Are the long term financial and professional rewards sufficient to
justify completing an MBA?  Are the reward differences significant
between a
world-reknowned school like Wharton or Harvard compared to William And
Mary for example?  Are the typical jobs an MBA graduate goes on to
different to someone who has not completed an MBA?

An article, “Should you go?  -A graduate degree may be your key to
advancement–though you can probably get a good job now” by Ron Lieber,
Carolyn Kleiner, and Joellen Perry on the JustColleges.com web site
has this to say:  “According to the Census Bureau, doctors, lawyers,
and people with M.B.A. degrees earned an average of $95,148 in 1998,
more than twice the $40,478 earned by workers with only a bachelor's
degree. Someone with a doctorate brought home $77,445, on average;
someone with a master's, $51,183...     …Meanwhile, demand remains so
great for newly credentialed M.B.A.'s that each commonly fields
several offers and many get a signing bonus.”                   
http://www.justcolleges.com/grad/index.phtml?inc=shouldyou.htm

Figures from Canada at Gradsource.com show that “University statistics
for graduate employment were even more impressive for MBAs. Most
Canadian universities reported an 80 to 90 percent employment rate for
MBAs within 90 days of graduation. Several universities that tracked
employment longer reported 100 percent employment for MBAs one year of
graduation… …Two years after graduation you'll probably be making 55
percent more than undergraduates from the same field -- and a full 90
percent more than business graduates from community colleges.”
http://www.gradsource.com/article.cfm?ArtId=4628

This article from Post-Gazette on job and earnings prospects from MBAs
might also interest you: “What slump? Market turmoil, economic
slowdown doesn't stop MBA grads from finding well-paying jobs “
Tuesday, April 03, 2001
http://www.post-gazette.com/businessnews/20010403mba2.asp

Career Choices Newsletter June 1999
http://www.careerprep.com/may-june99.htm summarizes a 1998 survey of
MBA graduates conducted by the Graduate Management Admission Council.
Thos who graduated from the top schools had median earnings of
$96,000. Those who graduated from competitive schools which were
somewhat less selective in their choice of students had median
earnings of $52,000. Graduates of the less selective and less
competitive schools had median earnings of  $45,000.

With respect to the perceived quality of a college, the report
“College Quality and the Earnings of Recent College Graduates”
(September 2000) by  the National Center for Educational Statistics
might also be of interest.  A copy can be ordered or downloaded as a
pdf file from: http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2000043
The report reached the following conclusions: for men, “obtaining a
degree from a selective institution (measured by the Cooperative
Institutional Research Project rating for colleges and universities)
was associated with an earnings increment of 11 to 16 percent. Men
also benefited from attending institutions with higher per capita
spending on instruction. For women, selectivity (measured by the ratio
of applicants to admissions) was associated with higher earnings. A
unit increase in this ratio was associated with about a 12 percent
increase in earnings. Attending a selective liberal arts college, and
attending an institution located in the mid-Atlantic region or New
England also had significant positive effects on women’s earnings… 
…For men, attending a college whose characteristics were one standard
deviation above the average was estimated to be worth an additional
$2,311 in annual earnings, or an 8.1 percent increase above the
average of $28,567. For women, the comparable increment was $3,746, or
a 17.4 percent increase above the average of $21,590.”  These figures
are from the Executive Summary.  The full report is 103 pages.

I have found some figures from Admissions Consultants about the
intended career paths of MBA graduates:
http://www.admissionsconsultants.com/mba/mbacareer.asp  Consultancy is
the most popular (27%), however, this would be relevant only to those
who already have business experience.

I hope this answers your query, but please request clarification if
required.

Search strategy:  1.  MBA, salary differential, statistics
2.  MBA, job prospects
://www.google.com/search?q=MBA+salary+differential+statistics&hl=en&lr=&ie=UTF-8&oe=UTF-8&safe=off&start=30&sa=N
://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&safe=off&q=MBA+job+prospects

---

Request for Answer Clarification by tarquin-ga on 08 Jul 2002 09:53 PDT

Thank you, some of the information you posted was useful.  However, a
lot of it was was generic to degree based studies.

Perhaps if I gave a bit more information.  I already have a PhD in a
life science (unrelated to the business in which I work) and am
currently earning $100 000 in the US.

I guess the information you provided indicates that I would probably
not make much more money at a generic level.  However, I am ambitious
and do not want to settle at my current position. That is why I kind
of added the other two parts to my question...
a) Does business school make a difference?
b) What are the business areas that an MBA graduate may go in to? (The
Canadian article only touched on this briefly).

Thanks

---

Request for Answer Clarification by tarquin-ga on 08 Jul 2002 09:54 PDT

Oops just found the good article on career paths, my apologies.

---

Clarification of Answer by tehuti-ga on 08 Jul 2002 10:11 PDT

Hi,

Only the National Center for Educational Statistics report is generic;
the other references all relate to MBAs.  However, I think that what
would be more relevant to your situation is data on earnings before
and after the MBA of those who took it for career progression/career
change reasons.  I vaguely recollect coming across some information
about this during my earlier searches. I will try to find it again.

