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Conventional wisdom says that the demand for business school goes up during a recession. Is that true during this economic downturn? Or does the global nature of the recession and of graduate management education complicate this picture?
Yes—and yes, says Alex Chisholm, senior research analyst at the Graduate Management Admission Council. The historic relationship between recessions and business school demand is holding true during this economic downturn, but demographic shifts among those seeking graduate business education around the world paint a more complex picture.
Presenting a session on the impact of the global economy on the MBA pipeline at GMAC’s Annual Industry Conference, Chisholm quoted numerous indicators showing how dramatically the economy has changed in a short period of time. Back in July 2008, the IMF projected a 3.9 percent growth in the world gross domestic product for 2009 – a prediction that had plunged to 1.3 percent retraction just nine months later. “The scariest thing is how quickly and severely things have deteriorated,” he said.
Meanwhile, GMAT volume has risen—to a projected record of 265,000 for the testing year ending June 30, 2009, as US job losses have hit 6 million since December 2007. Chisholm showed how peaks in GMAT testing volume have corresponded with recessionary declines in US employment over the past three decades.
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