How Wharton Fought Its Way To The Top Of U.S. News’ MBA Ranking

It’s no secret that the University of Pennsylvania’s Wharton School has been slipping in MBA rankings in recent years, often falling behind the University of Chicago’s Booth School of Business. In Poets&Quants’ ranking of the best full-time MBA programs, Booth has bested Wharton in six of the seven P&Q lists since 2010.

For years, regardless of rankings, the conventional wisdom has been that Harvard, Stanford and Wharton are at the top of the world’s business school elite. Increasingly, however, that convention has been questioned given a long string of Booth victories over Wharton. Last year, for the first time ever, Booth topped Wharton in the U.S. News’ ranking.

Asked about the slippage by Wharton students at a town hall in October, Dean Geoffrey Garrett suggested that the school’s lagging financial support of students was a key factor in the school’s ranking decline. “Correlation is not causation, but it is true that HBS and GSB spend considerable more money at the MBA level than we do and we suspect that’s true for Chicago Booth as well,” he conceded. “We should just try to do the best job we can and it’ll work out in the rankings. I think it’s much harder to game at the top.”

BEHIND THE WHARTON VICTORY: IMPROVED PAY & EMPLOYMENT STATS

Since that on-campus town hall, however, the school’s most famous alum has won election as President of the U.S. and now Wharton has moved into a first place tie with Harvard Business School in the 2017 U.S. News’ MBA ranking. It is only the second time in 28 years that Wharton has captured the top prize in what is arguably the most-watched business school ranking of all (see The Big Surprises In U.S. News’ 2017 MBA Ranking).

Wharton fought its way to the top, from fourth place last year, with improved pay and employment numbers. Average salary and bonus at Wharton topped all schools at $155,058, a healthy 5.7% rise. The percentage of employed students at graduation also beat HBS, Stanford and Booth at 85.8%, up from 80.8% a year earlier. The percentage of students with jobs three months after commencement also crushed its peers at 95.5%, up from 93.5%. These three metrics alone account for 35% of U.S. News’ ranking, with 21% for employment and roughly 14% for pay. Along with GMAT and GPA scores, these stats have the most impact on year-over-year changes in the ranking.

But there’s a potentially troubling issue with the quality of those stats. Unlike Harvard, Stanford and Booth, whose results are based on a 100% to 99% report rate from graduates, the Wharton numbers reflect a much smaller sample size of 92%. A record 65 MBAs out of a graduating class of 850 students failed to report on their career outcomes to Wharton last year. As a percentage of the students actually seeking employment—639—some 10.2% didn’t bother to fill out and return Wharton’s survey.

THE PERVERSE ‘DON’T ASK, DON’T TELL’ INCENTIVE IN LOW REPORT NUMBERS

It’s generally assumed that graduates who fail to complete a school’s career surveys are among the least satisifed with their MBA experience. They are more likely to be unemployed and more likely to have accepted a job that pays less than expected. So lower response rates can lead to artificially inflated pay and employment stats. What’s more, a large non-report allowances creates a perverse ‘don’t ask, don’t tell’ incentive for schools to ignore students still looking for jobs.

It creates the temptation for a career management office to be more aggressive in getting the report from a satisfied graduate who landed a high-paying job over a disaffected student who may be either unemployed or under-employed. That’s why high response rates on these surveys lead to more credible and authoritative results. Low reporting rates can lead to artifically high salary and bonus and employment rates—and it’s hardly a signal of high student confidence in the quality of career services.

The Financial Times, which tracks response rates in its review of school data, shows that among its ranked U.S. MBA programs at least 44 schools, including Temple University’s Fox School of Business in Wharton’s hometown of Philadelphia, boast 100% response rates. Another 16 schools have response rates of 99% or 98%. Harvard, Kellogg, Tuck, U.C. Berkeley, UVA Darden hit 100% last year. Stanford, Chicago Booth, MIT Sloan, Duke Fuqua, Yale SOM reported response rates of 99%.