Does it pay off to Complete a Doctorate? The Moderating Role of Employment Status

According to human capital theory, educational level should be rewarded by the labor market. Hence, a completed doctorate should translate into higher income. This relationship between a completed doctorate and income should be more pronounced in the case of self-employment, because especially in this group the doctorate serves as a signal of an extraordinary professional qualification. The hypotheses were tested against a sample of 183 former scholarship recipients, who finished their academic education and were either employed full-time or self-employed. Results for the entire sample suggest that a completed doctorate has no effect on income. This is put into a new perspective by the confirmed impact of a doctorate on income for self-employed participants. We discuss this result with respect to the specific sample analyzed (former scholarship holders), labor market regulation issues, and from both a human capital and a signaling perspective of educational credentials.