Economy’s Impact On MBA Applications: 4 Deans, 4 Views


Texas McCombs School of Business Dean Lillian Mills. McCombs photo

Lilian Mills, who became interim dean of Texas-Austin McCombs in 2020 — in the crucible of the Covid-19 downturn — and lost the “interim” tag a year later, knows all about the undulations of the economy.

“I know there’s some national headwinds in things like MBA enrollments,” she tells P&Q, “but we are enjoying living in Austin, Texas right now. And in spite of some rise in cost of living, this remains a very attractive — both personal and business — ecosystem right now.”

The McCombs Class of 2023 brought the highest-ever average score on the Graduate Management Admission Test (708), Mills notes, while tying the highest class Graduate Record Exam score and class GPA (3.49 in 2018). It was also the school’s largest Forté Foundation class, of 40, and largest Consortium class, of 48 — especially noteworthy because McCombs’ new capital fundraising campaign has already raised hundreds of millions of dollars, including $100 million for scholarships that is mostly earmarked to help bring even more low-income students to Austin.

And what about the incoming Class of 2024? “Things look really good for the coming fall too,” Mills says.


“We’re targeting MBA enrollment of 220-230, which is strategically down from our recent graduating class,” Mills says, “but the quality continues to be strong in a competitive year, which just feels really good in the face of some national headwinds.”

Mills, like her fellow deans, acknowledges the counter-cyclical nature of MBA applications, as well as those of other master’s programs. “When the economy is booming, the opportunity cost to go back to school is higher,” she says. “So we have experienced a little bit of that like our colleagues do.”

But the McCombs School shares with its peers aa key advantage that helps “temper” the temporary slump.

“The thing that tempers the cyclicality is, like a lot of prominent schools, we have executive education,” Mills says. “And so if the graduate education is a little counter-cyclical, the executive education is cyclical. When companies are flush, they reinvest in employee training. We’re drawing from a wide set of the corporate ecosystem. In 2020 and 2021, many companies were not yet ready to fly employees into Austin for residential education. That has rebounded now that vaccines are available and vaccination is so widespread.”

Ohad Kadan will become the new dean of ASU’s W. P. Carey School of Business on July 1


Ohad Kadan takes over as dean of the W.P. Carey School of Business at Arizona State University this summer. After 20 years as a finance professor at the Olin Business School at Washington University in St. Louis, he’s seen lots of economic ups and downs, and he maintains optimism about the strength of MBA programs in the U.S. amid the strong current — and possible weak future — economy, fueled at the moment by international interest.

“Full-time MBA program is counter-cyclical,” says Kadan, echoing his fellow deans. “And the economy has been very strong recently post-Covid — let’s called it post-Covid, though Covid is not over by any means. And so domestic U.S. students have a lot of hope. I mean, why would you give up two years of your income, basically, to go to school when there’s so many opportunities out there?

“So we do see that. I mean, I can see it in my current school and my incoming school I’m going to. And it’s well-known that most schools are experiencing this decline in domestic application. You see still strong applications from international students.”

The question, Kadan says, is how to strike the right balance.

“Especially with MBA and we’re talking about full-time MBA now, how do you create a balanced class that has the right level of diversity?” he says. “So given that the number of applications from domestic students is declining, it’s a balancing act that you need to go through. That’s what I do see.”


Arizona State Carey, ranked No. 34 by Poets&Quants and No. 29 by U.S. News, is widely seen as a school on the rise when it comes to its full-time MBA. The economy — good, bad, or good and bad — will determine whether that trend continues.

“Going forward, it really depends on what’s going to happen with the economy,” Kadan says. “While full-time MBA is counter-cyclical, the part-time programs like evening MBA and executive MBA are kind of pro-cyclical, meaning that if the economy is good, you’d see more of them. If you have a job, you’d be able to spend some money on getting your evening MBA or executive MBA, or companies would be more likely to sponsor this.”

There is much uncertainty, but like Lilian Mills, Kadan sees strong interest in graduate programs from international applicants. And he sees a major advantage in the school’s location in the growing and thriving Phoenix, Arizona area.

“Nobody knows if we are going to have a serious recession,” he says. “Obviously, there is some slowdown in the last few weeks and we are facing significant inflation, and so the cost of living has been going up quite significantly. How exactly it’s going to affect our demand, especially for graduate education, it’s hard to tell. I do not see a decline in the number of applications from international students, either for MBA or specialized master’s programs — I don’t see the decline. The demand for undergraduate education is very steady, even strong.

“So I’m optimistic. W.P. Carey is located in a metro area that is very strong — the migration into the Phoenix region is just mind-boggling, both individuals and companies migrating into this area. For a business school, that is very important. Interaction between the business school and businesses is very important. And when the business ecosystem is growing and thriving, that’s very strong. That’s very good for the business school. So I have very high hopes for W.P. Carey and ASU being located in such a thriving and growing metropolitan area.”

See the next page for excerpts from P&Q’s interview with Raghu Sundaram of NYU Stern.

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