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Public and Private Investments in Ph.D. Research Programs Pay Economic Development Dividends

ATLANTA–Research-funded Ph.D. recipients earn high wages after graduation, participate in national and international labor markets, and make an important impact on local economic development, according to a new study.

Almost 40 percent of these Ph.D. graduates enter industry, where they are disproportionately hired at large and high-wage establishments in technology and professional service industries. They also earn higher-than-average salaries, all of which contribute to economic growth.

The research, published today in Science, is the first to show how federally and non-federally funded research investments may affect the economy by tracing the human dimension of their impact. The study matches administrative records to U.S. Census Bureau data to examine the subsequent employment and earnings outcomes of nearly 3,200 Ph.D. graduates from eight major research universities.

Led by professors Julia Lane (New York University), Bruce Weinberg (Ohio State University), Paula Stephan (Georgia State University) and Jason Owen Smith (University of Michigan), researchers examined an array of outcomes.

The study showed more than 20 percent of these doctoral recipients remain in the state where they trained, about 13 percent within 50 miles of their university.

Only a small percentage of the Ph.D. recipients entered government (4.1 percent) and the majority remained in academia (57.1 percent), many presumably taking a postdoctoral research position. Seventeen percent of the Ph.D. recipients worked in establishments owned by firms with research and development operations versus 10.8 percent of the U.S. workforce. Doctoral recipients employed in pharmaceutical and medicine manufacturing, semiconductors and computer systems design are between four and 19 times the U.S. average.

The authors also found the median U.S. establishment employing these Ph.D. recipients has a higher payroll per worker – more than $90,000 – than the median U.S. establishment owned by a research and development firm (just under $61,000) and the median U.S. establishment (just over $33,000). Fifty-one percent of these doctoral recipients work in establishments where per-worker payrolls exceed $100,000.

Although Stephan cautioned the study is descriptive in nature and not causal, she added, “It’s an important first step in providing policymakers the tools they need to assess the broader effects of investments in science.”

NOTE: reporters registered with Science can access the official version of the paper directly from the SciPak webpage at http://www.eurekalert.org/jrnls/sci/.

Co-author and economist Paula Stephan is a professor in the Andrew Young School of Policy Studies at Georgia State University. Lead author Julia Lane is a professor at the Robert F. Wagner Graduate School of Public Service and the Center for Urban Science and Progress of New York University. They and co-authors Bruce Weinberg and Jason Owen Smith worked with researchers Nikolas Zolas, Nathan Goldschlag and Ron Jarmin of the U.S. Census, Rebecca Rosen of New York University and Barbara McFadden Allen, Committee for Institutional Cooperation.