4/5/16: Talent Is a Problem, But so Is Financial Services Model

When it comes to talent, hedge funds tend to hoover highly skilled and human capital-rich candidates like no other sub-sector. Which means that if we are to gauge the flow of talent into the general workforce, it is at the Wall Street, not the Main Street, where we should be taking measure of the top incoming labour pool. And here, Roger, we have, allegedly, a problem.

Take Steven Cohen, a billionaire investor hedge fund manager of Point72 (USD11 billion AUM). The lad is pretty good thermometer for ‘hotness’ of the talent pool because: (a) he employs a load of talented employees in high career impact jobs; (b) he tends to train in-house staff; (3) he operates in highly competitive industry, where a margin of few bad employees can make a big difference; and (4) courtesy of the U.S. regulators, he ONLY has his own skin in the game.

Cohen was speaking this Monday at the Milken Institute Global Conference about how he is "blown away by the lack of talent" of qualified incoming staff, saying that it is ”not easy to find great people. We whittle down the funnel to maybe 2 to 4 percent of the candidates we're interested in… Talent is really thin."

His fund hires only approximately 1/5th of its analysts and fund managers externally, with the balance 4/5ths coming from internal training and promotion channels.

The sentiment Cohen expressed is not new. International Banker recently featured an article by a seasoned Financial Services recruiter, who noted that “…many firms are finding it hard to attract the right candidates—and also failing to comprehend the true cost of finding the “right hire”” (see here: http://internationalbanker.com/finance/financial-services-need-put-culture-centre-organisations/).

Some interesting insights into shifting candidates preferences and attitudes and the mismatch these create between the structure and culture of Financial Services employment can be gleaned from this article: http://chapmancg.com/news/thought-leadership/2015/08/three-way-mirror-global-talent-challenges-in-financial-services. In particular, notable shifts in candidates’ culture with gen-Y entering the workforce are clearly putting pressure on Financial Services business model.

2015 study by Deloitte (see here: http://www2.deloitte.com/global/en/pages/financial-services/articles/gx-talent-in-insurance.html) summed up changes in Generational preferences for jobs in a neat graph:

And the business graduates’ career goals? Why, they are less pinstripes and more hipster:

In simple terms, it is quite unsurprising that Cohen is finding it difficult to attract talent. While supply of graduates might be no smaller in size, it is of different quality in expectations (and thus aptitude). Graduates’ expectations and values have shifted in the direction where majority are simply no longer willing to spend 5 years as junior analysts working 20 hour days 7 days a week in a sector that does pay well, but also faces huge uncertainties in terms of forward career prospects (to see this, read: http://linkis.com/constantcontact.com/9JrQd).

Which means, High Finance is in trouble: its business model does not quite allow for accommodating changing demographic trends in career development preferences. Until, that is, the tech bubble blows, leaving scores of talented but heavily hipsterized graduates no other option but to bite the bullet and settle into one of those 5-years long bootcamps.



NB: Incidentally, recently I was a witness to a bizarre conversation between a graduate and a senior professor. A graduate - heading by her own admission into a Government sector job in international policy insisted that the job requires her to be entrepreneurial, 'almost running [her] own business’. The faculty member supported her assertion and assured that she teaches students how to run their own businesses in courses she provides on... international diplomacy and policy. Not surprisingly, neither one of the two ever ran a business.

The hipster haven ideals of ‘we are all so creative, we can run a business from our college dorms’ run deep. And they are not about the blood and sweat of actually running a business, nor the risk of going into the world penniless and earning nothing for years on end while the business is growing. Instead, entrepreneurship for the young is all about perceived fun of doing so.

There will be tears upon collision with reality.

5/9/2013: IBM: 64% of global CMOs want to approach customers as individuals

Since 2009, IBM Institute for Business Value has been surveying C-level executives around the world to  assess the development of digital economy.

