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Potential students have always pondered the value of the MBA. But in this economic downturn—with more college graduates struggling with both unemployment and student loan debt—the question has added urgency: What’s an MBA worth?
In a strictly monetary sense, the degree consistently adds value in terms of salary. MBAs, on average, make more than both recent college graduates with bachelor’s degrees and master’s level graduates in disciplines other than business. Studies including GMAC’s Corporate Recruiters Survey have shown that graduate management degrees can have a significant positive effect on lifetime earnings.
In weighing what an MBA is worth, it’s also worth thinking about precisely why MBAs make more money.
Perhaps more than any other graduate program, the MBA gives students a broad array of applicable skills. MBA programs teach not only the theory behind sound business practices, but also strategic and management skills. The case study method and collaborative approaches used by many MBA programs hones skills in a very practical way.
Some 85 percent of respondents in the most recent Global Management Education Graduate Survey said that their program helped them develop important professional skills and abilities, notes Michelle Sparkman-Renz, associate director, GMAC Research and Development. Specifically, graduates were most satisfied with their ability to manage strategy and innovation, their general business knowledge, their strategic and system skills, the ability to manage the decision-making process, and their generative, or innovative, thinking abilities.
Such skills are applicable across a wide variety of job functions within an organization and across many different industries. The practical skill sets, along with the personal improvement and the personal networks they developed in business school, can all lead to more lifetime career opportunities.
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