There is a general rule about all investments. You sacrifice the present for a brighter future. This is the opposite of a divestment, in which a person sacrifices his future for a brighter present. Investment in mutual funds, property, companies, and stocks falls under this category. What about investment in a degree ?

In any investment, we need to be concnerned about about just one term, called ROI - Return on investment. This is the expected amount of return from the investment, especially in the long run. We need to evaluate any degree in this light. Let us now take a look at a couple of degrees such as B.Tech, MBA, MBBS, and Ph.D.

Let us take a look at MBBS first. By prepending a Dr. in front of a name, the MBBS degree gives its holder a monopoly in the healthcare profession. People without this degree are not allowed to legally practice medicine. Along with this very high barrier to entry, this also guarantees access to an universal profession. Any corner of the world that you go to, a doctor will always be required. This is independent of the geography, culture, climate and politics. People are willing to compromise on almost every luxury in life, other than good health. This ensures that doctors will always be sought after. It also ensures that doctors will always be employable, have a lot of options to find jobs, and enjoy an exalted sense of respect in society. To a large extent this is true in India and United States - the societies that I am most familiar with.

The other good thing about an MBBS degree is that it has an infinite shelf life. This means that once a doctor, always a doctor. This might not hold across countries. However, most countries have fairly straightforward ways of recognizing degrees from other countries. Let us define three essential requirements of a degree on the lines of what we have discussed.

1. Barrier to Entry
2. Shelf Life
3. Quality of a Typical Job

Let us now consider another degree like LLB (Bachelorate in Law). It clearly guarantees a barrier to entry, because nobody else is allowed to practice law. After one obtains a license to practice in court, the degree and associated licenses remain valid ad infintum. Finally, the legal profession is very interesting and challenging. Especially, in post liberalised India, corporate law has become a very prestigious profession.

From this discussion, we observe that we want a degree that guarantees a long, reliable, and successful career.

Sadly, a lot of first line degrees like B.Tech or B.Sc fail some of these criteria, which necessitates the need for higher education. Let us consider the quintessential case of a very bright person holding a degree from a premier institution. Let us assume that she holds a B.Tech in computer science.

In this case, the barrier to entry is the knowledge of computer science. It will be hard, though no impossible in today's scenario for somebody with a degree in mechanical engineering to get the same job as she is doing. Even if we consider computer scientists, India produces thousands of them every year. The job market is full of good computer  science resumes from very good institutes at almost every level. This makes it difficult to enforce a barrier to entry.

Let us now look at shelf life. As mentioned earlier, a degree in medicine or law lasts for as long as a person is alive. However, the situation here is slightly different. A bachelor's degree, is a troika of three parameters - university rank, class rank, and project experience. A bachelor's from a prestigious institution is the most beneficial at the time of campus interviews. Students from premier institutions have a  clear advantage in campus placements as compared to others. However, this is just for the first job. What about the second and third jobs? The answer to these questions would have been in the positive if the job market enforces a strict barrier to entry based on the prestige of the bachelor's degree. Unfortunately, this is not the case. A good bachelor's degree is not very strongly correlated with success in a job.

It is true that the probability of a student passing out from a premier institution doing well in later life, is high. However, this is neither a sufficient nor a necessary condition. If we take a look at the profile of people in top US universities, or in top companies in India, a discerning reader would agree with my conclusion.  Secondly, performance in a job also depends upon many other soft skills like good communication, networking, and sometimes sheer luck. Please note, that I am not advocating that people should not strive to join top colleges for obtaining their bachelor's degrees. All I am saying is that a good bachelor's has diminishing returns. It is the most useful at the time of regular campus placements. Some of the sheen wears of after three years, when people typically look for their second job. By the end of ten years, potential employers are much more interested in the work experience gained over the last ten years, than pedigree alone.

Lastly, let us take a look at job quality. This in my opinion is highly variable. A good bachelor's degree ensures that the person gets a head start. I would opine that a premier institution ensures that its graduates have a high mean job quality in the job market. Somebody, from an institution with a lower stature, will start at a lower mean. Now, the job market will induce some variance over and above this mean. Given the the economic and geo-political disturbances that characterize our times, the variance is pretty high. Based on a lot of  resumes that I have seen in my brief stint in corporate India, at the end of about 15 years, a large part of the initial gains can get lost. At this point, job experience and successes in previous jobs becomes very important.

This is where, I would like to make the case for higher education, especially for degrees like M.Tech, MS and Ph.D. Let us consider the case of Ph.D first.

Like MBBS, it also prepends a Dr. in front of the name. It also gives exclusive access to high end research facilities, and academic institutions. I have seen a lot of request for proposals in industry that explicitly require the head of the project to have a doctorate degree. In this sense, it enforces a barrier to entry. It also has an infinite shelf life. Even after 50 years, certain jobs would still require a person to have a Ph.D primarily to satisfy some legal requirements. The degree does not lose most of its sheen over time.

I wouldn't really bat for job quality here since it is a very personal and very subjective opinion. I personally feel that a job in a research lab or in academia gives people a very high degree of independence. However, people can tend to think otherwise. Nonetheless, for people who care about freedom, and creativity, it is certainly a very good option.

To some measure, a master's degree carries a lot of these benfits. I remember a very successful manager in a very top company once telling me that one day the fact that he didn't have a master's would catch up with him. He was considering joining a master's program.

The crux of my argument can be summarized in this table.

Degree	Barrier to entry	Shelf life	Job quality mean	Job quality variance
MBBS	very high	high	high	moderate
LLB	very high	very high	high	moderate
B.Tech from premier inst.	low	low	high	high
B.Tech from non-premier inst.	low	low	low	high
M.Tech / MS	moderate	modate	high	moderate
Ph.D	high	high	high	low

My premise is that MBBS is probably a very important degree as compared to many others because it instantly allows a person to make money even out of an individual enterprise in any corner of the world.  However, even higher degrees in medicine are sometimes required to get an even better professional life.

For engineering degrees, my humble opinion is that a good B.Tech ensures that graduates have a very good starting point. However, beyond that, they fall prey to the vagaries of the real world. Since success in a job depends on technical skills, soft skills, and sometimes being lucky enough to be at the right place at the right time, professional success can be highly non-deterministic.

My views are that a higher degree like MS or Ph.D can decrease some of the non-determinism induced by the real world and provide some much needed additional job security. Furthemore, it also allows people to take on professions like teaching even after they retire from their regular jobs; thus, ensuring that their employment is life long.

My two cents
Smruti Ranjan Sarangi