Question: Are Graduate Students Rational?

NMC News:

Do graduate students make rational decisions? A recent study published by New Mexico Consortium (NMC) researcher Meg Blume-Kohout concludes that no, graduate students are not entirely rational – at least with respect to their postdoctoral employment prospects.

When deciding whether or not to enroll, prospective biomedical graduate students respond to current market changes and student funding opportunities, but seem to ignore long-term salary prospects. 

Data for 1996–2010 showed that graduate enrollment in biomedical sciences for a given year rose by 2.9–3.9 percent when relative wages for biomedical-science jobs rose by 1 percent that same year. On the other hand, enrollment in a given year did not correspond to employment rates or prevailing wages six years later, around graduation time.

The December 2013 publication in PLoS ONE, “Are Graduate Students Rational? Evidence from the Market for Biomedical Scientists” by J. W. Clack and NMC Senior Economist Meg Blume-Kohout looks at prospective graduate students and how they decide whether to enroll in PhD biomedical science programs.

How can graduate students possibly see the future and predict their salary? Prospective students should gather information on what drives demand for labor in their field, and consider strategically how best to prepare while in school for non-academic careers, Blume-Kohout said.

This publication has recently been highlighted in the journal Nature in the article: Prospective biomedical postgraduate students ignore long-term salary prospects, according to analysis.

Blume-Kohout analyzes time-series data on wages and employment of biomedical scientists on completion of degrees. Consistent with previous studies in other fields like engineering, she finds student enrollments and completions in biomedical sciences Ph.D. programs are responsive to market conditions at the time of students’ enrollment, but prospective students do not seem to anticipate or forecast changes that will occur by the time they complete their degrees.

The study also found close correspondence between graduate student enrollments and completions, and changes in availability of National Institute of Health-funded traineeships, fellowships, and research assistantships.

Successful Ph.D. students appear to choose biomedical sciences training programs due to beliefs about their chances of securing a job as a biomedical scientist.

Interestingly though, this study shows students enter these programs with little regard to the salaries they will ultimately receive.

These beliefs seem to depend on the current market signals at the time of their enrollment, rather than anticipation of future market conditions. Prospective students should consider how changes in research and development funding, such as dips in agency budgets, impact salary trends and employment, Blume-Kohout said.

The NMC is a non-profit corporation established by the three New Mexico research universities. The NMC builds research and education partnerships with Los Alamos National Laboratory, the universities, and other university and industry partners from around the world. The scope NMC research spans computer science, space science, modeling and analysis and materials science.