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A PhD is not worth it!


rsaylors

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When I was a nuclear engineer with a BS working in industry, my very first job at 22 years old paid ~$7000 less than what a fresh nuclear engineer PhD from Michigan was getting paid as a new assistant prof at my undergrad institution. That is not a typo -- he only made about seven thousand dollars more than me... and his PhD alone took longer to get than my BS.
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That is not a typo -- he only made about seven thousand dollars more than me... and his PhD alone took longer to get than my BS.
But the pursuit of academics is so much fun, with so many intrinsic rewards... It's just that business is something that's to squishy for math/physics/chem majors and to 'evil capitalist' for communist majors like antro/sociology/psych. Anyone who cares about business gets a better MBA than they could PhD with the same GMAT; Which is another problem for buisness schools.

 

Most schools are ranked on Ph.D. productivity, the make their bones by growing on the back of more profs needed for more Ph.D. students. Not so in business. Our high pay comes from the fact that we essentially teach those who weren't smart enough to be good lawyers the triad that will allow them to make the most money. This makes the masters a big-time money maker but the Ph.D. a big-time money looser; thus creating fewer and fewer business Ph.D. programs.

 

Schools that pay philo full profs 40k are paying mana starting profs 130k... This is stupid over paid, but we pay for ourselves by teaching MBA courses.

 

But keep in mind there will be many 2 year MBA students starting at 2 or 3 times YOUR salary.

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But the pursuit of academics is so much fun, with so many intrinsic rewards... It's just that business is something that's to squishy for math/physics/chem majors and to 'evil capitalist' for communist majors like antro/sociology/psych. Anyone who cares about business gets a better MBA than they could PhD with the same GMAT; Which is another problem for buisness schools.

 

Most schools are ranked on Ph.D. productivity, the make their bones by growing on the back of more profs needed for more Ph.D. students. Not so in business. Our high pay comes from the fact that we essentially teach those who weren't smart enough to be good lawyers the triad that will allow them to make the most money. This makes the masters a big-time money maker but the Ph.D. a big-time money looser; thus creating fewer and fewer business Ph.D. programs.

 

Schools that pay philo full profs 40k are paying mana starting profs 130k... This is stupid over paid, but we pay for ourselves by teaching MBA courses.

 

But keep in mind there will be many 2 year MBA students starting at 2 or 3 times YOUR salary.

 

I got into arguably the best Ph.D. program in my discipline with a GMAT that would only be considered mediocre for most MBA programs.

 

And it's not so much that we're (egregiously) overpaid necessarily because we teach the MBA courses (yeah MBAs are cash-cows for schools), but it's because there's an increasing shortage of business professors holding doctorates. It's no surprise that many students after graduating take industry jobs because it just pays that much better -- or that people forgo the Ph.D. altogether and just go for an MBA and make just as much (and many times more) money. The increasing salary of the professor is in reaction to try to ameliorate that salary gap/opportunity cost people have to incur if they want to eventually be professors.

 

The fact that business schools (like other professional schools [i.e., med, law, etc.]) typically get to keep a large amount of the tuition money their MBA programs generate (along with a lot of sponsors donating large sums of money to the school and not the university), they can feel free to line their professors' pockets to make sure they have the strongest faculty possible. Philosophy and the like don't have that sort of revenue-generating potential, their students aren't getting better offers from industry, and there's frankly an oversaturated market for humanities/social science Ph.D.s right now, and not enough academic jobs to go around. OVERSUPPLY and dwindling demand is the reason they're making $40k/year as full professors. If they're not happy with the pay, there's plenty of unemployed doctorates willing to take that position for less.

 

Many business schools can't fill their faculty without looking at adjunct clinical and executive professors and these professors (albeit sometimes invaluable to training MBA students) don't contribute much to research and as adjunct, their presence doesn't do much for the perceived prestige of the program.

