Business is the most popular major in the United States at both the undergraduate and graduate collegiate levels. But does majoring in business pay off?
A major new report and ranking of schools suggests the answer, in most cases, is a resounding yes.
In a study that is the first of its kind to focus on one major, the Georgetown Center on Education and the Workforce found that while graduates’ earnings and federal student loan debt vary by institution and degree level, the majority of business programs lead to median earnings that are about 10 times grads’ debt payments two years after program completion.
Where does a business master’s pay off the most? Georgetown CEW ranked the top schools and No. 1 is The Wharton School at the University of Pennsylvania, where median earnings net of debt payments two years after graduation are $165,600. Rounding out the top five B-schools are Dartmouth College Tuck School of Business ($162,000), MIT Sloan School of Management ($159,600), Columbia Business School ($157,200), and Stanford University Graduate School of Business ($156,000); see page 2 for the top 50 schools.
The figures and order of schools are slightly different looking at only MBA graduates, with Northwestern Kellogg School of Management second after Wharton and before Dartmouth, at $168K in annual earnings net of debt payment; see table below.
WOMEN MASTER'S HOLDERS MAKE $23K LESS THAN MEN
Georgetown CEW, a research and policy institute within Georgetown’s McCourt School of Public Policy known for its ROI ranking of colleges, based its new report on data for thousands of U.S. schools from College Scorecard. The Most Popular Degree Pays Off: Ranking the Economic Value of 5,500 Business Programs at More Than 1,700 Colleges finds that while the economic value of business programs is high, it lags the financial returns associated with health, engineering, and computer and information sciences programs.
Two years after graduation, CEW found, associate’s degree holders in business have median annual earnings of $30,000 after debt payments, while the financial returns from a business degree rise to $43,200 after debt payments for bachelor’s degree holders and $51,600 for master’s degree holders.
“Strong financial returns are good news for the more than 700,000 graduates each year who pursue the most popular field of study for bachelor’s and master’s degree holders,” lead report author and Georgetown CEW Director Anthony P. Carnevale says. “This information will help prospective students and their families assess the value of various business programs.”
For whom are business degrees less lucrative? Women, who represent 43% of master’s degree holders in business but whose median earnings are roughly $23,000 less than men’s (see table below).
EARNINGS 'ONE SIDE OF THE STORY'
CEW produced its report from multiple sources, primarily program-level data in the College Scorecard released by the U.S. Department of Education in February 2022. The report includes a sortable table of more than 1,700 colleges and universities and 5,500 programs ranked by metrics including earnings, debt payments, and earnings net of debt payments.
By institution, earnings net of debt payments are highest for graduates of Excelsior College in New York and Union County College in New Jersey ($44,400) at the associate’s degree level; Bismarck State College in North Dakota ($103,200) at the bachelor’s degree level; and the University of Pennsylvania ($165,600) at the master’s degree level. By field of study, such earnings are highest for business/commerce majors ($32,400) at the associate’s degree level, construction management majors ($62,400) at the bachelor’s degree level, and management sciences and quantitative methods majors ($96,000) at the master’s degree level, CEW found.
“Earnings and debt at the degree, institution, or program level tell only one side of the story. In a specific business program at a given institution, students can earn significantly more—or less—than the typical earnings for that institution or program,” says Emma Wenzinger, report co-author and strategic communications specialist at CEW.
ASIAN WORKERS HAVE HIGHEST MEDIAN EARNINGS
There are exceptions to the conventional wisdom that more education in business leads to higher earnings. For example, an associate’s degree in business administration, management, and operations from Southern New Hampshire University leads to earnings net of debt of $44,400 two years after graduation, one of the highest among associate’s degree programs in business. This payoff exceeds typical returns for four of the six most common bachelor’s degrees in business, as well as the returns from one common business master’s degree, human resources management and services. Similarly, some bachelor’s degrees in business have greater financial returns than master’s degrees in the same field of study. A bachelor’s degree in finance from the University of Pennsylvania, for example, leads to median earnings of $121,200 two years after graduation, well above the median of $62,400 for master’s degrees in finance across institutions.
There are also what CEW characterizes as "significant discrepancies in earnings by gender and race/ethnicity." Women make up a growing share of graduates with business degrees, but men with business degrees earn more at the median (see above). Further, "Forty-seven percent of young (ages 22-27) bachelor’s degree holders in business are women, and they earn a median of $44,600 annually, compared to $50,500 for men. The contrast at the master’s degree level is even starker: women represent 43% of master’s degree holders in business and earn $75,600 compared to $99,000 for men at the median."
Among racial and ethnic groups, CEW found, Asian workers have the highest median earnings for both bachelor’s and master’s degree holders in business. "For those with a bachelor’s degree in business, early-career earnings for Asian workers ($51,300) are followed by those of Multiracial ($48,600), White ($48,600), Latino ($42,600), Black ($40,700), and American Indian/Alaska Native ($39,400) workers. For those with a master’s degree in business, Asian workers have the highest median annual earnings ($100,000), followed by White ($92,000), Latino ($77,700), and Black ($65,000) workers."
Occupation is also key, CEW found. "Early in their careers (ages 22–27), 12% of business majors become accountants and auditors, and they earn a median of $57,000 per year. Among business majors, financial and investment analysts and securities, commodities, and financial services sales agents have the highest median earnings, at $71,000 per year, followed by management analysts ($67,000) and computer systems analysts ($65,000). Secretaries and administrative assistants have the lowest earnings among business majors, at $38,000 per year."
See the next page for a list of the top 50 schools ranked by master's graduate earnings net of debt payments. Visit cew.georgetown.edu/business for more information.