Top 5 reasons why Graduate Studies are (actually) encouraged

In my last post, I was discussing why a bachelor-degree drop-out may have a better chance at earning more money than a graduate with doctorate. Now, I share my top 5 reasons on why, irrespective of the grim picture for the graduates, is graduate studies encouraged:

1. To compete with other countries

Countries are constantly competing with one another. China, a once developing third world country is now aspiring to excel US in economic and military might. It would have never been possible without the strides in science and technology. Even in India, which was once dependent on farm produce is increasingly dependent on IT services for its GDP. The significance of science and technology and consequently graduate education could not have been well said than Mr. Bill Gates himself. So, in short, higher studies fuel economy and country's might, without which the status and prominence of the country itself would be lost. This one of the reasons, why every country is trying to promote education, particularly higher education. And a very noble one. However, what is there for an individual? While some may argue that while the country grows individual grows it cannot be the case for everyone. As when the country grows, increase in inflation would offset the increase in income. Second, corruption and nepotism grows, making it difficult for people without money or influence.

2. To generate cheap labor for research

Don't get me wrong, but research is costly. Getting qualified individuals for the job is much more. The funding usually provided for research in the universities are highly insufficient to hire contract or consulting scientists. So, most of the Universities and laboratories tries to get things done by exploiting young graduates who have energy and are ready to work without any benefits, in the hope of landing a good position someday. From my experience, I cannot blame the scientists. They are very helpful. Sometime, might go out of their way to get you a position. However, they can only do so much when  the funding cuts limits the number of academic and research recruitment (think about superdocs and junior scientists). But what is disturbing is that none would ever say that by pursuing PhD you are going to put your economic future at risk! I definitely don't know if those scientists hope things would get better, or colluding with their political bosses, or forced not to sensitize the next graduate or outright selfish... In any case, the final sufferer is the graduate. 

3. To exploit workforce

Mr. Bill Gates, Warren Buffet were trying to promote STEM education. However, it seems his own company is not inclined to even give a chance to STEM graduates (postdocs) other than from Ivy league universities. Personally, when I doing my undergraduate degree in engineering Microsoft wouldn't even set their foot on our university irrespective of the fact that Tata, Cognizant and a whole lot holds our university in good esteem. Trying to prove myself, was one of my motivations to pursue higher studies. Anyway, that is a different story. However, their constant promotion is only likely increase the workforce supply, which would naturally lead to the exploitation of workforce. For example, many IT companies in India force their employees to work over 16 hrs without weekends and holidays. I was once penalized, as not being time inflexible, for completing my work before 18h00. The employees have no say because, they are easily replaceable with someone with a need. In the case of recession, some companies laid off their employees but they had no reason to, most of their projects are long-term and most of them saw hike in their profits, generated by these lay-offs. They could do so due to the huge supply of workforce...

In my perspective, Mr. Gates, is either trying to generate cheap labor for his industry or is completely misinformed of the reality.

4. To attain social status

This is a very common reason for parents motivating their children to become graduates and is more common when they are from socially/economically backward community. I believe, this is their subconscious drive to prove that they are equal. While education does bring some social status, the ultimate status is determined only by one's paycheck... Even if the person is a noble laureate, he gets his insurance coverage only based on his premium and net worth, not on his contribution...!

5. To attain economic status

Many believe that higher education would lead to better income. There is some truth in that but also a lot of lies. As have indicated in my previous post, an undergraduate is likely to derive more benefits. This could be justified by the plethora of job opportunities available to them and low debt accumulated during those undergraduate studies. Further, since they start early, they are likely to accumulate more over the years. However, the situation would change immediately once you venture beyond your undergraduate degree. With Masters, the opportunity reduces, reduces further with PhD and proceeds towards zeros as the number of years in one's postdoc increases. Take my case for example, I left a nice job to do graduate studies in robotics. Yes, it is a very good subject with lot of civilian and military applications. The consequence, I'm now desperately hunting for a job after a PhD in remote sensing and 2 years of experience as a postdoc as my funding would run out in another 6 months. 

Conclusion

Now comes the interesting question, irrespective of the risks involved, how and why is that many of the articles continue to sing paeans encouraging graduate education? First, these studies project amazing life-time earnings based on past earners, who now have comfortable in jobs and have a decade or more years to retire. Those studies didn't take into account the present job market and its evolution over time to predict its future state. They conveniently left out the truth about the risks involved and were also "unethical" in failing to highlight the limits of their analyzes. Regarding why they do this, it may probably be to reduce competition. For example, if every one knows the truth about graduate education, they would try to emulate people in power i.e., businessmen and politicians, which would increasingly make the market competitive. Since, it is impossible to derive economic benefits from a perfectly competitive market, the best alternative for those in power is to make the people believe in a system of long-duration education. This would reduce the competition immediately and would also shift the unemployment crisis to a later date. 

Limitations:

This analysis is based on an average perspective. Ivy leaguers and "close-enough"s get preferential treatments, so they may not agree with this. And obviously certain subjects would be better preferred than other. These aspects are not discussed in this study.

Do you have any personal experience that buttress or counter the arguments in this post?
I would more than happy to hear from people with different views...!

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.

1-http://www.bls.gov/emp/ep_chart_001.htm
2-http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2014-15, http://www.bestmastersdegrees.com/how-much-does-a-masters-degree-cost, http://study.com/articles/How_Much_Does_a_Doctorate_Degree_Cost.html
3-https://www.bankofamerica.com/deposits/bank-cds/standard-term-certificate-of-deposit.go

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. 

Limitations:

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...!