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Agree w/Behavioral. Humanities' profs also suffer from the fact that universities have a reverse monopoly of sorts. There aren't too many outside options for a professor of medieval history so that prof can't really move to "industry". There are a multitude of opportunities, though, for business profs to pack up and go to industry--for a lot of money; and so B-schools have to pay well. If you think about it, the only reason a B-School finance prof isn't making the same salary as a PE guy on Wall Street, is because the prof loves the research...
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Agree w/Behavioral. Humanities' profs also suffer from the fact that universities have a reverse monopoly of sorts. There aren't too many outside options for a professor of medieval history so that prof can't really move to "industry". There are a multitude of opportunities, though, for business profs to pack up and go to industry--for a lot of money; and so B-schools have to pay well. If you think about it, the only reason a B-School finance prof isn't making the same salary as a PE guy on Wall Street, is because the prof loves the research...

 

Or security/tenure

 

Or the lifestyle

 

Essentially there are non-monetary perquisites to being an academic as opposed to working corporate, which is why business professors don't necessarily have to be paid as much as their opportunity cost would dictate otherwise. The monetary compensation just has to be enough to make the jump an inferior or too costly a choice.

 

I mean, what other job can you get where (if you're placed into a top university) you can make close to $200,000 the first year AND still get 3 months off during the summer? Even if you're not making that much, if you're on the lower side of the starting salary distribution (around $90,000/9 months), that's a good chunk of change that, coupled with your terms of employment, you can actually do something with that money. Many people can make that much money in a year with comparable skill sets, but it'd be hard to see someone doing that without putting in at least 40 hours a week for 48+ weeks a year.

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When I was a nuclear engineer with a BS working in industry, my very first job at 22 years old paid ~$7000 less than what a fresh nuclear engineer PhD from Michigan was getting paid as a new assistant prof at my undergrad institution. That is not a typo -- he only made about seven thousand dollars more than me... and his PhD alone took longer to get than my BS.

 

That new nuclear professor probably makes much less than a new finance professor would. His program probably lasted longer than most Bschool programs as well. These area some reasons why Bschool PhDs are so great!

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That new nuclear professor probably makes much less than a new finance professor would. His program probably lasted longer than most Bschool programs as well. These area some reasons why Bschool PhDs are so great!

 

The outlook is not as rosy as it appears. You need to keep in mind that only 60% of the Business PhD students actually stick it out for 5-6 years and get the degree. I think only Rochester and BU actually fail people in comps. In all other schools, the students voluntarily drop out. The mental and financial toll for 5-6 years can be quite high. The opportunity cost can be quite high. They fully deserve the high salaries they get. Also, tenure is not that easy to get in the Top 20 B-schools. There are many people on Wall Street who put in their 5 years PhD, then 6 years tenure-track, then got denied tenure and came to Wall Street instead of going to teach at a low-ranked school. They actually joke that it is a good thing that professors are paid so little which limits the amount of damage they can do.

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The outlook is not as rosy as it appears. You need to keep in mind that only 60% of the Business PhD students actually stick it out for 5-6 years and get the degree. I think only Rochester and BU actually fail people in comps. In all other schools, the students voluntarily drop out. The mental and financial toll for 5-6 years can be quite high. The opportunity cost can be quite high. They fully deserve the high salaries they get. Also, tenure is not that easy to get in the Top 20 B-schools. There are many people on Wall Street who put in their 5 years PhD, then 6 years tenure-track, then got denied tenure and came to Wall Street instead of going to teach at a low-ranked school. They actually joke that it is a good thing that professors are paid so little which limits the amount of damage they can do.

 

You're preaching to the choir. I was a Math PhD candidate though, and compared to that, I’d say BSchool is rather rosy!

