It´s The Salaries, Stupid!
The problem comes when you notice the salaries on offer. If you get the privilege of being selected by such august institution, you could end up making no more than 30,000-40,000 sterling a year.
Now, more than five years ago a 21-yr old analyst that joined a top ibank through the milkround was expected to make at least double that in his first twelve months. A 28-yr old chap fresh out of an MBA was more or less guaranteed three times the amount currently promised by Judge.
The conclusion, then, is that Judge seems to be offering less-than-glorious monetary enticements (in spite of this, I am sure that they get hundreds of applicants for each available position). And this is quite possibly a good reflection of the academic reality in both England and Europe as a whole. Bright young things don´t have lots of incentives to pursue a lengthy PhD and land an academic post. The financial opportunity costs for those skillful enough to join a hedge fund or an ibank would just be too grave.
No wonder, then, that the US is way ahead when it comes to the academic league tables. Profs across the Atlantic, of course, make much more money, particularly those inside b-schools. A freshly-minted PhD in Finance that is hired by a, say, top-25 school should expect at least $150,000 the first year. Soon, he could be racking up hundreds of thousands of dollars from executive courses, consulting and book deals. Some profs in the States are rumoured to make seven figures overall.
What this means is that the academic path becomes attractive, even for those who could make it big on the Street. Life at a US b-school can be pretty cool. If you join a place like Cornell or Dartmouth you are basically living in your own country club. Facilities are top-notch even at a top-100 school, and students are normally high caliber. Given these circumstances, it wouldn´t be unreasonable to give up fame and fortune in the real-world. On an expected return basis, a US b-school academic is probably in the top 5% of the population (remember, today´s masters of the universe can be tomorrow´s pariahs). Not a bad proposition, ain´t it?.
Unless places like Cambridge start to pay better, US schools will not be caught up. Having dinner at High Table is certainly a nice perk, but possibly not one worth hundreds of thousands of dollars in foregone earnings.
