Re: 转一个Economist关于各国PHD数量和就业的文章（有点悲观呀）

shaorubing

In finance, there is so-call fundamental value and everything in the world should come back to its fundamentals eventually. Value investing principles therefore should guide our long-term goals. Following is the historical evidence and examples re education investment (here what you invest is not just money, but time--or the best time in your 20s, and other opportunity cost):

When Harvard produced its first year MBA students in 1960s, that was a time when big corporations like Ford and other large family-run business whose one-man management style can not catch up with growing demanding management needs as those firms went globally. More than half of Harvard first year MBA graduates became professional managers in large corporations afterwards (family members will choose to take board-member positions instead). That was also the time, in my mind, you can rip the largest profits as being an MBA student because that's what it fundamentally asked you to do--becomes an CEO.

Many many years later, when newly minted MBA students can only or prefer to go to consultancy or Investment banking industry as associates, the fundamental purposes of MBA deviates from its origin, and business school has to create executive MBA or EMBA to back to its origins. So now, MBA has split into several versions: normal MBA schools is a transition or step-up education for mid-career professionals while EMBA trains mid or upper mid level managers in their area. This more specialized trend occur not just in business school, but also in other areas as well (which I don't care).

In 1980s and 1990s, Wall Street found out that people major in math, physics and other hard science can solve problems in the real world in finance (when also derivatives, asset backed securities and other complicated stuff demands for valuation and hedging increased) and even without previous experience in economics and finance, these quants are capable of learning it quickly and mastering the models much better and faster than MBAs. That was a time when MIT, Stanford PhDs in hard science went directly to Wall Street after their graduation became normal. However, PhD is not cost-efficient; quant only needs less than 10% of skill of that of a PhD student, and educate quants can be shorten into one or two years instead of five or six years doing non-related and too-specific research.

That's why in 1990s, among others, CMU, Chicago and several other schools decided to open programs like Master in Financial Engineering and Financial Mathematics to tackle above problems. No doubt, these graduates enjoy their finest moments from 1990 to post-2007 crisis because that's what it fundamentally asked you to do--work in capital markets (not investment banking) as a quant and build models for various purposes.

Phd, by its essence, has a totally different objective and its objective never changes over the history. Doing innovative research, enjoying intellectual pride and idea and educating the next-generation business man and woman through which making real impact in the business world are some of its core objectives.

There are exceptions for sure, but for most of time, people who decide to go to school should understand what's the fundamentals of education investment. That article says "A PhD may offer no financial benefit over a master’s degree. It can even reduce earnings"--of course, that could be legitimate because of their different objectives; "The interests of universities and tenured academics are misaligned with those of PhD students"--that is the sad part of this world for their misaligned incentives that deviate from its fundamentals.

After all, education--i.e. every degree--has own and unique purpose and it only serves the best to those who clearly understand it, see the trend of it and match it precisely. We have been asked numerous times of why PhD, why MFE, why etc. and etc.--and that's what you should say in response (with proper quotation).

----shaorubing@CD

benxu

Excellent! I could not have said it any better.