Deciding if an MBA is worth it? An MBA can be a great investment. Get inspired with these MBA facts, statistics, and resources.
For long, a Masters in Business Administration (MBA) degree has been the answer for advancement in a career, overcoming underpaid jobs, and even, for getting richer.
However, with the exorbitantly rising costs of pursuing an MBA, the question remains whether one should enroll for an MBA? Are they really worth it? Are they still the game-changing program choice amongst candidates looking for a lucrative career?
These million dollar questions for candidates can only be answered after taking various determinants into consideration, including cost and benefit, salaries, location, cost of living, programs offered, and quality of research. In fact, StudyAbroad reported that around 43% of the international students have opted for FAME programs – Finance, Accounting, Business and Management subjects – which account for the largest share. The reason behind the growing popularity of obtaining an MBA is the high return on investment promised to different MBA graduates.
In this article, we will cover the various factors determining the value of an MBA in a candidate’s career. The following determinants will assist in finding out whether an MBA has still got its sheen, or the changes in the job market have made that sheen lackluster.
What are the Best MBA Programs in the World?
According to the Financial Times Global MBA Ranking and QS Global MBA Ranking, the following colleges have been garnered with the Crème de la Crème award of the best MBA programs in the world.
| QS Ranking | College | FT Ranking | College |
| 1 | Stanford Graduate School of Business, United States | 1 | Stanford Graduate School of Business |
| 2 | Harvard Business School, United States | 2 | Harvard Business School |
| 3 | Penn (Wharton), United States | 3 | INSEAD |
| 4 | London Business School, United Kingdom | 4 | University of Pennsylvania: Wharton |
| 5 | MIT (Sloan), United States | 5 | CEIBS |
| 6 | INSEAD | 6 | London Business School |
| 7 | HEC Paris, France | 7 | University of Chicago: Booth |
| 8 | Chicago (Booth), United States | 8 | MIT: Sloan |
| 9 | IE Business School, Spain | 9 | Columbia Business School |
| 10 | Columbia, United States | 10 | University of California at Berkeley |
How Much Will an MBA Cost?
With the proliferation in demand for MBA degrees across the world, the fee structure has gone extremely high for different MBA programs especially in the United States.
According to TopMBA, the tuition fees for a two year MBA can vary in the range of USD 60,000 to more than USD 120,000. For instance, the tuition fee for the elite business schools in the United States is more than USD 120,000.
For example, this is the cost of a 24 month MBA program at Harvard Business School. Similar tuition fees are found for the 24 month MBA program at Stanford and for the 21 month MBA program at Wharton School.
On the contrary, business schools including Kelley School of Business are relatively cheaper, costing around USD 51,182 for 12 months for Indiana residents and USD 74,084 for international students. For the 21 month MBA program from Tuck School of Business, the fee structure is fixed in the range of USD 70,000 – USD 80,000.
On the other hand, some of the full-time MBA courses in Europe are for 12 months, and even for 10 months at INSEAD. However, the 10 month MBA program at INSEAD still costs in the range of USD 100,000 – USD 110,000.
In India, the overall cost of pursuing an MBA is comparatively less than in other locations. According to the QS Global MBA Ranking, Indian Institute of Management, Ahmedabad (IIMA) is ranked 7th in Asia, Australia, and New Zealand. The cost structure for the 22-month program is pegged at USD 20,000 – USD 30,000. The average salary generated three months after graduating from the program is USD 44,457.
Similarly, Indian Institute of Management, Bangalore (IIMB) ranked 9th in the Asia Pacific region, wherein the cost of the 22 month MBA program is pegged at USD 30,000 – USD 40,000 with an average salary after three months of graduating reaching USD 36,660.
Moreover, application fees are one of the key factors within the cost factor for business schools. The potential candidates are expected to pay in the range of USD 100 to USD 275 per application to enroll for a business school.
The Specialization, Salary and Career Opportunity (SSC) as determinant MBA Performance
According to a survey conducted by the PayScale, selection of specialization plays a pivotal role in determining the future prospects and potential salary packages for an MBA graduate. Following are the five major MBA specializations favored by various MBA enthusiasts holding tremendous worth for an MBA.
MBA in Strategy
According to the survey, MBA with specialization in strategy earned the highest liking among the candidates. The median salary packages also remained remarkably high. The median early career pay stood at USD 96,000 whereas the mid-career pay stood at USD 149,000.
