What is the value of a PhD degree? Why should you pursue one?

Text published in the Journal “O Visconde” of the Student Union Center of the University of São Paulo, in the third edition of August, no. 25 (https://oviscondedotcom.files.wordpress.com/2015/08/o_visconde_agosto_2015_site.pdf).

“Not everything we quantify matters,

And not everything that matters can be quantified. “

Albert Einstein

(Apud, What Management Is, J. Magretta, p. 119)


If you are an undergraduate freshman, this question may seem very distant, hasty. You may not even know for sure what a PhD degree is nor why should you pursue one.

I will try to answer these questions from my personal experience. I am an economist, but I believe that these answers may serve other career choices.

I will address these questions from two different angles: the rational and the emotional. These approaches may appear to be different, but at the bottom they are not. They are two sides of the same coin.

Rational Approach

A PhD is a long-term strategic investment. Strategic because it is an investment in yourself, in your ability to differentiate yourself from your competitors in the private, public and academic labor market. Long-term, because it encompasses not only the four years of the program itself, but an intellectual and financial preparation that should start as soon as possible, since the undergrad, and goes on until the end of your career.

The PhD program is capable of teaching you some important things that one may also learn in undergraduate and master’s degrees, but in the doctorate, the level of depth is much higher and more intense. What does the doctorate teach us?

1) Develop your own technique for studying. This is worth gold, because one never stops studying and learning. And when one stops, one gets out dated. And each one of us has their own way of studying. And after earning a PhD there are no more advisors. You are on your own. You can (and should) team up with both academic and non-academic co-authors, but you have to manage your own learning curve.

2) How to research. Gold again! The world is filled with an incredible amount of public available data, nonetheless too many important questions remain unanswered. The world is full of mysterious phenomena, both in academia and in the non-academic market. There are also some important questions that we believed to have found the answers, but actually, we hadn’t. The doctorate teaches you how to ask questions that matter. Then it teaches you how to try to find possible answers. Sometimes in the doctoral exams, professors ask questions that even they themselves do not know the answer to. They want to know if you can think. To ask the right questions, to present the problem and possible solutions.

3) How to endure. I never forget my first week in the doctorate program. I met a fellow student who had been in the program for the past four years. I asked: “what does it take to earn a PhD? Must one be a genius? He replied, “you do not have to be a genius, you must be patient.” Patience, discipline and perseverance are key ingredients in any long-term strategic investment. From a doctorate, a marriage, a start-up, a career… to any long-term valuable investment, one must endure.

4) How to teach. In the PhD program is possible to assist professors to teach at undergraduation. That is, one can become a teacher assistant. This is very precious. It is worth more than the salary you earn. The best course I took during my PhD was “Introduction to Economics”, when I taught basic economics for undergraduates. It is one thing to study and understand a concept, a model. Another thing is to teach what you learned to someone else, specially to one that does not have any economics background. You learn a lot by teaching.

Therefore, a PhD enables you to study, research and teach with perseverance and various degrees of depth. On top of that, a doctorate is an international title. It’s like an “international driver’s license,” which you can use in Brazil, Australia, wherever you want. It increases your ability to come and go. This gives you options. In economics we learn that options do have value.

Besides opening the doors of the world, a doctorate can also allow you to work both in the academic and non-academic markets (banks, consultancies and companies). Those markets do not always know how to price a PhD properly, but I believe it’s just a matter of time. I believe to be of great value to experience both the academic and the non-academic markets. It is the opportunity to articulate theory with practice and vice versa.

Emotional Approach

Repeating: a PhD is a long-term strategic investment. Just like in other long-term investments, for example, a career in a company, a start-up, a marriage, children, a foreign language, a sport, a musical instrument, you have to take chances. Invest in your desire. And, like all long-term investments, there are no guarantees of success. But desire is fundamental.

How can you tell if you like it enough to sustain a doctorate?

Only time will tell.

I can tell you that if you have read this far, there is a desire. A desire that must be taken into consideration.

For me, the certainty that I really like economics took me 20 years to realize. But let’s face it. Studying is hard and can be very lonely. Don’t even get me started in taking tests… But the fact is that I was able to complete my bachelor degree and my PhD. These cannot be achieved without wishing for it.

After my PhD I worked as an economist in major institutions abroad and in Brazil. I had bosses that I admired and tried to follow, to imitate. There were no more exams. But there were Key Performance Indicators to achieve.

Along my career as an economist in major institutions, I made mistakes. I got it right too. But it was only when I decided to start my own consulting firm, where I was able to choose what I was going to work on and research, that I realized how much I love economics. A piece of a poem by Fernando Pessoa illustrates this moment perfectly:

“Sit in the sun.


And be the king of thyself “

I also discovered what fascinates me the most in economics: the object of study and its method, that can be summarized as follows:

“Increasingly, economics has become a quantitative discipline of numbers. But its primary goal is to explain human behavior. “

(Magretta, p. 203)

Are there alternatives paths to a PhD? Yes! It all depends on what you want and how you want it. The doctorate can be one of those paths, which begins with a well-defined structure (e.g. credits to be fulfilled), but ends with you and your own desire. A PhD is also an enterprise. And you can either undertake it within an existing company, or create something new, for example.

Regardless of the path chosen, you must know that there are no shortcuts. Any path to sustainable differentiation comes with a lot of effort, perseverance and long-term vision. Desires are expensive. Your own legitimate desire is even more expensive.

Finally, regardless of the path chosen, remember that it takes humility to progress. What is humility? Humility is knowing that you are not better or worse because you have a PhD. You’re just different. Never forget that undertaking a PhD is just one step. After having been granted one, comes the most important decision: what are you going to do with your PhD?

Good luck on your journey.

My best regards,

Eduardo Luzio

Sobre Eduardo Luzio

Economista pela USP (88) e PhD pela PhD University of Illinois (93). Consultor em finanças corporativas e estratégia. Professor de finanças na FEA-USP, FGV -SP e Insper.

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