Why PhD students are paid poorly?

A PhD student once told me sarcastically that “PhD stipends are low because universities want to train these PhD students for the poverty that will follow for a long time after they finish their PhD”. However, there are many other reasons for lower compensation of PhD work.

The question about PhD stipend comes naturally, especially if you are a middle-class international student and aspiring to pursue a PhD in the developed world. I am in the same boat too and I am also wondering why PhD stipends are so low and will a PhD stipend be enough for me during PhD studies?

Here are the three main reasons for lower PhD stipend

• The nature and conditions of academic labor market
• The perception of PhD scholar as a student instead of a worker
• Shrinking sources of funding

Let me break them down one by one for you

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1. The academic labor market

The law of supply and demand determines the value of any product or service.

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a) Number of PhD aspirants

There is an influx of PhD aspirants (supply) and a limited number of PhD positions (demand).

This means too much competition in the labor market. This fierce supply and lower demand is the reason that

• universities have to turn down most of the PhD applicants. The acceptance rate in good institutions is generally less than 10-15%.
• too much PhD students are willing to work on much lower salary (PhD stipend). In free market, there is no incentive for the employers to increase the salary if the workers want to work on lower rates.
• there may not be much impact of turnover to universities. Unlike industry, where high turnover means brain drain and loss of skilled labor. This directly affect employer products and services and in turn profits. Thus, forcing employer to increase perks in order to retain skilled workforce. However, academia perceive PhD students as unskilled labor who is not yet train for research. Universities already have a large amount of postdocs, adjuncts and assistant professors to take care of the research projects. In this research hierarchy PhD students lie at the bottom.
• comparatively low demand of your study subject in the industry. If subject is of less demand in industry then universities may not have to offer higher stipend to attract and retain students.

PhD Acceptance Rates

Country	University	QS World University Rankings 2021- Global Rank	Area of Study	Acceptance rate (Year)
US	Duke University	26	PhD Biochemistry	25/101=24.75%
PhD Economics	73/703=10.38%
PhD Population Health	51/288 17.71%
For other field of studies, check the 2019-20 acceptance rates here
US	Boston University	112	PhD Nutrition and Metabolism	72/582= 12.37%
PhD Speech, Language & Hearing Sciences	4/22= 18.18%
PhD Computer Engineering	23/74= 31.08%
For other field of studies, check the 2019-20 acceptance rates here
UK	Oxford university	5	PhD Astrophysics	13/118= 11.02%
PhD Business	3/105= 2.86%
PhD Population Health	20/146= 13.70%
For other field of studies, check the 2019-20 acceptance rates here
UK	University of Warwick	62	PhD Mathematics	30%
PhD Business	2.6%
PhD Biology	18%
For other field of studies, check the 2019-20 acceptance rates here and here Note: The data provided by the university under “Postgraduate” includes applicants for both Postgraduate Taught and Postgraduate Research level study. Therefore, actual acceptance rate for Postgraduate Research only may differ.
Canada	University of Toronto	25	PhD Business	31/342= 9.06%
PhD Civil and Mineral Engineering	39/164= 23.78%
PhD Aerospace studies	12/109= 11.01%
For other field of studies, check the 2019-20 acceptance rates here

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b) Priorities of the students

Students are willing to accept lower compensation for 4-7 years of their PhD studies because

• the prospect of earning a future salary looks good.
• the academic job can be best way to work in their opinion.
• the financial incentives are secondary for them

Increasing number of international students: You can observe from the table below that American graduate student is disappearing and how universities are attracting more and more international PhD students.

Citizenship status of PhD Students	1994	1999	2004	2009	2014	2019
U.S. citizen or permanent resident	30,904	30,312	28,040	32,327	34,003	35,274
International PhD students	9,421	9060	11,628	14,736	15,839	18,351
Unknown	709	1,728	2,454	2,489	4,144	2,078

Universities see many benefits in hiring international PhD students. These changes are being discussed in mainstream media too.

“… graduate programs have a financial incentive in attracting them: Demand from abroad is so high, administrators don’t see a need to offer as much tuition assistance.”

The Disappearing American Grad Student

In such, conditions universities may not find any incentive to increase the PhD stipend.

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c) Age

Demographics such as age may also be contributing to the lower PhD stipend.

Most PhD students are graduating in a phase of life where a meager PhD stipend is still higher than undergraduate pocket money.

Therefore, they may not complain about anything related to lower compensation.

Below is you can see the age distribution of doctorate recipients to get an idea about why a PhD low stipend may not be a problem for many graduate students.

Here you can check the details of the NSF survey of doctorate recipients.

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d) Priorities of the society

Funding for research is higher in societies that value science and are lower where people do not value science.

The general public may not be aware of the value of research. This leads to lower public funds for research.

The lower public funds for research means lower funds for the bottom of the pyramid researchers.

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2. Free Education or Cheap Academic Labor

There are two conflicting perspectives prevalent between PhD students and universities/ PhD advisors.

• Most universities/ PhD advisors view
• Most PhD students view

Let’s look at their arguments one by one

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PhD students are not workers

Universities and PhD advisors assert that

1. Training new researchers is costly
2. PhD students are still students
3. PhD students are getting free education

Here is why

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a) Training new researchers is costly

It costs the university to teach and train young researchers.

The cost may include

• tuition costs for the coursework
• training for research methods and expensive equipment use
• funding for experiments, conferences and presentations
• health insurances

In return, as a PhD student

• you are not producing any immediate value for the grant providers during initial phases of your PhD.
• your performance may not be optimal or even efficient as you are under training.
• You are a blind investment for the institute. It is hard to estimate value your output in advance. Artists and entrepreneurs survive such journey with their own fund. They are only rewarded years later when people start seeing the outcome of their efforts. You are privileged because, your advisor and department is taking a risk in investing on you. They don’t know your future outcomes yet.

