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Ph.D. Enrollment and the Option Value of Industrial Careers

Author

Listed:
  • Airi Hayama

    (Graduate School of Economics, Keio University)

Abstract

Japan promotes doctoral education by providing financial support to Ph.D. students and encouraging firms to hire graduates. To evaluate these policies, this paper develops a heterogeneous agent macroeconomic model in which Ph.D. graduates can work in the industrial sector as well as in the academic sector. In general equilibrium, the industrial-sector career option barely works as insurance for students who aim for an academic career. In the economy with this career option, a student subsidy generates a larger increase in overall enrollment than a hiring subsidy of the same fiscal cost. The hiring subsidy instead moves some students who would have entered academia into industry and raises aggregate output. These results suggest that the choice between these fiscal policies should depend on whether the goal is to attract new Ph.D. students or to change the careers of those who would enroll anyway.

Suggested Citation

  • Airi Hayama, 2026. "Ph.D. Enrollment and the Option Value of Industrial Careers," Keio-IES Discussion Paper Series DP2026-024, Institute for Economics Studies, Keio University.
    • Handle: RePEc:keo:dpaper:dp2026-024
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    File URL: https://ies.keio.ac.jp/upload/DP2026-024_EN.pdf
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    Keywords

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    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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