Saturday, August 20, 2011

Are professional degrees a bad financial deal for the median woman?

We find that the median female (but not male) primary-care physician would have been financially better off becoming a physician assistant in a primary-care field. This is partially due to a gender wage gap in medicine. However, our result is mostly driven by the fact that the median female physician simply doesn’t work enough hours to amortize her up-front investment in medical school. In contrast, male physicians work substantially more hours on average and the median male physician easily works enough hours to amortize his up-front investment. ...

This raises the issue of whether these findings bear any relationship to the NPVs for obtaining other professional degrees such as JDs and MBAs.

This is difficult to determine. Of course, both the MBA and JD require much lower up front initial investment than a medical career. On the other hand, there is substantial evidence that female doctors “drop out” of their professions less than women lawyers and (especially) women MBAs. For example, Herr and Wolfram (2008) find, in a sample of Harvard graduates, that 94.2% of MD mothers remain working in their late thirties, as compared to 79% of JDs and 72% of MBAs. The AMA Masterfile similarly shows very low attrition rates for young women doctors, approximately 3% of the 45-54 year old age cohort. Nonetheless, while our results are not driven by high dropout rates from the medical profession, they are driven by the shorter hours of female professionals.
--Keith Chen and Judith Chevalier, “Are women overinvesting in education? Evidence from the medical profession”