Recently, IBM released some headline numbers for the forthcoming (October) survey for 2013:

• 64% of CMOs want to approach customers as individuals
• 71% of CIOs see communication moving towards more social/digital collaboration
• Majority (55%) of CHROs foresee increasing organisational openness
• Just 34% of organisations have an in-depth understanding of their customers
• But 78% expect their organisations to have an in-depth understanding of their customers by 2017
• Only 1 in 5 organisations has the capacity to use Big Data with just 40% intergating internal and external data sources, just 18% using Big Data to identify new products and services
• 77% of all CFOs support products and services innovation

Handy info graphic (you can click on it to enlarge):

13/4/2013: Human Capital & Economic Development - a fascinating study

A fascinating paper, published in The Quarterly Journal of Economics (2013), 105–164, titled "Human Capital and Regional Development" by Nicola Gennaioli, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer (see also NBER Working Paper No. 17158, September 2011 or in final version at http://scholar.harvard.edu/files/shleifer/files/human_capital_qje_final.pdf) looked at "the determinants of regional development" across "1569 sub-national regions from 110 countries covering 74 percent of the world’s surface and 96 percent of its GDP."

The authors "combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions." In addition, the study also extends a standard model of regional development to include a "model of the allocation of talent between entrepreneurship and work", and a "model of human capital externalities".

Top line conclusion: "The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data."

More specifically:

• In the paper, human capital as measured by education attainment "emerges as the most consistently important determinant of both regional income and productivity of regional establishments.
• "…Some of the key channels through which human capital operates, includ[e] education of workers, education of entrepreneurs/managers, and externalities." 
• The authors omit other forms of human capital (e.g. creative capacity, innovation capacity, various measures of aptitude, etc), which implies that the results of the study error on cautious side when it comes to determining the full extent of the effects of human capital on economic development.
• The authors also omit from consideration "the role of human capital in shaping the adoption of new technologies. Starting with Nelson and Phelps (1966), economists have argued that human capital accelerates the adoption of new technologies." This once more implies that the numerical estimates provided by the authors error on the side of underestimating the true effects of human capital on economic development.
• The authors "do not find that culture, as measured by ethnic heterogeneity or trust, explains regional differences."
• The paper shows no effect of "institutions as measured by survey assessments of the business environment in the Enterprise Surveys" on helping to "account for cross-regional differences within a country."  
• The two points above are important for us in Ireland - and indeed in all Small Open Economies within the EU27 - because, given the extent of labour mobility and markets integration within the EU27, we are closer, on a comparative basis, to being a regional economy, rather than a separate country-level economy.
• "In contrast, differences in educational attainment account for a large share of the regional income differences within a country. The within country R2 in the univariate regression of the log of per capita income on the log of education is about 25 percent; this R2 is not higher than 8 percent for any other variable."
• Acemoglu, D, & M. Dell (2010) paper “Productivity Differences Between & Within Countries” (published in American Economic Journal, 2(1):169-188) examined "sub-national data from North and South America to disentangle the roles of education and institutions in accounting for development. The authors find that about half of the within-country variation in levels of income is accounted for by education." 
• The study also shows that "focusing [in the analysis of the role human capital plays in economic development] on worker education alone [absent separate consideration of entrepreneurial human capital] substantially underestimates both private and social returns to education. Private returns are very high but to a substantial extent are earned by entrepreneurs, and hence might appear as profits rather than wages…  …the evidence points to a large influence of entrepreneurial human capital, and perhaps of human capital externalities, on productivity."
• Key numerical finding is that "education explains 58% of between country variation of per capita income, and 38% of within country variation of per capita income."
• "Turning to institutions, some of the variables, such as access to finance or the number of days it takes to file a tax return, explain a considerable share of cross-country variation, …but none explains more than 2 percent of within country variation of per capita incomes. Indicators of infrastructure or other public good provision do slightly better: on their own many explain a large share of between country variation, while density of power lines and travel time account for up to 7% of within country variation. These variables are obviously highly endogenous, and still do much worse than education."
• The last two points summarised in the table below:

26/7/2012: Soft Skills - Survey of Evidence

A superb survey of the literature on soft skills (major component of human capital) published by IZA (DP No. 6580 May 2012) and written by my old prof: James J. Heckman and Tim Kautz, titled "Hard Evidence on Soft Skills". H/T to Professor Liam Delaney for spotting the paper.

The paper summarizes recent evidence on 

• what achievement tests measure; 
• how achievement tests relate to other measures of “cognitive ability” like IQ and grades; 
• the important skills that achievement tests miss or mismeasure, and 
• how much these skills matter in life. 

