Worthwhile doctorate: When a doctorate can bring you thousands of euros more per year

In Germany, 1.2 percent of employees have a doctorate. Getting there is hard work.
For engineers, law graduates, economists and natural scientists, a doctorate can mean an average salary increase of 10,000 to 20,000 euros per year.
Personnel consultants still attest to the title's "charisma" today. However, according to experts, it is not worthwhile to earn a doctorate for financial reasons.
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Opinions are divided on the doctorate. Some people are eager to get their doctorate, even if they have already been stripped of their title because of passages they have written off. They simply acquire a new one. Other people would never think of spending longer than necessary on books and sources for a doctorate: too long, too strenuous, too uncertain a path.

For many, however, working their way up to a doctorate is fulfilling - albeit a back-breaking job. It takes an average of four and a half years to accumulate knowledge in a field, to make one's own contribution to a research area, and to document and defend it.

According to the Federal Statistical Office, there were 29,000 completed doctoral theses per year in 2019. "There have never been more doctorates in Germany," says Kolja Briedis, project manager at the DZHW, who has been researching this for years. At the end of June 2020, the number of employees with doctorates subject to social security contributions was just under 1.3 percent, according to the Federal Employment Agency.

Doing a doctorate while working - "the great exception"

Ulrike Schwabe is one of them. The sociologist from Hanover, who will complete her doctorate in the summer, has been dividing her time for years. "I've either been active in university teaching or worked on research projects," she says. Her current position is also in her field of research: as a research associate at the German Center for Higher Education and Science Research (DZHW) in Hanover, Schwabe analyzes the career and life trajectories of doctoral students and graduates. To this end, extensive data is collected and analyzed as part of the "National Academics Panel Study."

"A supportive environment and appropriate structures are helpful for doctoral students," says Ulrike Schwabe. After all, doing a doctorate and working full time in a different context at the same time is exhausting. Those who don't have a scholarship earn their living in various jobs or as employees. Schwabe herself gained work experience before the title, which helped her later. There were a few years between her master's degree and the start of her doctorate, during which she taught undergraduates, among other things. Even then, she was employed at the DZHW. Then the doctoral topic arose.

10,000 to 20,000 euros salary increase per year possible

The timing of a doctorate also plays a role. Eva Haeske-Braun, Director of New Placement & Career Consulting at Kienbaum Consultants, estimates that earning a doctorate immediately after completing a master's degree is less likely to have financial disadvantages for a job in the private sector. "The question is: What do I want to achieve? Where do I want to go with the title?" she says. "How important is it for the industry I work in? What does my company get out of it?" She knows people who do part-time doctorates because they like to dig deep into something. But that's the exception, she says. "Industry is practice-oriented and not a science business."

Economically, a doctorate is worthwhile. "But you have to be able to commit yourself very strongly. If you only want to do it for better salaries, you'd better not do it," says Kolja Briedis. On average, professionals with titles outside research, development, and academic teaching earn just under 5,700 euros gross per month. Depending on the subject and industry, doctoral graduates earn several thousand euros more per year than colleagues without titles.

Engineers, law graduates, economists, and natural scientists benefit. "For them, a doctorate can mean an average gross salary increase of 10,000 to 20,000 euros per year," says Briedis. Engineers with a doctorate can even generate up to 20 percent more income per year. The researchers didn't see that to the same degree for humanities graduates. "We also see smaller income effects for psychologists."

The salary for PhDs is barely any higher in the public sector

The researchers also saw the benefits for graduates in medicine or mathematics. The chemical industry represents a special case. Chemists hardly have any career opportunities without a doctorate, says Briedis. 90 percent of them have a doctorate. But the title does not mean more money everywhere. "The public sector hardly pays employees with a doctorate any better." Payscale structures take academics in general into account - whether they have a doctorate or not. Briedis collected the data for a study in the new "Federal Report on Young Academics," which will be published soon.

One reason for the income advantage for people with titles: They're thought to have a lot going for them. "Tough, high-performing, motivated - many people automatically attribute these qualities to people with doctorates," Briedis says. Because of their dedication above and beyond the norm, they rise more quickly to performance positions, the assumption goes. Human resources consultant Reinhard Scharff confirms their performance. "The points are made on the scientific track," he says. "Those who have a doctorate are at the height of their knowledge and intelligence. That's where, in my opinion, new, comprehensive connections are recognized at every stage and new things are created from them."

In the workplace, that seems to be happening: One-fifth of doctoral graduates are still working at the university seven years after earning their doctorate. Twenty percent are doing research in the industry. The majority, about 60 percent, no longer have anything to do with research. "We see that mathematicians and engineers are especially sought after in research and development in various industries," says Kolja Briedis. "At pharmaceutical companies or also in future fields such as regenerative energy technology."

The doctor in business - more "acceptance and perception"

The influence of the doctor is clearly there, says Eva Haeske-Braun. A certain signal effect of the title ensures radiance. "Where it's a matter of publicity, for example in associations or when professional authority is to be underscored, the title helps with acceptance and perception." This is then independent of the field of study, he says.

Reinhard Scharff believes in the power of a hierarchy. "Hierarchical structures in leadership require not least externally visible badges of rank," he thinks. "In principle, flat hierarchies do not change that. Nor does the argument that companies today are fractally structured or that Bezos, Gates, and Jobs didn't have titles make much sense." Scharff has a doctorate himself.

The title can polarize

The doctorate can polarize. Recruitment consultant Eva Haeske-Braun points this out. "In some professions, you need the doctorate; in others, such as advertising, you work better 'on the job' as a bachelor," she says. For key account managers or salespeople, a master's is enough to see eye-to-eye with customers, she adds. "If you're selling products in the technical field, where the majority of people have doctorates, it helps if yours is too." PhDs also have a better standing in management consultancies, he said. In controlling and finance, on the other hand, it doesn't matter, he says.

The doctorate probably only has its full effect later in a person's career. In supervisory boards, management boards, and working groups, for example, HR consultant Scharff experiences how "holding a title automatically leads to positional power." "There is something like 'understanding,'" he says. From his work on the boards of insurance companies, banks, and mechanical engineering companies, he says he is used to being addressed with a doctorate. "In terms of external presentation to customers or banks, that's the best marketing."

Theorists far removed from practice? What helps against the stereotype

Younger people with a doctorate encounter another phenomenon in their first years of working in the private sector: the cliché of the theoretician who is far removed from practice. "When I start my job at 31 after a doctorate and colleagues of the same age have five years of practical experience ahead of me, it naturally makes itself felt," confirms Haeske-Braun. There's only one thing that can help: get stuck in and make up for the lack of practical experience.

Ulrike Schwabe is still close enough to see what universities could do to support doctoral students interested in the free labor market: In the future, universities could adapt even better to the fact that many doctoral graduates later pursue careers "away from research." Career services at universities could do an even better job of informing the group of doctoral students about career options outside the university and provide course offerings for acquiring interdisciplinary skills. The need is there.

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