A graduate degree may be your key to advancement–though you can probably get a good job now
BY RON LIEBER, CAROLYN KLEINER, AND JOELLEN PERRY

Last spring, as a senior at Harvey Mudd College in Claremont, Calif., computer-science and math major Nat Peterson considered graduate school briefly. Then he got a job offer from Scient, a start-up firm in San Francisco that develops ''E-businesses.'' Compared with the $55,000 a year plus stock options that Scient was offering, the prospect of academic research held little appeal. Peterson has since built most of Scient's corporate intranet system and is now designing online business strategies for a national bank.

This is the sweet reality of the millennial job market, where the lowest unemployment rate since 1970 makes an advanced degree seem superfluous to many college grads. According to a survey by the National Association of Colleges and Employers, job opportunities for people with a bachelor's degree will increase by 10 percent in 1999, and starting salaries should rise by 4.8 percent. No wonder that, after years of steady growth, overall enrollment in graduate programs has declined over the past two years.

Value. But if grad school is not a prerequisite for that first great job, it may be a necessity for advancing beyond it. Unlike 30 years ago, when graduate education was generally a luxury–the intellectual pursuit of an elite few–many of today's workers will not be able to remain marketable without an advanced degree in this era of warp-speed technological change. The demographics of current graduate students suggest that more people are recognizing the strategic value of continuing education. The average master's candidate is now a working woman in her 30s who goes to school part time. More than half of all graduate students are over age 30, and nearly a quarter are over 40. ''We're shifting to a [system] where people are going back to school throughout their careers,'' says Peter Syverson, vice president for research at the Council of Graduate Schools.

As employers' needs are transformed by technology and by the global economy, graduate schools are finding innovative ways to keep their student ''market'' competitive. Business schools, for example, have designed new fields of concentration–electronic commerce, health care, brand management–that train students to apply theory to the workplace. Because so many business deals and legal cases of all kinds now cross borders, law schools are routinely exposing students to international law. Library schools are preparing students for high-paying jobs in business intelligence, computer network design, and software development. Even the most sought-after bachelor-degreed engineers eventually need continuing education, and they typically need a master's degree to advance into management. So engineering schools are launching distance programs that students can take part time over the Internet. Employers often foot the bill.

Indeed, it's now possible for the happily employed to pursue a distance degree in any number of disciplines. Some universities offer part-time M.B.A. programs online; the first virtual law school, Kaplan Educational Centers' unaccredited Concord University School of Law, was launched last fall. For-profit graduate schools, like the University of Phoenix and the entirely virtual Walden University, based in Minneapolis, cater to ''consumers'' interested in career advancement. Enrollment in Walden's five Ph.D. and two master's programs has grown about 60 percent since 1995, to 1,300 students.

With educational opportunities evolving so rapidly, the choice of a graduate program requires introspection and considerable research. Even people entering medicine or law, whose need for a degree is obvious, face new decisions about what studies to undertake to enhance their careers. Some 20 percent of the nation's medical schools now sponsor dual M.D./M.B.A. programs, for example, nearly twice the number that existed in 1995-96. These programs prepare doctors to become involved in hospital or HMO management, or to create their own health care companies. Many law schools have dual-degree options as well, and a growing number offer certificate programs in specialty areas like alternative dispute resolution.

Pay. One force that propels many people into graduate school is the desire for a fatter paycheck. According to the Census Bureau, doctors, lawyers, and people with M.B.A. degrees earned an average of $95,148 in 1998, more than twice the $40,478 earned by workers with only a bachelor's degree. Someone with a doctorate brought home $77,445, on average; someone with a master's, $51,183. These differences add up over a 40-year career: The average Ph.D. will earn some $3 million, compared with $1.6 million for someone with a bachelor's.

The numbers are compelling, and certain professions clearly pay more handsomely than others. But researchers caution that an unknown portion of the income differential between those with a master's or Ph.D. and those with a bachelor's degree is explained by personality, talent, and competence–and that an advanced degree won't automatically make up for a lack in those areas. ''Scholars have studied the connection [between education and income] for years, and the conclusions are usually ambiguous,'' says Annette Watters, the assistant director of the Center for Business and Economic Research at the University of Alabama, who has researched the issue. Because people who go on to graduate school are often more driven and more gifted than the average college graduate, ''if you sent them on an around-the-world cruise for the next few years instead [of graduate school], you might find similar income gains,'' says Robert Reischauer, a senior fellow at the Brookings Institution in Washington, D.C.

Prospective students thus need to assess both their abilities and the dynamics of the job market that interests them for clues about whether immediate schooling will pay off and which type of program confers the greatest advantages. According to Daniel Turner, president of the American Society of Civil Engineers, a master's degree might mean a 10 percent higher salary for a beginning engineer–but the income lost during graduate school might not be recouped until 10 years out. An aspiring science or English professor weighing the worth of a doctoral degree would want to consider that fewer than half of today's Ph.D. candidates will find full-time, tenure-track professorships; many will string together several adjunct positions instead, earning less than they could teaching high school. Given the odds, he or she might decide to forgo graduate school altogether or opt for a Ph.D. program that prepares its students for alternative careers. Because of their proven ability to work independently and to solve complex problems, chemistry or physics Ph.D.'s are now regularly recruited to work in investment banking and management consulting; biologists are sought out by drug or biotech companies; English grads find opportunities in publishing. Meanwhile, demand remains so great for newly credentialed M.B.A.'s that each commonly fields several offers and many get a signing bonus.

Experts and experienced students also caution new college grads against going immediately on to school as a default move, without clear goals and the commitment to reach them. ''I wrote a personal mission statement before I started,'' says Seoni Llanes, who is in her fourth year of the six-year clinical psychology program at Chicago Medical School in North Chicago, Ill. She averaged about 80 hours per week of class, lab, field work, and study time during her first two years and might not have persevered had she not been sure of her purpose at the outset.

Heidie Joo also had clear goals. She recognized as an undergraduate watching the riots in Los Angeles that she wanted to work with underserved populations in an urban area. After two years of economics, statistics, and policy analysis at Harvard, where she earned a master's in public policy in 1996, Joo felt thoroughly prepared for her job doing fund-raising and project management at the Corporation for Supportive Housing, a New York-based organization that assists nonprofits serving people who have been homeless. By contrast, Bill Thompson, a management trainee at Enterprise Rent-A-Car in Diamond Bar, Calif., thinks his soon-to-be completed master's in public policy raised suspicions when he pursued his job in business. Thompson sensed that the Enterprise interviewer was concerned that he would move on when an opportunity came along in his field.

Good choice. As the ballooning population of older students suggests, there's no need to feel compelled to continue your schooling right away. ''I had a false notion that things are fleeting when you're in your 20s, but the opportunity to go to graduate school most definitely is not,'' says Daniel Pink, who started law school when he was 23, graduated from Yale in 1991, has never practiced law, and doesn't expect to. After several years as a political-campaign operative and a speechwriter for Robert Reich and Al Gore, Pink is writing a book called Free Agent Nation about people like himself who prefer a career of moving from project to project. Knowing what he knows now, he probably wouldn't have chosen law school–although he's not unhappy he did. ''That's where I met my wife,'' he says. ''In that sense, it was the most valuable thing I've ever done.''

Ron Lieber is a senior writer at Fast Company and author of Upstart Start-Ups, a book about young entrepreneurs.