Core conclusions are: 

• Achievement tests miss, or perhaps more accurately, do not adequately capture, soft skills – personality traits, goals, motivations, and preferences that are valued in the labor market, in school, and in many other domains. Incidentally, this is straight confirmation of the Nozickian bais (see here).
• Ssoft skills predict success in life, causally produce that success, and 
• Programs that enhance soft skills have an important place in an effective portfolio of public policies

Awesome to see this work summarized.

08/12/2011: An even greater threat

Here's an even greater threat to Ireland's 'economic model' - the one based on attempting to attract into this country a new generation of FDI - FDI that is increasingly based on human capital-intensive activities.

BBC report here covers increasing mobility of skills across the borders (link). And I co-authored recently a report on this (here).

But Ireland, folks, is not a serious contender for this capital due to the confluence of the following trends here and abroad:

1. Our taxes on top earnings - earnings associated with higher human capital, once we remove the egregiously high salaries at the top of the public sector bureaucracies and in sheltered private/semi-state sectors;
2. Our quality of public services that can be meaningfully utilized by people with higher human capital is not up to scratch - in health, education, transport, urban amenities, cultural amenities and Government services;
3. Our quality of promotional opportunities within the country is restricted, especially for foreign talent due to archaic promotion practices and cronyism; and
4. Our quality of public discourse, when it comes to higher earners is toxic - in part justified by absurdities of our top public sector brass who enjoy earnings well in excess of their talents, and in part justified by our absurd 'bankers' whose performance in the past is also unmatched to their earnings.

So we are witnessing an outflow of key talent from Ireland. In recent months a large number of high quality academic researchers have packed up and left (or currently leaving) this country. In a number of sectors - including the 'flagship' ICT services sector - we are seeing jobs moving after key workers (not key executives, as our Government mistakenly thinks, judging by the special measures in the Budget 2012, but key skills-holders). In a number of sectors, we are failing to develop critical mass of skills and activities due to lack of talent - one example would be funds management in IFSC, the area where policymakers have been trying to build activity for some 5 years now.

Now, we might think that these issues should be priority number 734 or so on the list, given the gravity of our crisis, but they are not. Long term competitiveness no longer rests on simplified harmonized indicators for brawn labour, but on yet-to-be-compiled indicators of our human capital pool. And here, mass-produced degrees with plausible-sounding names of poorly ranked institutions on them won't do the job. Ireland is facing two roads ahead: one road leads to a low wage, low income autarky of skills, another to a high wage, high income open skills economy. So far, our policy wheels are pointed firmly in the direction of the former.

Economics 19/9/10: What's human capital got to do with our policies?

Having spent last week giving three presentations in Ireland on our IBV paper (link here) concerning the role of human capital in urban and regional development, and having spent a week before given another five presentations/briefings on the same topic in Russia, I should probably take a break from the topic.

So here is a quick note: I finally came about to read an interesting study from McKinsey & Co on the importance of talent as a driver of competition between firms, published back in February 2008. It is a very insightful piece.

Here's an interesting quote, referring to two McKinsey Quarterly global surveys (emphasis is mine). "The first, in 2006, indicated that the respondents regarded finding talented people as likely to be the single most important managerial preoccupation for the rest of this decade. The second, conducted in November 2007, revealed that nearly half of the respondents expect intensifying competition for talent—and the increasingly global nature of that competition—to have a major effect on their companies over the next five years. No other global trend was considered nearly as significant."

Furthermore, "Three external factors—demographic change, globalization, and the rise of the knowledge worker—are forcing organizations to take talent more seriously."

Amazingly, there is little evidence to-date that policymakers have any idea the process of global competition for talent is underway in their economies. With exception of the US and Switzerland, every OECD economy puts the heaviest burden of taxation onto shoulders of the very same talent for which companies in these countries compete.

Ireland is the case study here. After a decade and a half of aggressively incentivising foreign investment into the country (not a bad thing in my books), Irish leadership has left human capital - and especially internationally mobile human capital - bearing more than 3/4 of the total tax burden in the country. Now, this proportion is rapidly increasing (see chart), having risen from 75.31% in Q2 2007 to 80.42% in Q2 2010.
This process is accelerating per table below:
Unbeknown to our policymakers (it appears), labour, especially skilled labour in the sectors the Government promotes as the future of Ireland Inc (e.g. the 'knowledge' economy) is the largest cost input for firms. Yet, through the crisis, the Government has elected a two-path approach to resolving our fiscal difficulties:

• massive cuts in capital investment, and
• disturbingly high increases in income tax burden and other tax burden on disposable income by households.

