the worst academic placements are probably more honest profession than where I am. What ever politics exist and academia (there are quite a bit), meritocracy exists to a far greater extent.

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If they have fewer good options available to them then their opportunity cost is lower. Maybe that doesn't make sense to everyone, but having talked to a lot of international students, I believe that is a big reason that many programs are full of international students. I'm sure there are a lot of other reasons as well. I know certain cultures value education more etc. but I think a big part of it is the lower opportunity cost.

 

I don't understand what you mean by fewer good options? In what sense does an international student have fewer good options ignoring location?

 

I actually would wager that the opportunity costs of a PhD to an international student are much higher than for US students (with an appropriate purchasing power conversion), but the benefits are higher too. That is, the wage premium for internationals who return home with a US phd is far greater than the wage premium for US students which may even be negative.

 

I think what you mean is that in an overall lifetime sense, international students find it easier and more beneficial to complete a PhD than a US student does? Am I correct?

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I don't understand what you mean by fewer good options? In what sense does an international student have fewer good options ignoring location?

 

One thing that occurs to me is if we're talking about Econ undergrads then the US has many more financial jobs than elsewhere. In fact, I would argue that we export financial services. Thus, more econ related jobs. Also, we have a much more complicated banking/lending system than many other parts of the world so that could also be an area creating more jobs. Finally, a lot of MA econ jobs are forecasting or consulting work. I'm not sure but I could imagine there would be fewer jobs like that abroad just because a lot of those firms get a lot of work from wall street so they would want to be huddled near areas like NY or DC.

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Guest 8675309
A good fraction of internationals are coming from 2nd and 3rd world countris which means the opportunities for skilled employment in their own countries is less. This is why 3rd world countries usually exhibit a brain drain problem. Also international students generally have to find jobs in u.s. on H1B visa's, which lowers their job oppurtunities within the U.S. (many companies and government jobs will not hire H1B, and academic job market isn't big enough to hire all economists). I think the only international students who really have better than domestic student employment opportunities are Canadians, because of the TN Visa. One other factor to consider is that the best Academic jobs are concentrated in America. I don't mean that in a way to bash foreign institutions, but the best ranked departments are concentrated in mostly America and the pay is often substantially better. Right now a tenure track position at non Ph.D. granting schools in the U.S. can pay almost 100K + Benefits, 3rd world Countries rarely pay anywhere near that amount (think 25 to 30K) and even Europe can be substantially less than that, though that depends widely on the institution one is looking at. (Ones who are reputed or mimic American system can pay close to American Salaries.
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I can see your argument for preferring US academic jobs to non-US academic jobs (except maybe some European and Canadian depts) since the quality of your peers in a dept has a huge effect on the quality of your work (both through co-authorship opportunities and early peer review opportunities).

 

But if you're doing development being a visiting professor to a host of different 3rd world departments might be optimal in terms of stimulating your researching muscle and giving yourself more chances to do field research. I'm kinda surprised more development professors don't spend time as visiting professors in the 3rd world.

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