The rate of return to a pharmacy education investment in the U.S

Abstract

Background: Potential pharmacy students need a financial frame of reference to compare alternative fields of study or even determine if studying is financially worthwhile.

Objective: Estimate the rate of return to a pharmacy education investment in the U.S.

Methods: A model is used to estimate the rate of return to a pharmacy education. It is formulated using exclusively present values (i.e., dollars at 2019 prices). Several assumptions are made regarding the individual getting the education, the costs incurred, the amount borrowed, and the benefits derived. The robustness of the model is tested using sensitivity analysis and the rate of return is recalculated each time.

Results: The estimated real rate of return to a pharmacy education investment in the U.S., devoid of inflation and under the assumptions initially postulated in the model, is 4.89%. The nominal rate of return is 6.44%. Post-estimation sensitivity analysis shows that the real rate of return is relatively inelastic with respect to changes in eight inputs considered, thus indicating robustness in the results of the model.

Conclusions: The real rate of return estimated here establishes pharmacy as a financially viable occupation for young individuals possessing the aptitude and commitment to pursue a patient-centered career in medication management.

Keywords: Education; Human-capital investment; Pharmacist workforce; Rate of return; Wages and salaries.