We are often asked at PREDOC about the monetary practicalities of an academic career: how affordable the training is, and how financially secure a career at the end is likely to be. The financial obligations many undertake to go to college can make an additional five years of PhD training sound daunting. Fortunately, the academic pipeline in the quantitative social sciences comes with a lot more built-in monetary support than college, and the many different opportunities a PhD leads to typically pay well.
Pre-docs are paid positions. Salaries and stipends vary by institution, but as a rule, they at least slightly (and sometimes more than slightly) exceed PhD stipends. To give a frame of reference, here’s Harvard Business School’s PhD stipend. On top of that, pre-docs are jobs or fellowships that come with full benefits, like health insurance. Most pre-doc programs also provide special benefits like tuition reduction, or even full remission, if someone chooses to take coursework while completing their pre-doc. Graduate school PhD funding is fundamentally different from the funding (or lack thereof) for an undergraduate degree. Top programs do not charge their students tuition for some period of guaranteed funding, often the expected time to degree. On top of that, these programs also provide a stipend. Work and/or teaching requirements are sometimes folded into this stipend, but the work typically advances someone’s academic training—you’re likely to work as a teaching assistant or a research assistant, rather than stock shelves at the campus bookstore. Institutional dissertator fellowships and outside agencies like the National Science Foundation also provide support, and many schools provide resources to support dissertation research if you need to purchase data or run experiments.
After earning a PhD, many go on to faculty positions. To give a concrete idea of what faculty salaries look like, the following chart reports the distribution of faculty salaries in business schools as reported by AACSB:
Not all PhD students end up pursuing an academic career at universities. Many PhD students may eventually prefer to go to work for a government organization, such as the Federal Reserve, the International Monetary Fund (IMF), the World Bank, or the Security Exchange Commission (SEC), to name a few. Others may prefer to go to the private sector, like consulting, investment banking, technology firms, and so on. Some others decide to go to work for non-profit organizations and put their skills to use to help others. The next chart shows median salaries across different types of occupations reported by the NSF Survey of Doctorate Recipients of 2017 across various disciplines (Computer Sciences, Mathematics and Statistics, Social Sciences and, as part of the Social Sciences, Economics):