Monday, June 1, 2015

Should I study more?!

 a bachelor degree drop-out is likely to make more money
I was a brat, who wanted to become a scientist . Period! I want to become a scientist! However, my parents had a different plan for me - finish engineering, join IT!

After 3 years of toil in IT, I finally accumulated enough money to take TOEFL and GRE and finally landed on a prestigious European scholarship to pursue Masters in Computer Vision and Robotics. But all the time, my father was insisting, "the money you might earn through higher studies could be obtained through experience"... Blinded by my love for science, ambition and to prove my self, I resigned my job and joined my Masters. Four years after my Masters, I finally got my PhD.... Yahoo!!! It was from a prestigious lab, under a great remote sensing scientist... I was all but proud. All my lonely and boring days doesn't matter anymore. Like most other doctorates, in my quest to become a scientist, I became a Postdoc. The current project is amazing and my supervisor, is really great! I'm learning a lot... In the mean time, I became a father... Then the reality struck me hard in the face... POSTDOC CRISIS! My funding is running out, my PhD is not for 3 years as initially envisaged but only 2... My visa is running out! And I don't have a job... yet!

What the hell did I do? Am I blame myself for not seeing this coming? Then I read articles in the internet, where Mr. Bill Gates was promoting STEM education. Not only Gates but many other blogs were also showing that graduate education is worth the investment. Ok, then why is the crisis... Then why is it difficult for Postdocs (Curiously NSERC fellows were treated as immigrant workers and not postdocs while immigrants in Universities were considered as postdocs, in Canada...?!)? So, I have been wondering... Finally I thought,  OK, since the cost of education is usually considered an investment, may be there is an ideal numbers of years of study that could return well on the investment, at the least the investment itself. So, I set to discover this optimal point i.e the number of years that breaks-even on the investment.

The figure, above shows how the income, the total cost of education, and the opportunity cost of education of a student increases with the number of years of study. From the figure, it could be seen that at little over 2 years of study after High school (year 0), the opportunity cost breaks-even with the income. And, around 3 years of study after Higher school, the actual cost breaks-even with the income to be earned. So, in other words, in the current labor market a bachelor degree drop-out is likely to make more money than a guy who was working his ass-off towards his PhD. Worse, the PhDs have limited opportunities than an undergraduate.

A case in point, is a lesson I learnt too late. I had a classmate during my high school days, whose grade used to be so bad, that he had to leave the school after his 10th Grade to some other schools to continue his education. Of course, our school used to eliminate students with poor standing every year. However, when I was doing my bachelors degree in Engineering, I saw him doing some bachelors degree in the University, which was not one of the STEM subjects, everyone longs for. In 2013, when I came across him after a PhD with no property or riches, he was already a multi-millionaire having grown his family business to great extent. Bill Gates, Mark Zuckerberg, etc., where all university dropout and yet they are all billionaires. Others...?!

For wondering about the earlier studies that champion longer study periods, it should be noted that those studies don't usually include long-term risk factors. Further, those studies on life-term earnings are based on past observations which may not hold good for present or future. For example, 20 years back a PhD could easily get a job and his earning would accrue with benefits. Could we say that now?

In short, I'm not advocating against education but it might probably be best if someone don't pursue higher studies, particularly if they are not from some Ivy League Universities...! It might even be better, if one pursues his studies for growing his/her venture, as my friend did on his family business.

Personal point: The studies, paint a grim picture. I some time feel remorseful for leaving a good job, the company I enjoyed and for not listening to my father. However, had I not pursued my graduate studies, probably I would have never acquired these skills of analyzes and reasoning. So, they are worth it...and more! 

How did I do it?

For those curious to know, how arrived at the results:
  • For this study, completion of High School is fixed as reference i.e., year 0. After which, the student may either pursue a 2-year Associate degree or a 4-year bachelors degree. 2 more years are required for a masters degree and an average of 5 more years is assumed for obtaining PhD. 
  • The actual cost, is the actual amount that is spent to attain a specific degree. For example, for obtaining a Masters degree, is the sum of the cost of obtaining a bachelors degree and the cost during Masters. 
  • The opportunity cost, is the cost of a missed opportunity to invest. I took the example of investing in a certificate of deposit account in US, with an annual percentage yield of about 0.1%. One of the reasons to choose this investment is the low risk of investment. 
  • Similarly, information on median income was obtained from the Bureau of Labor statistics
  • These cumulated values were plotted to identify the break-even point. 


In many ways, the study is an approximation:
  • This study didn't use the long-term rate of return calculations because such calculation would have to include the risk due socio-politico-economic factors. I would love to include that analyses but if I'm to try and include those factors of benefit and risk then this post would be about 30 pages long, which would enervate even the most energetic person. 
  • This study also didn't include, social-factors - like the status accorded to a person due to his education, which could be kept for another study. 
  • Many of these values are approximate and obtained from internet sources. Obviously, the results would be different with other data, nevertheless, the approach could be defended.
  • Also, it should be understood that learning some subjects is worth than other. For example, becoming a graduate in Computer Science or Law may be worth more than a graduation in Earth Sciences or Education.
  • These data were obtained from internet sources (mostly google searches)

However, did you ever wonder why, irrespective of the grim picture about higher studies, why people are encouraging it? Wait for my next post...!
And share your thoughts...!

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