Guest blogger, Oliver Yao, Associate Dean for the College of Business Graduate Programs, shares his insight into why pursuing a Masters degree can give you an advantage and keep your skills relevant in a technology driven economy.
Technology Revolution
We cannot live without technology nowadays. Technology is everywhere. From shopping on Amazon.com, to watching movies on Netflix, to socializing on Facebook or LinkedIn, to talking to doctors via telemedicine, and to taking a nap in a self-driving Tesla, we are surrounded by many forms of cool technologies. Our life is better, greater and happier because of it. Agree with it or not, over the past decades, a technology revolution has taken place.
The technology revolution has not only changed our life for the better but also triggered a profound impact on the labor market. A consensus out there is that technologies are replacing human labor. Just to quote some industry statistics, it is estimated that an additional 36 million U.S. jobs will be disrupted, as they could soon be performed by machines equipped with current technologies,[1] and one more robot per thousand workers reduces the employment-to-population ratio by about 0.18-0.34% and wages by 0.25-0.50% (Acemoglu and Restrepo 2020).[2] I won’t belabor the point with more statistics. Do a google search yourself, you will find even more alarming statistics.
Technology vs education
For decades, a college degree was considered a path to “golden bowl jobs.” The college degree signals intelligence and competency – traits that are difficult to substitute. In fact, the advancement in technology induces the demand for the jobs requiring college degrees. When I say “for decades,” it sounds like a long time ago. Whatever was true a few decades ago may no longer be true today. With rapid developments in technology, is it still the case that college degrees enable “golden bowl jobs” that are hard to be replaced by technologies? Most likely not. With that question in mind, along with three wonderful co-authors, I conducted research on this topic and tried to figure out whether technology and human labor of different educational levels are complements or substitutes. We used industry-level data from 1998-2013 to examine the technology-labor relationship by using a combination of AES (Allen Elasticities of Substitution) and MES (Morishima Elasticities of Substitution) based on a flexible functional form.
I will spare you all the technical jargon, and get right to the point. I was surprised by the findings. We found that technology complements high-education labor (master’s degree or above), substitutes for low-education labor (high school degree or below), and, contrary to our common belief, also substitutes for middle-education labor (bachelor’s or associate’s degree). In other words, the jobs with college degrees have become susceptible to technology displacement, while the jobs with graduate degrees are still robust.
Graduate education may be the answer
Our data was collected from 1998-2013. I can only imagine that the effect is even deeper today. The implications may be too late for someone later in their career like me, but are highly relevant to those currently in college. If a college degree is no longer sufficient in fending off the technology invasion, what should our college students do today? Our research tosses up the question and also offers an answer. Graduate education is an effective defense to technology displacement. College students should consider pursuing a graduate degree as their defensive strategy.
1 year graduate programs
The question for college students is when they should start their graduate studies. From the portfolio of graduate programs I work with, I see substantial value for the 1-year specialty master’s programs such as the MS in Financial Engineering, MS in Applied Economics, MS in Accounting & Information Analysis; and the MS in Management. With these 1-year specialty master programs, our college students can start their graduate studies immediately after their undergraduate college graduation and finish in a short 10-month period of time. The advantages are twofold. First, there is continuity. The mindset at school and studying is different from that at work and working. Once someone has started working, it is often difficult to return to being a full-time student. Both the setup cost for a college life and the opportunity cost for giving up a job are high. Second, with a graduate degree in an area that is carefully chosen to complement the undergraduate degree, it may give students a “1+1>2” effect in jump-starting their careers.
Masters in Management
Let me use our MS in Management program (M2) as an example to illustrate my points above. M2 is a 10 month, cohort-based program specially designed for recent college graduates in liberal arts or STEM field degrees with a complementary curriculum. For the STEM or liberal arts students, they may augment their technical background or broad-based education with business acumen and fundamentals, which widens their career choices, making them more attractive to employers and preparing them early on for future leadership roles within the company. We have been running the program for 6 years and the outcomes, judged by our students’ job placements, are a success. Last year 100% of our graduates were successful in their post-graduation plans with 89% who found jobs with a mean salary of $69,000 within 3 months of graduation, while the remaining 11% continued their education at highly selective law and dental schools. Admittedly, we may have some challenging headwinds this year due to the COVID-19 pandemic-induced recession, but we remain very optimistic as our students are well prepared to take up the challenge.
For Lehigh students, the M2 program offers qualified students scholarships equivalent to 50% of the tuition costs. So, if a graduate degree is a must to fend off invading robots, why wait?
[2] Acemoglu D. and Restrepo P. (2020) Robots and jobs: Evidence from US labor markets. Journal of Political Economy, forthcoming.