Here is how Prof. David Maslach explains this blind investment and the economics of idea generation.

He also summarizes this point in the video description

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b) Still student, still under training

PhD student is not a worker, but an apprentice.

It is an apprenticeship because

• it is a return on investment. You are developing skills that will benefit you in the future.
• you are not immediately benefiting the employer. Industry worker provide immediate value and get paid for immediately.
• once you complete your research training (graduate with a PhD). You should be able to get better employment.

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c) Free Education

Unlike industry job you are getting a free education at PhD

You receive

• highly technical education without any tuition fee
• chance to pursue your own area of interest
• support, ideas and mentorship from leading scholars in your field
• resources of the university
• skills and expertise to approach and solve the most challenging problems

Thus, a PhD is a free education and an investment in your future.

It is expected that this PhD education and training increase your future job prospects by

• potentially higher salary after graduating
• greater independence in your work than those less qualified
• providing work opportunities abroad (conferences, postdocs)
• job security (tenure track)

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PhD students are full time workers

On the other hand, most PhD scholars argue that they are academic workers. In their opinion, PhD student is considered cheap labor for all the dirty research work.

PhD students are workers because

1. Employers train their workers too
2. PhD students does provide value

Here is why

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a) Industry also first train their workers

Employers also provide learning opportunities to their recruits.

Training employees is lauded in the industry to

• improve employee performance
• address employees weaknesses
• reduced employee turn over
• decrease the need for close supervision

Industry workers receive both

• on the job training, like coaching, job rotation and enrichment
• off the job training, like workshops, seminars and conferences

Just like academia, training costs in the industry also includes

• Training materials and equipment cost
• Loss of productivity (e.g., salaries paid during training)
• Payment for outside help (e.g., lecturers)
• Overhead (e.g., HR salaries, administration expenses)

Yet in industry, the training expense is not counted as part of the salary.

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b) PhD students also provide immediate value

As a PhD student, you work for your department and also provide value by

• contributing (doing most of the basic work) to the research projects of your advisors and departments.
• serving the department and university just like professors, administration and maintenance staff.

You can read more about PhD students’ value and compensation issues here (US) and here (UK). PhD students argue that

“Grad workers, like all workers, deserve to earn enough to live decently in exchange for the research and teaching labor they provide universities, many of which depend on the work of grad students and adjunct professors to function, maintain prestige, secure key grants and attract tuition-paying undergraduates.”

Grad Students’ ‘Fight for $15’

PhD students argue that universities can increase the pay of students by

• decreasing number of PhD students. This will allow institutes to have the most competent people on a stipend that can provide full support .
• organize university’s ever increasing bureaucracies to support early career researchers and not benefit the administrators of the university only.
• revising minimum funding requirements. Few universities are trying to compensate PhD students work by treating them as employees.

PhD students are not at the top of an educational hierarchy, they lie at the bottom of the research hierarchy.

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3. Sources of Funding

Lower research funding for a subject can decrease PhD students’ stipend too.

Research funding can be low because

• Acquiring grants is getting increasingly competitive in many field of studies.
• Some research areas might be more attractive to grant lenders than others.
• Most of the time grant lender specify the use of a grant and the university have less control over its allocation.
• Universities report that overhead costs (university’s administration cost beside research expenses) take most amount of the research grants.

Your PhD stipend may be higher compared to other disciplines because

• your research area is attractive to grant lenders
• your field of study has much higher salary in industry. This means to retain PhD students academic workers in your field the university may have to pay you a little bit higher to avoid any external inequity.

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Assistantships

If PhD students want to earn more they can do extra work on-campus.

I discussed these assistantships and their conditions in this article. Feel free to skim through the tables and figures to get an idea of the nature and pros and cons of funding sources during your PhD studies. This article is most relevant to the US PhD stipend.

However, the assistantship roles do not pay much, they just offer a modest compensation for the work you do.

Here is how a Professor explain the legal issues in increasing student stipend

“While fees cannot be legally covered, in certain cases such as research grants, professors are free to raise graduate workers’ stipends, Blondin said. However, because this is a source of income, it then gets taxed, meaning professors must pay students more than the cost of fees to fully cover them.

“Now with this federal ruling, I can’t pay the fees, but the easy solution is then I just don’t pay his fees, but I give him more money in the stipend,” Blondin said. “It doesn’t affect my grant, but he does get taxed on it, so I then have to account for the fact that I need a little bit more to cover the taxes on that.””

Grad student workers: ‘Overworked, underpaid and very stressed out’

On the other hand, look at some of the comments by students in the same article

““Not being paid for the hours that we work” 

Withrow said stipends tend to be rated for about 20 hours of work a week, but the reality is far outside of this.

“The stipends are generally officially rated at 20 hours a week of work,” Withrow said. “No one even pretends to think that’s what it is. It’s a full-time job; it’s a full-time-plus job. There is a tendency to romanticize the image of the hardworking grad student who is working long hours in the lab, and it’s not all bad. Ideally, we’re here, we’re passionate about something, we have this opportunity to learn, and we’re excited about it. The dark side is when the expectation is just outside of reality.”

Graduate students often spend over 60 hours working a week, according to Lexie Malico, a fourth-year Ph.D. student in chemistry and vice president of Student Governance Relations for GSA. Withrow said this is fairly normal.”

Grad student workers: ‘Overworked, underpaid and very stressed out’

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Final word

Traditionally, the PhD scholars were perceived as students. The faculty and universities expect them to be future academic researchers.

So, the low stipend was justified by the lucrative and stable academic career after PhD graduation.

However, with market changes, academic jobs got scarcer.

Due to this change, many are questioning the grind with low pay during a PhD.