---

Clarification of Answer by tehuti-ga on 08 Jul 2002 10:49 PDT

http://www.sba.uconn.edu/mba/FulltimeMBA/forbes.htm has an analysis by
Forbes on real salary gains against the true cost of tuition and lost
earnings.  “National programs, such as the top-ranking Harvard School
of Business, generated salary gains of $37,000 during the four years
after graduation. Graduates of regional programs, such as UConn,
averaged $23,000 for the same period. However, the return on
investment for the regional programs matched that of the national
programs, averaging about 33 percent.” Forbes asked 1994 MBA graduates
to disclose anonymously their salaries before matriculating, just
after graduation, and four and a half years later.

An article on Monster.com “What Influences Post-MBA Salaries?” by Dona
DeZube concludes that “The number one factor influencing MBA graduate
earnings isn't school ranking or GPA. It's what you earned before you
got your degree, according to data collected by the Graduate
Management Admission Council (GMAC). The other excellent predictor of
post-graduate salary is the number of people you managed before you
entered your MBA program.”  Apparently, these two indicators will
predict with 90% certainty your post-MBA salary.  Unfortunately, no
numerical data are provided as examples.
http://finance.monster.com/articles/121701/

A table drawn up by BusinessSchoolAdmission.com shows average pre and
post-MBA salaries.  The average salary increase ranges from 138% at UT
Austin to 211% at NYU (Stern).
http://www.businessschooladmission.com/mbasalaries.html

Although once again from Canada, this survey of MBA graduates might be
of interest, as it shows the sectors in which they became employed as
well as salaries before and after the degree:
http://www.admin.uottawa.ca/English/CareerServices/1999/MBAresults.PDF

There is also a survey of 2001 MBA graduates from Cambridge UK at
http://www.jims.cam.ac.uk/companies/recruitment/destination_2001.pdf 
The average increase in salary after the MBA was 45% and each graduate
received an average of 2 job offers.  Students had an average age of
29, and average 6 years work experience before starting the degree. 
53% had first degrees in science, engineering or medicine.  51%
changed sectors after the MBA.  The biggest move was into Consultancy
(13%).  57% changed jobs function, with 16% moving into consultancy
type roles and 15% into Business Development, while 10% began their
own business ventures. Health/pharma/biotech accounted for 7% of jobs
before and 11% of jobs after the MBA (compared with only 3% the
previous year).  Surprisingly, the figures for banking and finance
were 37% before and 23% after. Salary increases were highest for those
who stayed in the same sector or job function as before the MBA and
lowest for those who combined changes in jobs, sector and location.

An article at QuintCareers.com says “According to a study by
Accountemps, a global temporary staffing service for accounting and
finance professionals, 80 percent of executives responding to the
survey said that a graduate degree in business is still important to
reach senior management ranks within most companies”  The article
discusses other topics relating to the decision whether or not to
study for an MBA and provides a large number of links to other sites
of relevance. http://www.quintcareers.com/MBA_degree.html

Hope this has filled the gaps.

This should provide enough info for me to get off my ass and do something useful!

The magazine www.Business2.com provided an EXCELLENT COVER STORY right
up your question's alley:

"What's an MBA Worth? A lot less than you think, according to two
controversial new studies." It will cost more than $100,000 to earn a
degree at an elite business school. Just one problem: There's little
real evidence that it will enhance your career. By Andy Raskin, July
2002 Issue http://www.business2.com/articles/mag/0,1640,41346,00.html

I hope this helps you out Dr.
Sincerely,
MapTheWay

Hmmm, I'm not too convinced by the Business2.com article, although I
do not have any axe to grind about MBAs, never having felt drawn to
become one myself.

The first part of the article centres around the opinions of a student
who "knocked around for a while as a ski instructor, then as a TV
sitcom stand-in. But when he decided at the age of 28 that it was time
to get serious, he applied to one of the most revered career-building
institutions in capitalism: Stanford's Graduate School of Business...
...Ask him about his educational experience... he cites his role as
executive producer of the 2002 GSB student musical, Spectacular,
Schmectacular, and "All About Beer," a one-week elective about
organizational dynamics in the brewing industry. As for his future? he
hopes to start a business he describes as "a cross between Moulin
Rouge, Angkor Wat, and Burning Man -- in a supper club."

Well, perhaps the most tactful comments I can make are that (a) I
would prefer my teenage daughters to choose a different role model to
define their future ambitions, and (b) a resume based on a similar
life story would probably not end up in the "definitely must
interview" pile on my desk.

The second part of the article is based on a paper by a Prof Pfeffer,
who, having looked for studies on the subject, nevertheless, "admits
that one reason there's scant evidence for the alleged superiority of
MBAs is there's not much data"  The article goes on to make the point
that Pfeffer's own paper cannot be conclusive "in part because of
certain statistical flaws in the studies he reviews"

In other words, the jury is still out.  I would guess that an MBA is
probably most valuable when combined with previous work experience,
and this seems to be the case in the studies I cited in my answer.

