UK: The economic contribution of PhDs

Examination of the education process suggests ways in which the production of highly qualified people might raise the abilities of all people. The social dimension of learning might well be important. Moreover, university teachers (who are often PhD holders) might contribute to this process. The production of PhDs can be argued to contribute to a pool of knowledge from which all can draw. PhD holders might also be better at drawing from this pool of knowledge and transferring it into the production of goods and services. Last, clusters of highly qualified people, and of high-technology firms, might generate their own spill-overs and members of the cluster might benefit. Evidence is reviewed.
Journal of Higher Education Policy and Management

This paper comprises an attempt to understand what the value of a doctorate is, both to employers and to society and the economy at large. It seeks to provide some indications of how the two separate, but interrelated questions 'What is a doctorate worth?' and 'Is there a justification for society to subsidise the production of doctorates?' might be answered. The analysis is from an economic perspective. Many of the wider, but largely unquantifiable, benefits (and possibly costs, too) associated with people obtaining and possessing a doctorate are not covered. However, it will quickly be seen that many of the possible or suggested economic benefits are, themselves, difficult to quantify.

The paper is divided into five parts. The first looks at the possible benefits of having a doctorate for the holder of the qualification. It is concerned with whether PhD holders earn more than other degree holders. The second part looks at whether increasing the share of the workforce with a PhD could contribute to an economy's performance. It considers whether the gains from having a highly-qualified workforce include gains going beyond those reaped solely by the holders of degrees, and whether the production and use of high levels of knowledge spill over to other firms and to wider society.

Part three looks at how the production of PhDs might lead to the generation of knowledge and understanding from which wider society benefits. Arguments for whether there is a justification for public support (including from tax revenue) for PhD production (through the higher education system) are addressed. In the fourth part the way in which the skills of PhD holders, and in which the PhD production process itself, might spill over to firms are examined. Here, the experiences of employers of PhDs are referred to and some thoughts about the role of higher education institutions as hubs from which knowledge is disseminated are given. The last section summarises and draws some conclusions.

* Professor Bernard H Casey is with the Institute for Employment Research at University of Warwick, UK.

* To read the full article "The Economic Contribution of PhDs" published in the latest edition of the Journal of Higher Education Policy and Management, Volume 31, Number 3, August 2009, click here.

* JHEPM is a Routledge journal and the article is provided under an agreement with the Taylor and Francis Group.