Is Medical School a Worthwhile Investment for Women?


I have a casual acquaintance who is a pediatrician. She has four children close in age to my own children and works one night a week on the mother/baby unit of a local hospital. I remember running into her there the day after giving birth to one of my daughters. She looked even more tired than I did. I remember shortly after I’d met her for the first time, about nine years ago, I mentioned her to my wife and told her that she was a doctor but only worked one day a week. He commented that this was certainly a big waste of a medical degree. I disagreed with him and said that I thought it was wonderful that she was taking the time to be home with her children.  Now of course I have a different mindset on such things and agree with her that she is wasting the investments that were made in her education and career. It would be better if she had not gone to medical school at all, thereby freeing up the spot for a man or for a woman who intends not to have children of her own. Over the last quarter century, women have been earning college and professional degrees in record numbers. In 1976, women earned only 45 percent of bachelor’s degrees in the United States. By 2006 that had increased to 58 percent. During that same interval, women have made even larger gains in advanced degrees.

For example, in 1976 women constituted only 24 percent of first year medical students. By 2006, that number which doubled to 48 percent. Despite these gains in education, a number of recent studies find that women’s incomes lag those of men. In a study of MBA students from a top program, Marianne Bertrand, Claudia Goldin, and Larry Katz found that while men and women had similar earnings at the outset of their careers ($115,000 per year for women versus $130,000 per year for men), within ten years of graduation men outearned women by $150,000 per year. Similar income gaps have been found for doctors and lawyers. Of course, feminists will say that this is either due to outright discrimination in pay or due to women feeling like they "have to" work less in order to care for their families. This raises two interesting and uncomfortable questions. First, why do women earn less? Second, if women benefit less from these high-end professional degrees, but pay the same high costs in time and money to acquire them, have their degrees actually paid off? That is, would women have been better off not getting those degrees? In a study being published this month in the Journal of Human Capital, we try to shed light on these questions by looking closely at doctors in primary-care fields and a plausible alternative career for anyone entering medical school, Physician Assistants.

The first PA program started in 1965 at Duke University, and was initially designed to provide civilian medical training to field medics returning from Vietnam. Interestingly, while the PA field started out all male, the majority of graduates today are female. The PA training program is generally 2 years, shorter than that for doctors. Unsurprisingly, subsequent hourly earnings of PAs are lower than subsequent hourly earnings of doctors. Focusing on the financial repercussions of these career choices, we use a tool common for analyzing investment called a net-present-value (NPV) calculation. An NPV calculation adds up the costs of obtaining a degree, and all of the earnings received over the career that degree enables, taking into account the fact that money earned later is not as valuable as money earned earlier (due to interest), summarizing a career decision in a single number. This captures the insight that in order for an investment in the high up-front cost medical degree to overcome the lower up-front cost of a PA degree, not only do a doctor’s wages have to significantly exceed those of the PA, but the doctor needs to be willing to work enough hours to make those wages really pays off.