Opportunity Costs

One of the things that’s most struck me since coming to Denmark is not anything about Denmark per se or Aarhus per se or my job per se, but the reality of no longer being in graduate school. Having finished the PhD, I’m now in the so-called “real world” where, among other things, I’ve become exposed to the realities of opportunity costs.

These are, for the non-economists in the audience, the costs associated with foregone opportunities. Specifically, taking a higher education generally involves paying money or, in the case of the PhD not really making money, in order to obtain some benefit. Thus, opportunity costs are paid in the difference between my real earnings over the past four-and-a-half years and the counterfactual world where I got rich and famous as a software engineer, investment banker, or something glamorous like that.

While I was always aware of opportunity costs, they become very tangible once you enter the “real world,” where the difference between my previous life (~50-60 hour work weeks at approximately poverty wages, or less if you consider poverty entailing working 40 hours per week) and my current life (37 hour work week and not poverty wages) are both salient within a short period of time.

This therefore raises the question implicit to all considerations of opportunity costs: was it all worth it? This is a difficult question to answer because I don’t know exactly what I would have done otherwise; I decided in my second year of undergraduate that I wanted to pursue a PhD rather than being an attorney. Had I gone to law school, I’m confident I would be hating my life and that those opportunity costs would have been substantial due to there being a glut of lawyers in a world with little demand for them. There is also the fact that transitioning from graduate school to post-graduate school life was nearly financially impossible. The stipend NU paid me for four-and-a-half years was just enough to support my existence, but not enough to meaningfully save anything for such unexpected events as a transatlantic move. Indeed, having saved money from working a nearly full-time job through much of my undergraduate degree, I think I lost money attending graduate school. It is only for the luck of certain circumstances (and NU’s willingness to pay me an extra month’s salary after I technically graduated) that this move wasn’t entirely floated on credit cards.

So, that leaves me in the position of being with the love of my life, in a wonderfully foreign place, with an almost completely stress-free job, doing whatever I want with most of my time. Was it worth it? I think so. But, I suppose, only time will tell.

-Thomas

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