Why Millennials Go To Grad School


Still, none of that applies to the rockstar employee, who probably doesn’t need business school at all if her aim is to get promoted quickly and make more money. Let’s take a hypothetical college graduate who goes into finance, does extremely well and gets promoted quickly during her first three or four years. If, by year four, her salary is higher than the average salary of the graduates of a top MBA program, she shouldn’t go to business school—at least not with the expectation that it would speed up her ascent. Basically, if you’re good enough in your field, you don’t need an MBA, reasons Holtom.

But the business school professor emphasizes that the rockstar employee is typically in the 99th percentile. For most people, it makes sense to use business school to pursue extrinsic career goals. Holtom adds that more education means more earnings in the long term. People like to use the Bill Gates example—“He dropped out of college and now he’s worth billions!”—but the existence of exceptions doesn’t disprove the rule.

Making a five-year plan isn’t a bad idea, but people shouldn’t expect to follow it exactly. The study outlines the concept of career shocks: “[events that trigger] deliberation involving the prospect of a change in an important career-related behavior.” Career shocks, whether positive (an unexpected raise) or negative (a mentor leaving the company), have the potential to push people toward or away from graduate school.


The researchers uncovered some unexpected patterns. They had hypothesized that negative career shocks would increase study participants’ likelihood of attending graduate school; the hypothesis wasn’t supported. And though they had expected positive career shocks to make people more likely to stay at their jobs, the opposite turned out to be true.

Holtom makes sense of the latter finding this way: People who get unexpected recognition from their organizations might start thinking of themselves as management material—and as MBA material. “It could be that they got confidence from that,” he says. Confidence also leads to greater risk-taking, and though there’s evidence that MBAs help most people earn more, taking time off work and paying thousands of dollars still requires a certain level of self-assurance.

Since the study focuses on Millennials, you have to wonder: Is this generation more intrinsically motivated than previous generations? “It’s a great debate and there’s a lot of anecdotes out there, a lot of opinions, but very little good research on that,” Holtom cautions. What he does see is the “all I want is everything, and I’m optimistic that I can get it,” attitude—“it” being a job that simultaneously pays well, provides a path for promotion, and provides the opportunity to develop skills, make a difference in the world, and have good work-life balance. It’s a tall order.

What happens when Millennials face reality, though? Holtom says that the most recent data from the Department of Labor suggests that people are going with the money. A combination of difficult economic conditions and the rising cost of education leads people to pursue extrinsic career goals. After all, a valuable learning experience doesn’t pay off anyone’s loans.


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