The top job positions associated with an MBA in the strategy include the following:
| Job Profile | Salary Range |
| Senior product manager | USD 71,000 – USD 174,000 |
| Management consultant | USD 78,000 – USD 166,000 |
| Senior strategy manager | USD 76,000 – USD 209,000 |
| Strategy consultant | USD 130,000 |
| Chief operating officer | USD 135,000 |
| Senior marketing manager | USD 133,000 |
| Business consultant | USD 90,000 |
Source: PayScale
The salaries also vary depending on the experience of the employee. Salaries based on experience for MBA in Strategy are outlined as follows:
| Period (year) | Salary |
| 0 – 1 | USD 75,000 |
| 1 – 4 | USD 77,000 |
| 5 – 9 | USD 99,000 |
| 10 – 19 | USD 130,000 |
| Greater than 20 | USD 160,000 |
Source: PayScale
There is also a gender gap in salaries of men and women, which can be evidence of a glass ceiling in the workplace. For example, salaries based on gender for MBA in Strategy are as follows:
| Gender | Salary Range |
| Men | USD 72,000-USD 148,000 |
| Women | USD 52,000-USD 135,000 |
Source: PayScale
Companies of different size also pay different salaries to their employees with MBA degrees. So, this must also be taken in to account when pursuing an MBA. Salaries based on top employing organizations for MBAs in Strategy are as follows:
| Organization | Salary Range |
| PricewaterhouseCoopers | USD 136,000-USD 185,000 |
| Booz, Allen, and Hamilton | USD 123,000 |
| USD 120,000 | |
| Amazon | USD 107,000-USD 152,000 |
| Intel | USD 76,000-USD 124,000 |
Source: PayScale
MBA in General and Strategic Management
According to the PayScale survey, MBA in General and Strategic Management is the second-highest sought after program amongst candidates. The median early career and mid-career salary stood at USD 85,000 and USD 146,000, respectively.
The top job positions associated with MBA in General and Strategic Management include the following:
| Job Profile | Salary Range |
| Chief executive officer | (USD 90,000-USD 350,000) |
| Management consultant | USD 73,000-USD 175,000 |
| Senior vice president (Operations) | Above USD 235,000 |
| Senior marketing manager | Above USD 133,000 |
| Senior business analyst | Above USD 67,000 |
| Vice president / general manager | Above USD 165,000 |
| Product management director | Above USD 145,000 |
Source: PayScale
When taking into account the experience of the employees with an MBA degree, the salaries of candidates with an MBA in General and Strategic Management vary as follows:
| Period (year) | Salary |
| 0 – 1 | USD 50,000 |
| 1 – 4 | USD 84,000 |
| 5 – 9 | USD 104,000 |
| 10 – 19 | USD 114,000 |
| Greater than 20 | USD 159,000 |
Source: PayScale
The gender wage gap is also observed as evidenced by the salaries based on gender for MBA in General and Strategic Management outlined below:
| Gender | Salary Range |
| Men | USD 66,000-USD 157,000 |
| Women | USD 51,000-USD 120,000 |
Source: PayScale
Salaries based on top employing organizations for MBAs in General and Strategic Management are as follows, and if you are pursuing an MBA degree, it is important to check the salaries at the company where you want to work at after completing your MBA.
| Organization | Salary Range |
| Visa | USD 145,000 |
| Amazon | USD 130,000 |
| Slalom Consulting | USD 121,000 |
| Booz, Allen, and Hamilton | USD 101,000 |
Source: PayScale
MBA in Entrepreneurship
According to the survey, the third most sought after MBA program for high salaries are in Entrepreneurship. The median early career salaries stood at USD 70,000 whereas mid-career salaries stood at USD 130,000. These salaries ensure that the average payback period of the MBA degree will be around two years.
The top job positions associated with an MBA in Entrepreneurship include the following
| Job Profile | Salary Range |
| Senior product manager | USD 98,000-USD 159,000 |
| Marketing director | USD 42,000-USD 235,000 |
| Product manager (software) | USD 65,000-USD 134,000 |
| Business development director | USD 127,000 |
| Business development manager | USD 82,000 |
| Chief financial officer | USD 117,000 |
| Director of operations | USD 92,000 |
Source: PayScale
Salaries based on experience for MBA in Entrepreneurship fall in the following range:
| Period (year) | Salary |
| 0 – 1 | USD 52,000 |
| 1 – 4 | USD 64,000 |
| 5 – 9 | USD 89,000 |
| 10 – 19 | USD 117,000 |
| Greater than 20 | USD 130,000 |
Source: PayScale
Salaries based on gender for MBA in Entrepreneurship also vary as follows:
| Gender | Salary Range |
| Men | USD 55,000 – USD 134,000 |
| Women | USD 41,000 – USD 107,000 |
Source: PayScale
Salaries based on top employing organizations for MBAs in Entrepreneurship can also differ significantly, and this will affect your return on the MBA degree and the payback period.
| Organization | Salary Range |
| Aluminum Company of America | USD 160,000 |
| Amazon | USD 129,000 |
| Control4 | USD 117,000 |
| MassMutual Financial Group | USD 102,000 |
| PNC Financial Services Group | USD 79,000 |
Source: PayScale
MBA in Corporate Finance
According to the survey, MBA in Corporate Finance is the fourth most sought after program amongst candidates wherein an MBA graduate can earn a median early career salary of around USD 78,000 and mid-career salary of around USD 138,000.
