The Opportunity Cost of Peace Corps–Salary


Peace Corps applicants, current Peace Corps volunteers and even the people who thought about applying or serving but never did all share one same thought: what have I given/will I give up by choosing Peace Corps? It’s a big commitment, two years in shitty conditions while ‘living like the locals’.

It sound like a pay cut, and in real dollars it is: I make roughly $320/month or $3,840 a year. Not that much for a job in America, right? But let’s look at it another way. In addition to that, I receive $24 ‘Leave Allowance’ and an additional $2.57 for mailing a letter for World Wide Schools. Beyond these, I’m comp-ed a readjustment allowance of $275 per month that is available at the end of my service. On top of that, I receive 10% off of my federal student loans for each year of service.


1 month

1 year

2 years

Living allowance




Readjustment Allowance




Student Loan Reduction




Leave Allowance




World Wide Schools




Net Benefit





Alright, making under $10,000/year is still not too impressive. In other terms, it’s as if I make $763.75 a month or roughly $4.77/hour for a 40 hour work week. Actually, I guess it kind of sucks. But then again I’m don’t live like I make $4.77 an hour -

For the month, I pay roughly $90 for my room or 28% of my income - including utilities, use of laundry facilities, AND most meals (20-25 days a month). I put the same amount in savings every month before I spend it. The rest of the month, I maybe have to pay for hostel rooms for 2-5 nights, nights and meals in the capital city, transport to annexes, office supplies, etc. The only thing I take a hit on is the World Wide Schools, as I’m doing a pen pal exchange and the letters cost around $20 to mail each month. At the end of the month, I’ll have another $30 left over (9%) on top of my savings. I always say if I’m broke at the end of the month, I pissed it away. My overhead is low; I don’t have kids or a wife so my costs are truly minimal. Whole families here in Peru get by on less than what I make. In fact, I make what teachers in my community make.

On top of all this goodness, I have health insurance including an on-call doctor 24/7 and access to the best medical facilities in the country. Medication plus basic health supplies (including sun block) are free! Plus, I’m eligible for fellowships at various grad school programs and I’m eligible for non-competitive status in all government jobs for one year. These benefits aren’t too bad.

But what about the opportunity cost of getting a real job? Beyond arguing that Peace Corps helps the resume with entry level jobs and grad school, let’s look at how my friends, who were in the same graduating class, are faring. We can assume that more or less we have the same skill set and the same degree. My friends are either in graduate school, employed by the government, or underemployed. The employed by the government group includes the US Navy, as well as AmeriCorps and Teach for America and me. The underemployed are waiters and temporary workers.

It’s hard to get your foot in the door with less and less entry level positions and more and more recent graduates. Simply by looking at this simple analysis, the Peace Corps doesn’t exactly look like a bad bargain. Of course, if you’re not into living outside of America for two years, living in what could be (but may not be) ‘rough’ living conditions and giving up some creature comforts (24/7 internet, digital cable, iPhones, refrigerators), the Peace Corps may not be for you. But given the job market and numerous benefits of jumping on-board, it may be worth seriously considering. 

And then it hit me that this really wasn’t a bad financial move after complaining around tax time to a friend that that I made $3400, he responded that he made the same. In the States.


Sethna said...

Incredibly helpful post. I was really wondering about the financial viability of service. Sounds like I definitely won't be in any danger of my critical needs not being met!

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