As Smart as a PhD

There is sometimes confusion about what a PhD is.

The main signal that you should derive from the fact that someone has a PhD is that they are well suited to the university campus environment.

Maybe people who complete a PhD are especially thorough and finish their work to perfection? In computer science, academic projects have a reputation for being of relative quality. Stonebraker, a famous computer science, attributes part of his success to his dedication to finishing up the work:

The smartest things we ever did, was to then put in the effort to make it really work. (Stonebraker, 2014)

Did you know that a lot of people have a PhD?

Over 3% of the population in a country like Switzerland has a PhD. Hence, in a city of 1 million people, you may have 30,000 people with a PhD. In Germany, that would be 15,000 people.

Do PhDs lead to great jobs and higher incomes? Not really. If you do get your PhD and secure a good job and keep it for a long time (so no early retirement), then you can do a bit better than the average person who stopped with a professional degree. But even that is misleading because we don’t know how the person smart enough to outcompete 100 other PhDs for a prestigious job would have done had they not gone for the PhD.

You know, Joe, who has a PhD and has become a full professor at Prestigious University… well… it is likely that Joe has been working week-ends and nights for years. Joe is excessively well connected. Joe was always smarter than anyone else in his classes. Joe can sit down and write a great 20-page scientific essay without ChatGPT and without much effort. Joe can navigate politics better than most.

Sometimes young people think… well, it is terrible to be job hunting at 22 without experience. Right, but try job hunting at 30 with a PhD and no actual job experience. It is worse! Much worse!

Given these facts, do you really want to be ‘as smart as a PhD’?

« In the short run, pursuing a PhD entails substantial opportunity costs. Early-career earnings for PhD graduates are significantly lower than those of individuals with master’s or professional degrees. (…) Over the lifecycle, earnings do eventually recover but only under specific conditions. The most favourable long-run outcomes are concentrated among those who secure academic employment and remain in full-time work late into life. (…) However, the structure of this system increasingly resembles a tournament: the payoff remains high for those who reach the top, but the odds of doing so have declined. Our analysis documents that the economic outcomes of recent PhD graduates have worsened over time. The bottom of the earnings distribution has grown more populated, and early-career returns have declined even as aggregate statistics appear stable due to rising returns among older cohorts. » (Benjamin et al., 2025)