I am inclined to agree with Tehuti.  The Business 2.0 article looked
like a space filler!  I have found a number of good studies on the
websites of some of the business schools.  Darden has some excellent
information covering the different industries students go in to and
the salaries that they get paid.
http://www.darden.edu/career/career_stats.htm

I guess the trick is to figure out a five year career plan and go for
it....!

Some say MBAs no longer worth extra cash
Mon Jul 22, 9:05 AM ET
Del Jones USA TODAY  
http://story.news.yahoo.com/news?tmpl=story2&cid=677&u=/usatoday/20020722/bs_usatoday/4294940&printer=1

"When college graduates apply for a job at California marketing firm
Panagraph, those with an MBA assume they are worth an extra $10,000 to
$15,000.

Panagraph CEO Mark Astone, who has an MBA, says they're not: Even
those with MBAs from prestigious Stanford ''get real delusional''
about their capabilities.

''If you put the same effort into a job, career and getting
experience, you'll be better off,'' he says.

Astone's not alone among chief executives. ''Most people with MBAs
can't manage themselves out of a paper bag,'' says Winans
International CEO Ken Winans, who has an MBA from the University of
San Francisco (1987) and teaches MBA students at Saint Mary's College
in Moraga, Calif.

Gary Griffiths, CEO of tech company Everdream, told his 25-year-old
son to save his time and money. Tom Griffiths, who worked at a dot-com
that went belly up, is a sales consultant at FactSet Research Systems
selling financial information to institutional investors.

Don't interrupt a career unless you are bogged down in a dead-end job,
says Gary Griffiths, who has an MBA from George Washington University
(1979).

These are not the best of times for MBAs. A big blow will land with
the September issue of Academy of Management Learning and Education,
in which management scholar Jeffrey Pfeffer, of Stanford, no less,
examines 40 years of research and concludes there is scant evidence
those with an MBA better their careers or fortunes.

Management consultant McKinsey & Co. still competes for top MBA
graduates. But the percentage of its hires with MBAs has dropped from
61% in 1993 to 43% today, because it finds students with law, medical
and other degrees equally successful.

''We don't believe the world's best talent is exclusively locked up on
MBA campuses,'' says McKinsey spokesman Andrew Giangola.

Even President Bush ( news - web sites), the first president with an
MBA (Harvard, 1975), is finding the degree has lost some shine after
Enron and other corporate scandals.

Jenet Noriega Schwind, CEO of Empyrean Asset Management, was studying
for an MBA when she dropped out to get a doctorate in industrial
psychology. She says the MBA will go down as a fad.

MBA critics concede the degree is often necessary to get some jobs,
such as in investment banking. And MBA graduates of prestigious
schools such as Harvard are often followed by headhunters throughout
their careers.

CEO Jim Brown has a Harvard MBA (1995). Most valuable are the
friendships he made at Harvard with future leaders, he says.

As far as running the company? The MBA is worthwhile, he says, but his
1997 law degree from New York University taught him critical thinking
that he relies on more when running telecommunications software
company InvisibleHand Networks."

Dear tarquin,

I would definitely read the article mentioned by maptheway:

"... September issue of Academy of Management Learning and Education,
in which management scholar Jeffrey Pfeffer, of Stanford, no less,
examines 40 years of research and concludes there is scant evidence
those with an MBA better their careers or fortunes."

In my humble opinion, a more important question to address is what
will an MBA do for you?

* Power (and $$$) comes from the influence of others... this can come
from writing academic papers, but more generally from people
management. Is this the direction you wish to pursue? What weaknesses
do you have have here? It could be that addressing these may have a
bigger payoff...self-knowledge, understanding power, influence,
politics, self-promotion, acquiring the skills to convince others of
your point of view, picking the industry, the company, the position,
and finding mentors. What are your weaknesses compared to those
earning twice as much? "doing an MBA and having the above weaknesses
will not ensure success :-)
* An MBA can be a quite generalist degree - a sample of many subjects
rather than an in-depth study of say a PhD: marketing, accounting,
people skills, economics, ethics, information systems, international
business, project management, strategic decision making. Thus it
sounds trite, but different people will gain different things from an
MBA...
* I don't think there is any doubt that you would get value from an
MBA... it would be up to you. Again how you turn that knowledge into
$$$ is up to you.
* However, could your time and efforts have a bigger payoff than an
MBA? Quite possibly yes, depending upon whether you would still devote
the same time and $$$ to self-improvement and gaining relevant
experience... an MBA or degree is an easy way of ensuring commitment.
Many larger companies have a "management fostering/trainee" track
which allows you to gain experience over a wider than normal range of
business - is this an option?
* What are your alternatives? If it is nothing... definitely go for it
:-)

Good wishes for your career plan... it sounds like you already know
all of the above... PS: Google answers is not quite paying $100,000,
even with an MBA :-)

Regards,