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Business schools are likely to benefit from a recession

Should You Pursue an MBA in a Recession?

Most economists expect a recession to hit within the next year. For many Americans, it may already feel like we’re in one. Inflation is rising and more than 106,000 tech workers have been laid off in 2023—and it’s only March.

A number of top business schools have announced incentives—from fee waivers to deadline extensions—for laid-off tech workers in an effort to recruit MBA applicants (historically, business schools have seen a rise in applications during times of economic distress). However, experts say, there are a few things prospective applicants should consider before applying for an MBA in a recession.


Employers are still interested in hiring MBAs. In fact, according to a 2022 Corporate Recruiter survey from GMAC, 97% of recruiters expect demand for MBA hires to remain the same or increase at their organizations.

“Even with the economic uncertainty brought on by the pandemic, hiring trends for MBAs remained stable from 2020 to 2022,” Trea Branch, of NerdWallet, writes. “Employers leaned into MBA hires for their leadership and problem-solving skills and their ability to scale up and expand globally.”

Despite the high demand for MBAs, many say that the cost of the degree is a major deterrent. According to a 2021 GMAC survey, 60% of prospective MBA students globally say cost either moderately or significantly impacts their decision to pursue business school. And the cost of an MBA isn’t getting any cheaper. Across the top 10 schools, the average cost of an MBA increases 3% year to year with an increase of 9.3% over the last five years.


A recent study found that the median payoff on graduate degrees, including the MBA, has a negative return on investment. But ROIs from nearly all the top 25 B-schools have great payoffs. At Northwestern University’s Kellogg School of Management, the ROI is $2,995,559; at Chicago Booth, it’s $2,547,297; at Columbia Business School, the median ROI is $2,583,931, and at MIT Sloan, it’s $2,648,994.

If you’re able to afford an MBA from one of the top business schools, the data shows that pursuing that degree will be well worth the costs.

“The MBA has a long upper tail of elite programs with lucrative payoffs,” Preston Cooper, the primary author of the study and a research fellow at The Foundation for Research on Equal Opportunity, says. “Thirteen MBA programs at prestigious schools such as Yale, Penn (Wharton), and Chicago (Booth) offer a lifetime return exceeding $2 million. Perhaps this is to be expected from a degree whose value derives from the networking opportunities available: choice of the institution makes an enormous difference to the ROI of an MBA. The handsome returns commonly associated with MBAs are only available at a handful of top schools.”

Sources: NerdWallet, P&Q, P&Q, The Hill, Time, Crunchbase News

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