An MBA is a long-term investment, and every investment yields a different return. So which MBA programs are the surest bets over time?
According to Payscale’s new “College Salary Report” from PayScale, Harvard Business School MBAs land the heftiest paychecks as their careers progress. By mid-career, some 15 years after graduation, HBS grads are earning median pay of $201,000. HBS doesn’t just dominate among business schools. Their MBAs also earn more by mid-career than alumni from any other graduate or undergraduate program, too.
How dominant is Harvard Business School in career pay? Start by looking at the second place finisher: Columbia Business School. Their MBAs average $184,000 by mid-career — $17,000 a year less than HBS grads. Columbia is followed by MIT ($183,000), Wharton ($181,000), Stanford ($176,000), U.C.-Berkeley ($174,000), Chicago ($172,000), Northwestern ($167,000), Santa Clara ($164,000), and Duke ($160,000).
RANKINGS AND PAY CLOSELY CORRELATED
Notice a trend? For one, nine of the ten highest-paying MBA programs are private schools. Another nine are situated in major metros. What’s more, eight of these schools ranked among the top ten MBA programs in Poets&Quants’ last ranking (with Duke placing a close 11th). In other words, ‘prestige’ MBA programs with strong regional and industry networks and deep pockets open doors, with their cache reverberating long after the recruiting and hiring cycles.
The “College Salary Report” data comes from PayScale website visitors. To access salary information by region, industry, and job function, visitors must complete a survey that includes their education and salary history. The report, which is based on 1.4 million responses from Americans, includes both early career (five years or less of experience) and mid- career (“44 years old and [having] 15 years of experience”).
To qualify, MBA programs must generate a minimum of 50 survey profiles from alumni. 190 MBA programs met this qualification, including top-tier schools like Stanford, Wharton, Chicago, MIT, Northwestern, and Columbia (with Dartmouth and Wisconsin being noticeably absent). Overall, the pay of 27,292 MBAs is represented in this survey. However, it excludes MBAs who aren’t employed full-time or possess such additional degrees as MDs, JDs, or PhDs. To calculate pay, PayScale “combines base annual salary or hourly wage, bonuses, profit sharing, tips, commissions, overtime, and other forms of cash earnings, as applicable.” However, it excludes stock compensation, retirement benefits and the value of other non-cash benefits such as healthcare. That’s probably why Stanford GSB grads, a disproportionate share of which go into early stage tech companies, are not neck-and-neck with HBS in this survey.
Looking for a surprise among the data? Chances are, Santa Clara caught your eye. If you consider geography, Leavey is located just east of such Silicon Valley hotspots as Cupertino, Sunnyvale, and Mountain View. However, the school doesn’t operate like a conventional MBA program, boasting just part-time (120 students per year) and executive (20 students annually) paths. As a result, measuring the school against MBA alumni from more traditional two-year, full-time programs is difficult. Even more, this school’s inclusion exposes an important drawback in PayScale’s methodology: Executive and part-time MBA salaries are counted alongside full-time MBAs. This either dilutes the potency of the degree (i.e. non full-time grads likely possess fewer years of earning power after finishing their MBA) or boosts it (i.e. executive and part-time MBAs make higher salaries after finishing their degree by virtue of their longer-term employment tenure with the same firm).
SAN JOSE STATE AND SANTA CLARA GRADS MAKE A SPLASH
Leaving that aside, several MBA programs punched above their weight, according to PayScale’s metrics. Like Santa Clara, San Jose State is on the outskirts of Silicon Valley. While the school focuses its energies on full-time MBAs, Lucas grads gross a $153,000 median mid-career salary, higher than Michigan, Virginia, and Yale, according to Payscale’s data. Pace University MBAs apparently make full use of their Manhattan locale, pulling down $145,000. Babson ($151,000), Bentley ($141,000), Texas Christian ($140,000), and Drexel ($137,000) graduates fare well around the 15-year mark as well.
On the flip side, the performance of several schools left something to be desired. Despite their alma mater’s perfect location, New York University MBAs earned $157,000 by mid-career, $27,000 a year less than their Columbia counterparts. Mighty Michigan ranks just 17th among MBA mid-career pay at $151,000, just a hair higher than fellow disappointment Yale ($150,000). Washington University ($140,000), North Carolina ($139,000), Vanderbilt ($134,000), Ohio State ($132,000), Michigan State ($129,000), Georgia Tech ($128,000), and Arizona State ($126,000) also saw graduates pull down mid-career salaries far lower than their school rankings would indicate.
Go to next page to see the top 50 MBA programs for early and mid-career pay.