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It's not as simple as who tends to what, like the difference between a goatherd and shepherd. Both kinds of professionals treat people with problems that vary widely by degree and type, from mild anxiety to schizophrenia. Both can practice psychotherapy, and both can do research.
The short answer is, psychiatrists are medical doctors and psychologists are not. The suffix "-iatry" means "medical treatment," and "-logy" means "science" or "theory." So psychiatry is the medical treatment of the psyche, and psychology is the science of the psyche.
Psychiatrists begin their careers in medical school. After earning their MD, they go on to four years of residency training in mental health, typically at a hospital's psychiatric department.
According to Marcia Goin, MD, past-president of the American Psychiatric Association and a clinical professor of psychiatry at the University of Southern California, psychiatric residencies include a range of subspecialized training, such as working with children and adolescents.
After completing their residency, these physicians can be licensed to practice psychiatry.
Psychologists go through five to seven years of academic graduate study, culminating in a doctorate degree. They may hold a PhD or a PsyD. Those who are mainly interested in clinical psychology -- treating patients as opposed to focusing on research -- may pursue a PsyD.
Licensing requirements for psychologists vary from state to state, but at least a one- or two-year internship is required to apply for a license to practice psychology.
As medical doctors, psychiatrists can do what most psychologists in the United States cannot: They can prescribe drugs.
Recently the state of Louisiana allowed psychologists to write prescriptions after consulting with a psychiatrist, joining the state of New Mexico, which allowed psychologists to begin prescribing in 2002.
A common misconception about psychiatrists is that they only treat people with severe mental illness, like schizophrenia or bipolar disorder, diseases for which medication is the mainstay of treatment, leaving psychotherapy to psychologists and patients with less severe problems.