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Globalization and US Academia

According to this poll, Americans are becoming increasing disenchanted with globalization, seeing the phenomenon as hurting this country. Because my area of expertise is Computer Science, I have only a cursory understanding of complex economic processes such as globalization. However, as an academic insider, I am deeply convinced that the academic system in the US–at least with respect to sciences and engineering–is inextricably tied to the global economy, without which the system would not be able to function.

The two main techniques by which gold is extracted from the earth are placer mining and hard rock mining. Placer mining moves enormous quantities of sand or gravel in a stream bed to separate minuscule quantities of the precious metal. The method requires that almost unlimited deposits containing gold be available. By contrast, hard rock mining excavates the golden ore from underground through shafts or tunnels. Discovering hard rock mines containing gold is an enormously difficult undertaking that requires expertise, persistence, and luck.

Good researchers are like gold. I argue that in the US we use placer mining to extract our research gold. How does it work? Every year, masses of talented and motivated young people from developing countries are coming to the US universities to pursue their Ph.D. degrees. For these young people, the money they can make as graduate research assistants is comparable to what they can make if they took regular jobs (if they were even available) in their home countries. Thus, their opportunity cost is close to zero.

Talking from a purely economic perspective, getting a Ph.D. is a losing proposition for an American college graduate. Let’s assume that it takes about 5 years to get a Ph.D. and that a Ph.D. trainee can make $20K a year on average. If the same college graduate instead took an industry job, their average salary can be around $70K. (Of course, this is just an estimate, but it will make the point just fine.)

Thus, for an American college graduate, the opportunity cost of getting a Ph.D. is 5*(70-20) = $250K. Let’s assume that a holder of a Ph.D. degree can expect a bigger paycheck. How much bigger a paycheck has gotta be to amortize a quarter of a million of the opportunity cost?! Of course, we are not even considering the non-financial opportunity costs of getting a Ph.D., which include delaying marriage and family formation.

Through our place mining Ph.D. producing system, we graduate a never diminishing glut of researchers. A small percentage of these researchers are able to secure jobs that do require a Ph.D., such as academic faculty, research scientists, etc. The system has mined its research gold.

The majority of freshly minted Ph.D.s, however, get industry jobs, few of which require Ph.D.-level training. Thus, for many foreign students Ph.D. training becomes a way to legally immigrate to the US. In the gold mining analogy, those graduates are what is left once the gold has been mined.

Thus, the US academic system is a win-win arrangement entirely due to the global economy. At least in sciences and engineering, the percentage of international Ph.D. students surpasses, often significantly, that of  American students. Without those masses of talented and motivated young people from across the world coming to the US to get their Ph.D., the academic system would not be able to function.

There are some worrying signs on the horizon. More and more Ph.D. graduates now choose to go back to their countries to take advantage of the emerging opportunities there. As a result, the glut of Ph.D. level scientists in this country may start dissipating. Furthermore, as the research infrastructures are improving throughout the world, fewer young people may choose to come to the US to receive their research training.

The real danger is that this country is not prepared to go after its research gold using hard rock mining. This would require identifying and cultivating local talent much more effectively than it is done now. Among other things, it would require improving the K-12 educational system and reorienting the popular culture to value sciences and engineering–non-trivial tasks by any means.

In conclusion, globalization has an overwhelmingly positive effect on the US academia. In fact, the current system is entirely dependent on the global educational economy. However, rapid economic growth in the developing countries may require that the US academic system adapt for the new realities. I am not sure though whether the system is capable of adapting.

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Categories: academic enterprise
  1. September 17, 2013 at 10:21 pm

    “Of course, we are not even considering the non-opportunity costs of getting a Ph.D., which include delaying marriage and family formation.”

    Those are all opportunity costs. If you get a Ph. D, and delay your marriage by 4 years, the opportunity cost of a Ph. D. is 4 less years of marriage. If you get married instead of getting a Ph. D, the opportunity cost for 4 extra years of marriage is a Ph. D.

  2. September 17, 2013 at 11:45 pm

    Good point, no disagreement here. Thanks for reading and commenting!

    In my discussion, I was focusing solely on financial costs, on which you can place a dollar amount. Perhaps, I should rewrite this sentence as follows:
    “Of course, we are not even considering the non-financial opportunity costs of getting a Ph.D., which include delaying marriage and family formation.”

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