MBAs With The Highest First-Year ROI



MBA Programs with the Highest First Year ROI

Looking to get rich quick after graduation? Don’t go to Wharton, Stanford or Kellogg…Go to HEC Paris  (or the University of Pittsburgh’s Katz Graduate School of Business), instead.

That’s the lesson from a new study produced by The Economist, which examined an MBA’s first-year return on investment. Using a formula that pitted average first-year salaries against tuition and lost earnings, The Economist pinpointed the programs that offered the best value early in graduates’ careers.

Not surprisingly, the top performers were moderately-priced international schools with shorter curriculums that drew students earning modest incomes. For example, French powerhouse HEC Paris topped the list, with a 66.5% ROI. Here, students gave up $49,788 in salary to participate in the program’s 16-month curriculum. Along with its reasonable $61,709 price tag, students graduated into positions paying $123,694, more than tripling their previous salary. If you factor out tuition, HEC Paris grads will make more in one year than they would’ve in three years if they hadn’t enrolled. Talk about an admissions pitch!

The United Kingdom’s Aston Business School finished second to HEC Paris, boasting a 64.5% ROI after one year. Rounding out the top five were the University of Hong Kong  (60.2%), Italy’s SDA Bocconi (55.5%), and the International University of Japan (52.4%).

So how did North American institutions fare? Not so well. Canada’s Schulich School of Business at York University actually finished sixth, with a 52% return. In the United States, however, the aforementioned University of Pittsburgh (Katz) ranked 19th, with a 41.9% return. Other American programs with respectable showings include: The University of Minnesota (Carlson) (33.6%), Notre Dame (Mendoza) (32.8%), Arizona State (Carey) (31.9%), Emory University (Goizueta) (27.4%), and Rice University (Jones) (27.0%).

And how do the American big shots rank on early ROI? Well, you can bet these numbers aren’t part of the admissions brochures:  Wharton (6.3%), Kellogg (9.8%), Columbia (13.0%), Stanford (13.5%), and Harvard (14.8%).

Why is that? For starters, American institutions, generally, offer two-year programs, which nearly double their price tags against other institutions, particularly in Europe.  What’s more, The Economist points out that American programs like Wharton tend to enroll executives who are already “well-paid.” As a result, they tend to land jobs just a few notches above the ones they left.” Despite this, The Economist notes that “Wharton alumni are more likely to top the greasy pole in the long run.”

Despite having the lowest first year ROI, Wharton leads the way in total cost, with tuition and fees of $129,656 and lost earnings of $200,040 (against post-MBA pay of $120,702). Stanford University, Northwestern (Kellogg), MIT (Sloan), and Columbia University also made the top five in the most expensive list.

Wharton also topped the list when it comes to the average compensation that students give up to enroll in their program ($200,040). Stanford and Kellogg students also made big sacrifices, foregoing $178,694 and $176,998, respectively.

Highest tuition? Again, Wharton leads the pack (notice a theme here?). Their program tuition and fees stand at $129,656 according to The Economist. Surprisingly, MIT (Sloan) and Rochester University (Simon) trail closely behind at $122,800 and $121,138, respectively.

When it comes to post-MBA salaries, Wharton only finishes eighth, with Australia’s Queensland Business School ($155,482) and Macquarie Graduate School of Management ($152,256) taking top honors. The third and fourth slots are filled by the Swiss: The University of St. Gallen ($135,675) and IMD ($131,566). Among American schools, the top average earners are Stanford ($129,652), Harvard ($124,085) and Wharton ($120,702).

To check out early ROI at the top American institutions, check on the table on the next page. To access full list, click on The Economist link below.

  • MBA_Learner

    The metric Return on Investment is favourably biased towards short investments. Which means if you spend less amount and get decent return your ROI will be higher than say getting return 4-5 years down the line. And yes it is a silly metric even if a lot of people use it. A better metric would be NPV for say 5-10 years.

  • Absolutely agree with devils0508 (I do think they probably wanted to get more readers with a sensational notion). Looking at long term performance is absolutely critical when judging an MBA investment (or any for that matter).

    Also I wonder how much more money Harvard, Wharton, etc give out in fellowships and scholarships compared to other “lower” tier schools?

  • Norbert Weiner

    Don’t forget Yale has a smaller class than most other schools and arguably admits more non-traditional candidates (non-profit, military, etc) than any other top 15 business school. So the numbers are skewed. Don’t judge a book by it’s cover.

  • Norbert Weiner

    Yale sends almost exactly the same % of students into consulting, finance, marketing, etc. as other top business schools. Get your facts right.

    This is in part due to the high caliber students, as evidenced by their high GMAT/GPA stats. Its rank is lower than it should be as Yale is punching above its weight.

  • 2cents

    I have a collection of 1981 pennies worth approximately 2 cents (no pun with the user name) for the copper they’re made of. 100% ROI. Why even go to business school?

    might be the additional $million+ median those schools (less NYU) bring historically over a 20 year period…