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The outlook is not as rosy as it appears. You need to keep in mind that only 60% of the Business PhD students actually stick it out for 5-6 years and get the degree. I think only Rochester and BU actually fail people in comps. In all other schools, the students voluntarily drop out. The mental and financial toll for 5-6 years can be quite high. The opportunity cost can be quite high. They fully deserve the high salaries they get. Also, tenure is not that easy to get in the Top 20 B-schools. There are many people on Wall Street who put in their 5 years PhD, then 6 years tenure-track, then got denied tenure and came to Wall Street instead of going to teach at a low-ranked school. They actually joke that it is a good thing that professors are paid so little which limits the amount of damage they can do.

 

And 60% attrition is really high compared to many programs.

 

Economics, Physics, Math, and Engineering Ph.D. degrees typically fail 40-60% at Comp, and many will never complete their dissertation after that. These programs also commonly don't provide a full financial package to students before they pass these comps, so they're either paying tuition out of pocket or DO get a remitted tuition, but no stipend.

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I think my post just got lost somewhere! :P

 

I read this whole thread and have some questions. I am 22, enrolled in the CEMS double Master's in Management program (ranked #2 in the world by Financial Times) at Stockholm School of Economics with semesters at ESADE Business School and Rotterdam School of Management: some of the very best schools in Europe. I would definitely prefer something intellectually stimulating (which is why I am considering a PhD) but I don't want to be a broke hippie either. What exactly would my career prospects be like? How much can you start to earn, on average, after a PhD?

 

My plan is to focus on developing countries, investigate issues related to gender, culture, etc. and write about the implication of these issues for management; this would be both intellectually stimulating AND useful expertise for the future.

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A PhD is not worth it! The 700GMAT you use for PhD entrance could have you in a higher ranked MBA and making more in the next 10 years than you will be making ever as a prof... With only the need for a 2year MBA. Even if you want a comfortable retirement-job: teaching 5 classes with an MBA + online pays about the same as a full prof and requires less work and much less time.

 

It only makes sense to do a PhD if you want to conduct research.

 

Ph.D. is not that easy, have to work around the topic everyday, to keep moving. Yes, for research you need a Ph.D.; no use with M.Sc cant move further. getting a degree is different, still we have to support chemistry b'cause chemistry is all around us and chemist is important to us all.

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Assistant Prof in Finance in Top 20 school: $180 K - $220 K for 9 months + $40 K for summer support. Teaching load is 1-2 sections per semester. After tenure, additional compensation for Executive MBA teaching and consulting work.

Lecturer in Finance: $70 K per nine months. Teaching load is 4 sections per semester.

Tenured prof cannot be fired unless the university goes into insolvency. When the university has to cut the budget, they will fire the lecturers and hire adjuncts at very cheap rates. Some universities make the PhD students teach and pay them $15 K per year stipend.

 

Hum... This is both True and False. Yes, Assistant Prof in Finance in Top 20 school may make $180 K, but unlikely to break the 200k barrier (9 months). Typically, it most likely to be around $125 - $150k, and not $180k useless you are a research printing press.

Second, you will not likely get hired in a top 20-50 school where they pay the ~150k salary if you don't publish. But, they will give you a chance; it is called tenure tack: Will you withstand the publication requirement?

 

The average salary is around $100-$130 for an Assistant Professor. Finance PhD(4 to 6 Years long, how fast are you going to finish your dissertation?)

The gain of title/seniority requires the publication of papers and process of tenure to reach Associate Professor (Typically, a six year track. End of the time, you are hired as a adjunct or do not receive a renewed contract).

Congratulations, you are back on the Assistant track or a lucky promotion, but usually never tenure. :)

 

But, PhD is totally worth it! This is the way I view it:

I love research; I like learning new things all the time, and it is a wonderful, and endless journey towards knowledge.

It feels so good to sit there for hours reading about interesting topics like time series modeling or asset pricing in bankruptcy etc, it hurts good like when you run, but for the brain. :)

I will take $100k, and the pursuit of knowledge any day.

