Opportunity cost

After my last rant, I got an email asking me to elaborate on the opportunity costs of graduate school. Yes, all right.

“Opportunity cost” is a term borrowed (I believe; correct me if I’m wrong) from finance. It refers to what your money could be doing for you over there if you hadn’t already committed it over here. What you give up to pursue the choice you pursue.

For example, if you leave money in a savings account for thirty years instead of paying off your mortgage—the opportunity cost is the extra interest you’re paying on your mortgage, minus the piddling little bit of interest the bank pays you on your savings. You had an opportunity, you didn’t take it, it cost you. Simple.

Wilf Cude, like many, talks of the financial opportunity cost of graduate school. He doesn’t mean the obvious expenses of grad school, like tuition and loan interest. Opportunity cost is the income you will never earn because the time you would have spent earning it you spent in grad school instead—and opportunity cost typically dwarfs the overt costs of school.

There’s a subtler opportunity cost, too: the cost in raises and promotions of starting in the job market at a later age. Me, I’ve paid the hell out of this one, you better believe. My boss is quite a bit younger than I am; it’s a simple matter of her having done her time on the lower rungs, and me not. (If I’d had any supervisory experience, chances are good I’d have landed her job. But I didn’t, so I didn’t. Just as well, in hindsight, but even so.)

Other opportunity costs come to mind—with the crazy inflation in the housing market, a lot of places, there’s an opportunity cost to not being able to settle down. Things like that. But foregone income and lost raises are the biggies.

So much for the financial opportunity cost. Wilf Cude and I don’t by any means think that’s all.

Cude points out the opportunity cost to society of locking up smart people in grad school for however many years only to have one-quarter to one-half of them wash out. Lovitts adds to this (and I concur) the additional time cost of these folks putting their lives and their sense of self back together—not a few attriters end up (by any reasonable measure) underemployed, occasionally for quite a while. Not a few of them are physically ill by the time they leave; I’d hit the doctors a couple of times myself. Not a few are mentally ill; I was. Fixing all that stuff costs.

I’m going to point out the opportunity cost in intangibles. Family. Friends. Enjoyment. Achievement. Because, you know, I let the money and the status go a long time ago, but I still vividly resent what I paid in intangibles. The text-geeking I could have done in those four and a half years… the time I spent miserable that I could have spent happy and productive… the good books I could have read and didn’t because I was reading grotesquely gooey pastorales and craptastic Spanish imitations of Boccaccio, of realism, of French romanticism.

(Boccaccio imitations aside—they’re earlier, obviously—nineteenth-century Spanish literature is a vast and forbidding wasteland until you get to the Generation of 1898. I have utterly forgotten the Clarín and Pérez Galdós I read in grad school, and you have no idea how wonderfully happy that makes me. Dreadful stuff. Horrid bad.)

So that’s opportunity cost, in a nutshell.

I never thought in these terms while I was in grad school. I bought into the perseverance meme—if I’m only stubborn enough, if I can just hang in there, it’ll all come right. I never asked myself—I never dared ask myself—what I was letting slip through my fingers.

This is another post I wasn’t going to post, request notwithstanding. What made me post it was this entry I happened upon via Ampersand. (See comments to it at the blogger’s main blog.) If grad school taught me any lesson at all, that was it—doing nothing, continuing blindly and stubbornly along a road just to avoid turning off it, is also a choice, and often it’s far from the best choice.