Is Medical School a Worthwhile Investment for Women?

The average female primary care physician would have been financially better off becoming a physician assistant.

The average female primary-care physician would have been financially better off becoming a physician assistant.


Brian Snyder/Reuters

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.

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. Physician assistants (PAs) are medical professionals who diagnose and treat illness under the supervision of a physician and who may, in all 50 states and the District of Columbia, write prescriptions. 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 pay off.

To see if doctors do indeed work long enough hours, we looked at data from a Robert Wood Johnson survey of physicians on how many hours female and male primary-care physicians work at different points in their careers. We combined that with data from the American Academy of Physician Assistants.

We then compared the earnings of male and female physicians in our data and estimate what those individuals would have earned if they had worked as PAs.

We found that, for over half of woman doctors in our data, the NPV of becoming a primary-care physician was less than the NPV of becoming a physician assistant. In contrast, the vast majority of male primary-care physicians earned an NPV greater than the NPV earned by a male PA. That is, while the vast majority of male doctors are financially better off for having become a doctor, the median female primary care physician would have been financially better off becoming a PA.

Where does this result come from? As you might have guessed, it is partially due to a wage gap. Male doctor earns more per hour relative to the male PA than the female doctor earns relative to the female PA. However, a big part of the difference comes from an hours gap. The vast majority of male doctors under the age of 55 work substantially more than the standard 40 hour work week. In contrast, most female doctors work between 2 to 10 hours fewer than this per week.

Even though both male and female doctors both earn higher wages than their PA counterparts, most female doctors don't work enough hours at those wages to financially justify the costs of becoming a doctor.

We also examined alternative medical professions such as pharmacy, and our basic findings were the same. Programs that have high upfront training costs only make financial sense if you plan to work enough hours later on, and many women doctors do not end up working enough to justify the costs they pay.

It is worth noting that this specific result pertains to women primary-care physicians who work about 40 hours a week. Obviously, some women doctors work more hours, and some work many fewer. Women working significantly more than this do get a financial advantage from becoming a physician.

Do these results mean anything for women undertaking other advanced professional degrees such as the JD or MBA? The kind of analysis that we do in our research is not easily applied to many other professions. For doctors, it is reasonable to assume (and the data support) a fairly simple relationship between hours and earnings. Work more hours, see more patients, make more money. It is much harder to track down the relationship between hours and earnings for many other professions.

However, the issues that our research raises are certainly relevant in other fields. Indeed, there is evidence that women doctors actually "drop out" less frequently than women lawyers and (especially) women MBAs. For example, a 2010 study by Herr and Wolfram find that in a sample of Harvard graduates, 94 percent of mothers with MDs remain working in their late 30s, compared to only 79 percent of JDs and 72 percent of MBAs. One of the attractive features of primary care medicine is the possibility to scale up or scale down the workload -- flexibility often not feasible for an executive or investment banker. If one scales down enough, though, the upfront investment of becoming a doctor isn't recouped.

Does this mean that women should not become physicians? Certainly not. Our results suggest that correctly forecasting how much you will work later in life should influence your career choice. But that forecast may be very difficult for a young person to make accurately. Also, there are clearly a host of reasons that people choose their careers that are not captured in our NPV calculations--like inherent satisfaction from the work. Still, in a time when student debt can rival mortgage debt, the costs of higher education have never been higher. Thinking through what kind of work schedules would justify these costs is an important part of making smart career choices for both men and women.