Higher education in the marketplace

In My Humble Opinion
1

Several of my compadres and I eagerly digested the recent publication of the AAPG’s annual salary survey. The figures are for geologists, but we all tend to presume that they apply pretty well to geophysicists also.

So here’s an excerpt:


**Average Salary by Degree

Years
Experience      B.S.          M.S.          Ph.D.**

0-2           $62,000       $67,100       $80,000

3-5             n/a          78,300        70,400

6-9            57,000        82,200        79,000

10-14         132,000       102,200       115,000

15-19           n/a         119,500       112,500

20-24         116,300       111,800         n/a

25+           141,500       120,800       140,000

This makes one think about the value of grad school, for one who’s bound for industry rather than academia. When I was in school (1970s) very few people besides those bound for either the traditional (law and med school) post grad tracks or those intent on academic careers really thought much about getting a post grad degree. MBAs were just beginning to become popular.

I can cook up some models to possibly explain why experienced B.S. degrees seem to be doing better than their more formally educated brethren in this field, most hinging on the nadir of the profession that seems to have come and gone during my 24½ years in it.

During the past 18 months, my district office has hired three fresh-out-of-school geoscientists whom we hope to train and retain. Two, one geologist and one geophysicist, ages 33 and 30, completed their Masters while in our employ. The third just started this week, and he’s a 23 year old with a B.S. I can’t help but wonder if he’s not going to wind up doing better in the long run than the first two.

Besides putting off the beginning of your earning career (or, perhaps that should be factored in), what does it cost to add a Masters degree to your resume? Does it make any difference once you’re ten years or so into your career?

There’s probably a lot more that could be said about how these salary profiles have come to be, and perhaps I’ll get back to it. This does make me think about the inherent fallacy of trying to generalize about an individual from a statistic.

I’d guess that there are plenty of other vocations that have seen similarly seemingly anomalous disparities between the level of higher education attained and actual compensation.

What’s your experience?

2

I don’t have the data you have, but in my own experience, software engineers have been valued more by what they can do than what degrees they have. One of the top engineers in my group when I worked at a very large software company only had an associate’s degree. I myself have no degree, but at one point had two people with master’s degrees in computer science working under me. It’s all in what you produce.

3

I think it’s easy to explain the numbers you see in that table. Let’s assume the following: Academic jobs don’t pay as well as industry, and before 1980, it was not considered standard for a geologist to get a Ph.D. if they wanted a job in industry. Given those two assumptions, the following conclusions hold: Ph.D.'s back then were considered to be training for academic jobs. Some people who got Ph.D.'s then decided not to get academic jobs but to work in industry, but that wasn’t typical. There wasn’t much difference in ability between those people who got B.S.'s and those who got Ph.D.'s. It was mostly a matter of what they wanted to do with their life. So, consider these people now 25 or more years later. Among the Ph.D.'s there are those who spent their lives in academia. They aren’t making as much money as the people who worked in industry with either B.S.'s or Ph.D.'s. Among the people who work in industry, having a Ph.D. only mattered for one’s salary in the first few years of one’s job. After a decade or so, a geologist will make the same amount of money on average regardless whether he has a B.S. or a Ph.D. So the Ph.D’s in industry are now making just as much money in industry as the B.S.'s in industry if they been at the job more than 25 years. And someone with just a B.S. will have a longer career because they don’t have to spend four to six years working on a Ph.D.

Assume that now, on the other hand, it is considered standard to get a Ph.D. even if one wants to work in industry in geology. This means that most of the best people will be getting a Ph.D. before applying for work in industry. So now the differences in the people applying to industry between those with just B.S.'s and those with Ph.D.'s will be more obvious. Those with Ph.D.'s will be offered the best starting jobs in industry (and hence the best salaries). Even if it’s true that the people with B.S.'s are just as good, it will take them five or ten years to convince their employers of this fact, and during that time their salaries won’t be as good.

Something like this has happened among mathematicians on my job. 40 or 45 years ago, most of the people hired as mathematicians were B.S.'s, although there were some M.S.'s and some Ph.D.'s. 20 to 25 years ago, most of the people hired were M.S.'s. Now many and perhaps most of the people hired are Ph.D.'s. As the number of people getting graduate degrees in a subject goes up, there’s a tendency for an employer to look for just the people who have graduate degrees. It’s what they use to distinguish between those they hire and those they don’t. It may be a lazy way to make the distinction, but that’s what they do.

4

I’m inclined to agree with the gist of your analysis, Wendell. I suppose the pattern has repeated in many professions.

As I noted, when I was in school, few people considered pursuing Masters degrees, although the MBA was becoming an option for some. Then, in the 1980s, the oil and gas business experienced a catastrophic meltdown, and many chose to pursue Masters for two reasons: 1.) to prolong their time in school for a few years, in the hope that the job market would improve and 2.) to perhaps give themselves an edge over the Bachelors degrees with whom they might be competing.

And you’re probably correct in that the Ph.D. salaries reported are likely mostly from academia. At this point I think we’re still a long way from Ph.D.s becoming the norm for geoscientist career aspirants in oil and gas, but the Masters degree is becoming the norm.

Yet we just hired a freshly minted B.S. to a professional position equivalent to that of his colleague with an M.S. (not relevant, but as an aside I’ll mention that our recent geophysics hire holds two Masters, both in geophysics).

I’ve long held that once you’re a few years down the road in your career, the academic level reached has greatly diminished relevance. This seems to agree with Athena’s experience. When I took my present position I don’t recall, during the entire hiring process, anybody asking me if I’d even attended college.

What I still wonder about is whether a Masters degree really pays off.

5

How big was the sample size? It looks like from the figures, they only polled relatively few people which could mean the results are fairly noisy.

Also what needs to be considered is that not everyone will continue being a geophysicist for their entire lives, it’s likely many people moved into a different field before they reached 25 years so those that are left represent the top few of their profession. As a completely WAG, if you had a bachelors rather than a PhD, you would be more willing to consider a radical career change. Therefore, more mediocre PhD students have stuck around which brings down the salary.

6

That was my first thought as well, and I’ve seen the same phenomenon observed with economics degrees.