What An MBA Is Worth: By the Numbers
75% of MBA graduates switch careers and, in turn, double their salary.
That was one finding from the Wall Street Journal, which recently partnered with Times Higher Education to survey nearly 7,000 alumni who earned an MBA between 2012 and 2015. The motivation: collect data on salary history and career switching opportunities.
According to the study, MBAs who graduated from schools such as Yale School of Management, Stanford Graduate School of Business, and Jones Graduate School of Business at Rice University reported making tens of thousands of dollars a year more after obtaining their MBAs.
Kelsey Gee, a writer at Wall Street Journal, says the study highlights an important note: career-switchers can reap substantial financial rewards from getting an MBA.
“The results show that the credential sought-after by generations of bankers and consultants still helps those graduates get ahead at work,” Gee writes. “The median salary for consultants who returned to professional services firms like McKinsey Co. or Deloitte Touche LLP after getting an M.B.A. was $162,000 a year, the highest pay in any sector, and a boost of $82,000 annually. Alumni surveyed in finance and tech jobs tied for second-highest pay, making $150,000 if they also worked in those sectors before business school.”
Pay Check By Industry
Among those who stay in the same field after earning an MBA, consultants tend to earn the most, according to the study.
Those in the healthcare sector tend to see the biggest increase in their pay following an MBA.
A Gender Pay Gap
What’s most surprising about the data is the pay gap between male and female MBAs.
“The median salary of women who worked full-time before entering business school was $63,000 a year to men’s median salary of $67,000, or 94 cents on the dollar,” Gee writes. “Both men and women reported more than doubling their earnings after graduation. In their post-M.B.A. careers, the median of those women’s earnings was $130,000 annually and men’s was $140,000.”
A Fresh Start
What do these numbers mean? Well, for one, it highlights that the MBA still has great relevance if you’re looking to switch careers.
According to the study, out of the 4,400 respondents with jobs in the US, three out of four reported switching careers after earning an MBA. Roughly 5% of MBAs surveyed even reported dropping full-time employment to pursue their own business.
“The promise of the M.B.A. is still very real. Where else can do this magical thing and reinvent yourself partway into your professional life?” M. Eric Johnson, dean of Vanderbilt University’s Owen Graduate School of Management, tells the Wall Street Journal. “It’s a uniquely American ideal that if you’re 28 and decide you don’t really like what you’re doing, you can go back to school and start off again in a totally different direction.”
Another striking trend: many MBAs pursue the tech sector after earning their degree.
Out of 3,100 alumni who switched careers, 25% report pursuing the tech sector after getting their MBA.
Karen Schweitzer, a business school admissions consultant, curriculum developer, and education writer, recently wrote a ThoughtCo. piece on reasons why one should pursue an MBA.
Among those reasons? An MBA can grant you the ability to change careers, switch industries, and make yourself a marketable employee in a variety of fields.
“While enrolled in an MBA program, you will have the opportunity to learn general business and management expertise that can be applied to nearly any industry,” Schweitzer writes. “You may also get the chance to specialize in a particular area of business, such as accounting, finance, marketing, or human resources. Specializing in one area will prepare you to work in that field after graduation regardless of your undergraduate degree or previous work experience.”