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What are reasons people go to grad school instead of entering the workforce?
I think a lot of people choose grad school - particularly professional school like law, business, etc., because they don't know what they really want to do. It defers decisions, and sounds somewhat prestigious to say "I'm going to law school".
Of course, if you're passionate about the law, business, etc., that could be a great idea! But for many, a little real world experience will be incredibly valuable.
I had been accepted to a Ph.D. Economics program at Princeton when I went to work for Stanford Research Institute as a grunt level data analyst. 35 years later, I've had a fascinating career (which included business school, btw), and am so happy I didn't go the Ph.D. route.
It really depends on who you are and what you want to.
For instance, some graduate schools don't accept students right out of undergrad, they want them to have "life experience" (basically experience working at a job where you are unappreciated so that you'll be more motivated to stay in school).
Others go right to grad school so they can get a certain job or a better paying job, as was mentioned earlier.
Some people try their hand in the working world, decide it's not for them, and return to school to train for something else.