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A PhD is not worth it! The 700GMAT you use for PhD entrance could have you in a higher ranked MBA and making more in the next 10 years than you will be making ever as a prof... With only the need for a 2year MBA. Even if you want a comfortable retirement-job: teaching 5 classes with an MBA + online pays about the same as a full prof and requires less work and much less time.

 

It only makes sense to do a PhD if you want to conduct research.

 

No one thinks that MBA and PhD are two different games altogether? I'm at 99th percentile for GMAT, but that doesn't mean I'd get into an MBA program easily. Given my background and experience (which mostly research-related), I don't believe it could get me into Wharton or Harvard.

 

MBA admission values GMAT, work experience (especially management experience), soft skills, and your aspiration to be a manager / consultant / banker / entrepreneur / etc.

 

PhD admission values GMAT / GRE, research experience, math and technical skills, and your aspiration to be a professor / researcher.

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some further information on finance asst professor salaries, gives me an excuse to stop looking at my sas codes. can't find much information on whether most of these figures are 9 or 12 month salaries. there are other schools on the collegiate times list, but i think a sampler will be enough... hope this covers some of the spectrum.

 

observations: the 200k barrier is hard to breach. there is a marked increase in salaries over the years if you look at some of the schools with more data across the time axis. if we assume that the collegiate times data is the salary for 9 months, then well, 180k is possible even at non top 20 schools, but those schools will be in the top 30, maybe 40. but the 180k thing is definitely at the high end of the spectrum.

 

Arizona State

 

Florida

 

Wisconsin - Madison

 

Texas - Austin

 

Rutgers

 

Missouri - Columbia

 

Michigan - Dearborn

 

Michigan - Ann Arbor

 

The UWashington and Washington State lists are from lbloom.net.

 

 

 

 

 

finally, some comments on the non-salary related issues - it is all about the research and the freedom you have in planning most of your time... the monetary benefits are sizeable but not outrageous. so why not, if you like it?

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I think many people in this thread dramatically overestimate their ability to make money in the private sector.

 

Compare the average Columbia MBA MBA Pay Through the Years - Businessweek

to the average finance professor DataDirect Business School Salary Survey .

 

According to this data, the average finance professor's pay is only slightly lower than the average Columbia Business School MBA pay at any given time since starting (even including the three extra years of PhD if you assume repayment of the 250k after tax cost difference in education). The average finance full professor makes 158k, the average CBS graduate makes 193k after 20 years; the starting salary of a finance professor is 127k, the average CBS graduate makes 135 after 5 years; etc. Keep in mind that a majority of CBS students had previous work experience which will bias their salaries upwards.

 

I really doubt that the average CBS grad is working less or is less smart than the average finance prof (who, by definition is at a 100+ ranked business school). These professor's have SLIGHTLY lower salaries than the salary + bonuses of the CBS grads, but significantly better benefits and better job security.

 

 

The real costs to a career as an academic are the lack of choice in location, academic environment, solitary nature of work, and less extreme upside potential.

 

The real benefits are interesting work, good job security, and flexibility.

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I thought I would add to the salary trivia...

 

By law, Canadian universities in Ontario (along with other public institutions in the province) are required to disclose a list of its employees earning more than 100k. The disclosure is colloquially termed as the "Sunshine List". Almost every Business professor makes into onto this list:

Public Sector Salary Disclosure 2011 (Disclosure for 2010) : Universities

 

I took a glance through the Toronto/Rotman portion of the list. It looks like newly-hired Assisstant professors make around 230K and a few of the full professors are making well into the 300s. Of course these are all calendar year figures so if we were to pro-rate it for 9 months for comparative value you are looking at a 170K to 230K range which seems to be on the high-end of the scale.

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When talking about the MBA vs PHD, did anybody mention sitting in a cubicle (little open jail) all day whether you have something to do or not, getting bored out of your mind all day, killing those brain circuits one at a time, and being brain dead at end of the day not because you used it so much but because you did not used it all?
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