Anyone to spot a contradiction here?

Economics 17/9/10: Free markets are good for human capital

World Bank Policy Research Working Paper 5405, titled “Economic Freedom, Human Rights, and the Returns to Human Capital: An Evaluation of the Schultz Hypothesis” by Elizabeth M. King, Claudio E. Montenegro and Peter F. Orazem published in August 2010 is a very insightful read into the role of proper market institutions and rights in economic development. Paper link here.

T.W. Schultz postulated, back in 1975, an important hypothesis for why returns to schooling might vary across different markets. According to Schultz, human capital is most valuable when individual workers face unexpected price, productivity or technology shocks that require managerial decisions to reallocate time and resources.

In other words, in Schultz’s view, human capital acts as a hedge against such uncertainty. If skilled individuals are not exposed to shocks that require resource allocation decisions or if they are denied the freedom to make those decisions, then they will not be able to capture the economic returns from their skills.

It stands as a logic corollary that if a country imposes economic or political institutions that cushion the shocks or hinder individual economic choice, then we should observe lower returns to skill in countries that limit exposure and/or individual responses to uncertainty.

In the case, relevant to Ireland, this logic extends not only to traditional factors, such as:

• Degree of labour force unionization
• Extent of social welfare safety net
• Existence of the minimum wage laws
• Restrictions on mobility into public sector jobs and protected professions jobs
• Structures of pay and promotion divorced from productivity considerations
• Visa restrictions

and other buffers, but also more novel factors such as

• Negative equity
• Housing markets access restrictions (e.g. birth-right to development of homes in some areas)
• Cultural restrictions (e.g. Gaeltacht)
  
• Lack of credit supply, etc

Per World Bank study cited above:

“A cursory inspection of the data yields support for the hypothesis. … [dividing] data from 86 developing countries into three groups based on their relative ranking in the Heritage Foundation’s Economic Freedom Index, with 25% each placed in the least and most free economies and the rest being placed in the middle. … Private returns to schooling for the freest economies average 9.7% per year of schooling, 3 percentage points higher than the average returns in the most restrictive economies. Returns for the middle group fall between the two extreme groups. [The authors] repeat the exercise … for private returns to years of potential experience. Again, average returns are highest in countries rated as the most economically free (5%) versus the middle (4.7%) and least free (4.2%) countries. These results are broadly consistent with the proposition that freer economic institutions raise individual returns to human capital.”

Furthermore:

“T. P. Schultz (1998) found that about 70% of the income inequality in the world is due to country-specific fixed effects that would include the impacts of country-specific political and economic institutions on earnings. Acemoglu and Robinson (2005) argued that these institutions were formed in response to exogenous influences existing at the time of a country’s founding, and that these institutions tend to persist across generations. [World Banks study] use measures of economic and political institutions to determine if they can alter returns to human capital across countries sufficiently to explain some of the persistent cross-country income inequality reported by T. P. Schultz. [The study found] that, consistent with the T.W. Schultz hypothesis, human capital is significantly more valuable in countries with greater economic freedom. Furthermore, the positive effect is observed at all wage quantiles. Economic freedom benefits the most skilled who get higher returns to schooling; but it also benefits the least skilled who get higher returns from experience.”

Now, this has three basic implications for Ireland.

Firstly, the study results show that higher human capital returns (in other words greater incentives to invest in human capital) are associated with less restrictive labour market policies, greater extent of basic human rights protection, more pluralist system of social organization and lesser emphasis on equalization of outcomes in economic environment. In other words, market wins, crony capitalism (Irish model) and socialism (Swedish model) lose.

Secondly, the study also implies that if Ireland were to be focused on developing a viable knowledge economy (aka human capital-intensive economy), the country needs more market, more freedom, less protectionism and lower restrictions in the labour market.

Thirdly, the study suggests that environments with lower tax burden on labour and lower Government/State interference in private activities are more likely to produce better human capital base.

Instead of farcical Mr Top Hat Kapitalist, it looks like free markets and societies benefit Ms Advance Degree Holder.

