A few weeks ago, my colleague Melonie Fullick teed off in her University Affairs column on some of the rhetoric around calls to increase the number of PhDs. Universities always like these kind of calls (and – guilty – I’ve made them myself), because they mean some combination of more money and more horsepower to do advanced research (in the Sciences at least). But universities are obviously producing a lot more PhDs than they are ever going to hire, and so, as Fullick points out, the question becomes what’s the absorptive capacity of the economy to take all these PhDs?”
I mostly agree with the points in this article – and certainly agree that we spend way too little time thinking about graduate destinations (and adjusting the content of PhDs programs accordingly). But let me suggest that there is another reason for us to increase the number of PhDs which was not dealt with either by Fullick or the folks she was taking to ask; namely, to push down the post-graduation wages of doctoral degree holders.
You’re recoiling in horror. OK, let me explain.
There are both public and private benefits to education, which is why we split the costs between government and students. But when we talk about “public benefits”, what do we mean, exactly? What does the state get out of subsidizing education? The short answer is that by subsidizing education, it increases the number of people able to attend, which in turn increases the productive capacity of the economy, which benefits everyone.
But think closely on that. How does increasing the number of students increase the productive capacity of the country? Well, let’s think about it in terms of a new technology – say teleportation – and you’ve got two countries of more or less equal size. Country A manages to produce 10 PhDs in teleportation technologies, while country B manages to produce 30. What happens then?
Well, in country B, maybe 4 or 5 get hired back in academia – which is great because they can train more teleportationists. And you’ve got 25 or so who can go into industry. Now how are firms in country A going to compete with that? They’ve only got 10 or so – and they have to fight with academia to hire some of them. It’s not just that Country A has fewer top brains to work on this task – it’s that they have more market power. And that raises the cost of R & D and likely production as well. Firms in country B won’t necessarily “win” the teleportation technology battle, but their innovation efforts will have a lower cost structure.
Now, that doesn’t mean country B will always have lower pay for teleportationists. Pay depends in part on product success and once firms in country B achieve success and become profitable, it is in their interest to raise wage levels in order to attract top talent. But at the start, the “overproduction” of graduates gives firms in country B a big head start. And if you think that’s crazy, go read up on the history of the German chemical industry: “overproduction” of PhDs in the 19th century gave firms in that country a lasting advantage that endures to this day.
Now this doesn’t work everywhere. In mature industries, particularly capital intensive ones, the spillover benefits to overproducing graduates is less because either there is less new-product innovation or because it is so capital intensive that the cost of researchers’ labour is trivial in terms of providing a cost advantage. I suppose one could argue that some benefit could be wrought by pumping out more PhDs skilled in process innovation, but to be honest I’m not sure anyone’s ever shown that process innovation rally relies on PhDs, so we can maybe rule that one out.
So maybe we need to revise Fullick’s conclusions a bit. It’s certainly true that across-the-board increases in PhD students might not be such a good idea, and that in mature industries, we do need to care about receptor capacities. But in newer industries, there’s a really good case for putting the pedal to the metal and letting the chips fall where they may. We could use a German chemical industry-like success around here.
Tweet this post
After reading Fullick’s and Usher’s pieces on the production of PhDs, I’m left with the feeling that both pieces missed an important critical component of a PhD. PhD’s have the potential to transform mature as well as emerging industries. Typically to get a PhD, one must have serious intellectual horsepower but even more important, the ability to overcome a hopeless situation. Imagine how hopeless it is to consider adding substantial new knowledge to any of the fields these days. What a PhD gets trained in, is optimism. How to break down insurmountable problems into smaller, achievable problems with the end result, being a substantial contribution to knowledge. This occurs across all fields.
The more PhD’s out there, there are. The more people working in industry, government, policy, and our social fabric who know… there are no truly hopeless situations. With will, determination and persistence, even the most complex social, technological and environmental problems can be solved or at least, made less severe.
I think the issue is that PhD entrants need to know that they will not work in academia. Most responsible professors are explicit about this with their entrants. Most PhD entrants use the internet and quickly find out that getting a position in academia is a faint hope. It seems to me, that if there are PhD students out there that think that academia is the only reason to get a PhD, then they are remarkably ill informed or incredibly arrogant. In my experience, the reason to train more PhDs is to foster that essential optimism that results in social betterment. After all, all changes begin with one person.