Ph.D. Recipients Boost Economy

Doctoral degree recipients supported by research grants made an important impact on the economy, earning higher wages and working at R&D companies in higher proportions than other workers, according to an analysis of graduates from eight Midwestern universities (Science 2015, DOI: 10.1126/science.aac5949).

The study by several labor economists attempts to identify the value of doctoral training across many fields—including chemistry—by examining earnings in the years immediately after graduates receive their Ph.D.

Perhaps the most important finding might be about geography: An unexpectedly high 22% of doctoral degree recipients in the study remained in the Midwestern state where they got their degree.

Demonstrating that highly educated and highly paid workers stay in a state reinforces for legislators why they should support local universities and shows the beneficial economic impact of retaining graduates, says James Batteas, a chemistry professor at Texas A&M University. “The data show the clear value of the investments in higher education made through state universities and by other institutions of higher learning as a whole.”

The Science paper is part of a larger effort by labor economists to measure the value of research investments. The authors examined records for 3,197 people supported on research grants who received their Ph.D. between 2009 and 2011. Eight universities—Indiana, Bloomington; Iowa; Michigan, Ann Arbor; Minnesota, Twin Cities; Ohio State; Purdue; Penn State; and Wisconsin, Madison—participated through the nonprofit Committee on Institutional Cooperation’s UMETRICS project.

The economists matched the Ph.D. recipients with anonymized U.S. Census data, which allowed them to track their earnings from 2010 to 2012, explains Ohio State economist Bruce Weinberg, the paper’s corresponding author.

They found that almost 40% of graduates go to industry, where they are likely to be hired by R&D-performing companies. Another 57% go into academia, while just 4% end up in government.

The economists were also able to examine data on specific disciplines, including chemistry. “Chemistry does pretty well in a lot of different dimensions—there are people going to high-wage firms; they are likely going to R&D-performing firms,” says Weinberg, who studies the science workforce.

However, chemistry doctoral degree recipients made less money than those from many other science, technology, engineering, and mathematics (STEM) disciplines. The mean earnings for all chemists in the study was just $43,000 per year; those working in industry earned a mean of $58,000. “Why is it that chemistry looks so strong in so many areas but lags behind in salary?” Weinberg says.

The Science paper’s authors don’t have the data to answer that question—for example, they don’t know a person’s job title, just their employer. But one possible explanation is that more chemists serve as postdocs, who tend to get low salaries, says Steven Corcelli, chair of the American Chemical Society’s Graduate Education Advisory Board and a University of Notre Dame professor. That isn’t as true of engineers or computer scientists.

Batteas was surprised to see that the average salary for doctoral degree chemists was so low; graduates who leave his physical chemistry lab for industry tend to make significantly higher wages. “Even though their average salary was lower, an equal proportion of chemists were entering high-wage businesses,” Batteas explains.

Many companies tend to hire engineers, mathematicians, and computer scientists because they are seen as experts in quantitative analysis. It’s not clear to Corcelli why chemists aren’t always included in that group. “That creates an opportunity” for the community to promote chemists’ quantitative skills, he says.

In any case, the paper clearly shows doctoral degrees are a good investment, Corcelli says. “This argument ties research to economic development, and that’s a language that Congress speaks.”