Economics 24/01/2010: Knowldge Economy and Irish academia

Charles Larkin and Brian Lucey are having a go at the issues clogging up Irish third level policies in Sunday Business Post today.

Here are few takes and my views on them:

“Hardly a week goes by without a government spokesperson discussing an aspect of the "Smart Economy". In the public and perhaps government mind this is equated with technology. We suggest that a truly "Smart Economy" is not based on technology -- the really smart economy is about flexibility, especially mental flexibility. Developing this should be the primary focus of the higher education sector. We suggest that there exist a set of interlinked issues that make the sector as it stands unable to do this.”

Yes – Knowledge Economy is not about quantity of labs / patents / ICT applications etc. It is about our abilities to create new applications and tools, but more importantly – ability to deploy these in profit earning undertakings (I mean, of course, a broader notion of profit that can, should the individual owners of technology and/or skills elect to do so, include pursuit of non-monetary returns).

“Irish higher education suffers from a severe conflict of mission. It is expected to deliver on innovation, education, social enrichment, economic growth, public health, improved lifestyles and put a chicken in every pot. Though research suggests that all of these and more arise from higher education, the effect varies across individuals and disciplines. The context is further complicated by the regional imperative.”

Also spot on – the conflict between objectives of the universities that are political (and this now also includes science policies) and that are academic is best highlighted by the fact that Irish universities are no longer the hot beds of subversive thoughts. Instead, they are staffed and run by bureaucrats with singular mode of thinking – coalescence, assimilation and homogenization of staff to achieve pleasant singularity of view that can then be monetized via Irish and European grants.

Not a single Irish university today would have seen Keynes offering a job to Hayek. Only senior faculty are allowed, and even then – unwillingly – to express dissenting views. Any junior faculty member peeping their head above the grey mass will be thrown out as soon as their contract comes for a renewal. ‘Does not match strategic direction’ on a rejection letter for a job means that the candidate is simply not ‘slottable’ into the Borg collective of some department.

Can anyone expect any sort of creative excellence out of this?

“Academic freedom is perhaps the simplest and yet most profound step. In essence this would involve the granting of "university" (i.e. degree granting) status to all third and fourth level institutions (inclusive of exceptional legal entities, for example the research-orientated facilities, such as the Royal Irish Academy and the Dublin Institute for Advanced Studies). The announcement by Minister O'Keeffe that he is to abolish the NUI is a first, faltering step towards this... Care needs to be taken that we do not replicate the failures of the UK and Australia in similar reforms. Within the IOT sector new programmes go through a very rigorous evaluation. The issue is that existing programmes need root and branch reform to ensure that they are at the same quality and intellectual standard. With freedom comes responsibility, and the most important responsibility will be to offer educational programmes aligned with the fostering of flexible minds.”

I fully agree – which probably means the authors are now at a risk of being branded ‘extreme’ in their views – freedom must be given to universities and all third level institutions, and they must be self-accountable for their actions. If one chooses to pursue EU and Irish academic handouts through so-called ‘collaborative’ piggy-back-riding on other EU researchers grants, so be it. They will sink in the long run, having reduced themselves to the backwater of unoriginality in thinking and output. If other universities chose to take a bolder position and once again become centres for debate, discussion, challenge and search (breaking away from their current tradition of serving as yes-men to the social regime of singular ideological hue) – they will thrive in the long term as their creativity will allow them to command a premium. The same premium the relative start ups of Stanford, UofChicago, University of California campuses, and so on – having arrived to the university game in the US well after the Ivy League institutions – now command over the majority of previously mighty, now completely mediocre Ivy League institutions.

Last night, RTE was showing the documentary about the Bog Bodies discoveries. In the entire lengthy feature, there was not a single point at which the documentary managed to show any disagreements between numerous Irish and international researchers. Instead, it was a saccharine, sonorous and harmonious blandness of: ‘Yes, I agree with my colleague on this point’ and ‘We all agree with our colleagues on all points’. I am certain that there were probably different views discussed by scientists amongst themselves. But the telling feature of the documentary was just how important consensus is to science’s image in the public. And this is frightening. Not a single major breakthrough discovery in science was delivered by consensual group-think of collaborative researchers.

