THE IMPACT OF FOREIGN STUDENTS ON THE EARNINGS OF DOCTORATES
December 12, 2006
George Borjas of the National Bureau of Economic Research (NBER) analyzes the effect of the large number of foreign students who earned doctorates in science and engineering between 1968 and 2000 on the wages of Ph.D.s in those fields.
According to Borjas, as the number of people with doctoral degrees has increased, it has become more common for Ph.D.s in some fields to take a post-doctoral appointment (a "post-doc") as their first job rather than to proceed to a more secure and higher paying permanent appointment.
- The number of young Ph.D.s in post-doctoral positions is nearly 29 percent in the biological sciences, over 17 percent in physics, and almost 10 percent in chemistry.
- Yet, on average, a post-doc under the age of 40 earns $36,000 a year while the average salary for a regular appointment is approximately $65,900 a year.
- According to the 2000 Census, U.S. men with undergraduate degrees who were between the ages of 25 and 29 earned an average of $33,000; those who were 30-34 years old earned $42,300.
In short, salaries in post-doctoral appointments do not reward the additional years of education required for a Ph.D., says Borjas.
Immigration also appears to affect the wages of those who do not take post-docs:
- Between 1993 and 2001, immigration increased the supply of doctorates in all fields by an average of almost 14 percent.
- The wage of the average worker with a doctorate in science or engineering fell by close to 4 percent; in some fields, the effect was much larger.
- Immigration increased the supply of doctorates in computer science and mechanical engineering by 36 percent, causing wages to fall by an estimated 10 percent.
- In all, the influx of foreign students reduced the wage growth of science and engineering Ph.D.s by about 40 percent.
Source: Linda Gorman, "The Impact of Foreign Students on the Earnings of Doctorates," NBER Digest, December 2006; based upon: George J. Borjas, "Immigration in High-Skill Labor Markets: The Impact of Foreign Students on the Earnings of Doctorates," National Bureau of Economic Research, Working Paper No. 12085, March 2006.
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