@garydpdx: Someone else pointed out that Google and other companies hire people with doctorates...
The only thing I would add here is that -- over the course of my career -- I've obviously met less-able folks who didn't have BScs, Master's, or PhDs -- and I've met some very clever folks who did have BScs, Master's, or PhDs...
BUT ... I've also met folks with PhDs who I wouldn't trust to turn my kitchen light on when it comes to using common sense ... and I've met folks without any sort of academic qualification who can blow me away with regards to knowing "stuff" and actually getting "stuff" done.
Of course having a PhD makes it easier to get some jobs -- but I really appreciate the companies and managers who look at the person in addition to that person's academic qualifications.
If the last thought about the last written row in the table comes in your mind while thinking or deciding about industries or academics, then you should start knocking the doors of industries as academics is not for these kind of persons. Academics is for delivering if you are on acceptance side better you should think of industries.
Max, I completely agree with what you have mentioned in the last para: follow your heart (and wallet) :). After graduating in EE (in 1999) I also asked the same questions to my seniors in the industry and in academia. Mostly I got the answer from a person working in the industry favoring higher studies and got the answer from a person in academia in favor of industry. I was really confused. I wanted to do masters and PhD., but was little more concerned about my wallet and thought of checking industry first. I thought I could always switch over to academia later. After I got into the job and started earning, it was always difficult to make a concrete decision to switch over as I became more and more concerned about wallet.
But, I have stronger feeling that I should have done PhD,,,that was what I wanted. But it is difficult for me now, because I can't leave my job. What I feel is if the heart says "do higher studies", it is better to complete it and then join industry, otherwise it would be difficult later.
I never had the intention of working in academia but decided to get a PhD in EE and I'm glad I did. For jobs developing new technologies it is much easier to get a job if you have a PhD. Other jobs it doesn't matter. I recommend to your graduate to look at the sort of job he wants and see if the people getting hired into those positions have PhDs or not.
Thanks, Bert, for improving my productivity! All I can add is that to get at some of the more advanced development work, it doesn't hurt to have a Master's or even a Ph.D. in some cases (semiconductor process work, for example). Someone else pointed out that Google and other companies hire people with doctorates, such as for the Google[x] team, for some interesting work.
In general, my thinking is that people should get as much formal education as they can afford (in money, but also in effort!!). It becomes invaluable later.
Like Frank said, when you ask people who developed the algorithms for all the complicated gadgets they are designing, it will be those with lots of formal education under their belts. So unless you're happy letting others do all this heavy thinking, the closer you can get to that level, the better. IMO. It gives a better understanding of the underlying concepts, and it invariably gives the designer a better perspective, i.e. a better understanding of what can be done in the universe of possibilities.
The downside is that if you go into industry, you will often not be able to exploit all of this hard-earned knowledge. At least, not all of the time. But in my view, it's never wasted. I've never subscribed to the notion that maximizing one's career earnings is all that matters.