Back to Brian and Charles’ essay:

“Freedom should be extended to faculty wages. At present, within narrow bands, the best are paid the same as the worst, the most active the same as the least. …Evidence from the US indicates that salary freedom can assist in incentivising staff, but this can arise at the cost of over-reliance on casual and adjunct lecturers at the undergraduate level. …we need to ensure that in the newly freed institutions a motto of "every scholar a teacher, every teacher a scholar" is taken just as seriously.”

I am not sure about the ‘over-reliance on casual and adjunct lecturers’. In my view, and a disclosure is due here – I am adjunct myself, adjunct lecturers are usually self-selected individuals with passion for teaching and with different sets of skills from other researchers and academics. If selected on merit, they can add serious diversity of thought and experiences to the universities. They are also key to linking universities to the real world. What is really sad about Irish universities is that casual lecturers are often selected for a single shot teaching, filling in for absent full time faculty. There is neither coherence, nor open-mindedness as to how adjuncts are selected, appointed and contractually hired.

“Freedom must also of course mean freedom to fail. If a university were unable to deliver on the required educational outcomes then it ultimately would be required to fold or to be subsumed by another more successful university and mechanisms need to be put in place to deal with the fall-out if this happens.”

This really needs no qualification. Superb! I lamented on many occasions the lack of consolidation and closure in the process by which universities that thrive can gain market shares.

“We suggested earlier that a truly smart economy involves the production of flexible thinkers. Such an education must be more than purely discipline-focused at the third level. …We can broadly consider three domains of intellectual activity in universities- humanities, letters and the social sciences (arts), life sciences and natural sciences. Mapping degrees to one of these we suggest that a true university education would involve an annual minimum of 15 per cent engagement with each domain.”

Very well put. Again, on many occasions I raised this concern that we are not producing flexible, creative thinkers, but are focused on producing standardized degree-holders. Like a commodity product, these degree holders are then released into the real world where they go on to form a mass of uncreative, unchallenged and unproductive middle managers and functionaries. The future of Ireland Inc rests with people who can deploy creative and innovative thinking in management (not necessarily in the labs alone, but at all stages of production, marketing, delivery, sales etc). This is what I would call a real ‘knowledge-based’ economy. It is good to see that at least two of my colleagues are now publicly in agreement.

“To adequately provide these postgraduate courses all academic staff in the university would be required to be active researchers, which would be achieved by a rolling tenure system. This would involve the granting of tenure for a prospective 5-7 year period, with biannual reviews.”

Spot on!

“Research activity and research quality are only loosely related but quality requires activity as a prerequisite. To ensure quality of teaching we suggest that again there be biannual reviews of teaching based on best modern practice. This would involve some element of student feedback but would also involve reflective portfolios and classroom observation. To oversee this quality issue we suggest a single evaluation unit within the above suggested ministry.”

Sadly, although I agree with the idea of a review, I am not yet ready to place my trust in Ministry bureaucrats to deliver on such an objective. Fas experience shows that our public officials cannot be entrusted to do this job in an impartial, efficient and effective manner. I would rather suggest use of class numbers, relative to faculty averages, as a partial metric for academic wages. Taken, of course, over a period of time and within comparable disciplines. Students tend to vote with their feet.

“A third element relates to funding. …Separating undergraduate from postgraduate education we suggest allows greater clarity to emerge. Persons seeking to take masters or doctoral qualifications in an area do so for one of two reasons -- a desire to seek entry to an area or profession (investment) or from a personal interest (consumption). There is no obvious reason why the government should fund the latter over other consumptions. In any case the operation of the tax/PRSI system should, in most circumstances, offer a return to society partly via the increased taxable earnings that the better qualified persons achieve, thus capturing the public good element of an increase in, for example, dentists, or telecommunication engineers, or doctors of literature.”

I actually disagree. PRSI and income tax place a surplus taxation burden on individual investment. If a person invests their own funds in education, they should be able to deduct the cost of this investment before they pay tax on capital gains. Secondly, if the society at large already benefits from the social good nature of higher education, then a person having invested in it for private benefit must be reimbursed for society benefit accruing not to themselves, but to others. After all, if my money paid for my PhD and I get a return of x% per annum, while the society gets y% per annum and a tax return on my PhD – is this not a case of double taxation?

This means that, while I fully agree that the state should not provide funding – except that based on merit and inability to pay considerations – for post-graduate studies, I disagree that PRSI/income tax should be viewed as fully functional means for capturing individual gains.