The top job positions associated with an MBA in Corporate Finance include the following
| Job Profile | Salary Range |
| Financial analyst | USD 49,000-USD 103,000 |
| Finance manager | USD 71,000-USD 133,000 |
| Senior financial analyst | USD 69,000-USD 108,000 |
| Chief financial officer | USD 89,000-USD 222,000 |
| Financial controller | USD 93,000 |
| Vice president (Finance) | USD 160,000 |
| Finance director | USD 142,000 |
Source: PayScale
Salaries based on experience for an MBA in Corporate Finance:
| Period (year) | Salary |
| 0 – 1 | USD 55,000 |
| 1 – 4 | USD 71,000 |
| 5 – 9 | USD 87,000 |
| 10 – 19 | USD 117,000 |
| Greater than 20 | USD 152,000 |
Source: PayScale
Salaries based on gender for an MBA in Corporate Finance
| Gender | Salary Range |
| Men | USD 59,000 – USD 132,000 |
| Women | USD 54,000 – USD 124,000 |
Source: PayScale
Salaries based on top employing organizations for MBAs in Corporate Finance
| Organization | Salary Range |
| Leidos | USD 86,000 |
| JP Morgan Chase | USD 85,000 |
| Ropes & Gray | USD 72,000 |
| Applied Systems | USD 63,000-USD 69,000 |
| Long Island University | USD 49,000 |
Source: PayScale
MBA in Finance and Economics: According to the survey, the fifth most sought after program amongst business management graduates is in Finance and Economics. The early career median salary stood at USD 67,000 whereas the mid-career median salary stood at USD 137,000.
The top job positions associated with an MBA in Finance and Economics include the following
| Job Profile | Salary Range |
| Financial analyst | USD 51,000-USD 364,000 |
| Portfolio manager | USD 110,000 |
| Finance manager | USD 116,000 |
| Director of operations | USD 120,000 |
| President | USD 190,000 |
| Senior business analyst | USD 93,000 |
| Project manager (IT) | USD 112,000 |
Source: PayScale
Salaries based on experience for an MBA in Finance and Economics:
| Period (year) | Salary |
| 1 – 4 | USD 60,000 |
| 5 – 9 | USD 90,000 |
| 10 – 19 | USD 101,000 |
| Greater than 20 | 133,000 |
Source: PayScale
Salaries based on gender for an MBA in Finance and Economics
| Gender | Salary Range |
| Men | USD 53,000-USD 133,000 |
| Women | USD 63,000-USD 133,000 |
Source: PayScale
Salaries based on top employing organizations for MBAs in Finance and Economics:
| Organization | Salary Range |
| Citibank | USD 170,000 |
| Morgan Stanley | USD 128,000 |
| Atkore International | USD 95,000 |
Source: PayScale
Pay Discrimination
According to research by Bloomberg, the skin color acts as a major factor in determining the salary package for an MBA. As per the research, the average starting salary package for all MBA candidates of top MBA colleges – including Harvard, Columbia, and Wharton – is USD 105,000.
However, seven years down the line, the salaries of white employees with MBA rise to around USD 172,000, whereas the salaries of black period and some ethnical minorities show a ceiling at USD 150,000. Moreover, the salary gap is biggest for Harvard where it stands at USD 97,800, and smallest for Wharton where it is USD 65,000. At the same time, for Columbia, the gap is at USD 80,400.
Value of Money
According to the statistics of FT Global MBA ranking 2019, value for money plays a pivotal role in the selection of an institute for MBA. The value for money is calculated based on the figures of salary earned by alumni, length of the course, fee structure and other costs.
| Ranking based on Value for Money | Business School | Country | Salary (USD) | Salary increase (%) |
| 1 | University of Florida: Warrington | US | 121000 | 151 |
| 2 | Durham University Business School | UK | 120556 | 110 |
| 3 | University of Cambridge: Judge | UK | 164636 | 98 |
| 4 | Melbourne Business School | Australia | 119098 | 87 |
| 5 | University of Oxford: Saïd | UK | 161646 | 118 |
| 6 | INSEAD | France / Singapore | 180527 | 104 |
| 7 | Brigham Young University: Marriott | US | 128213 | 138 |
| 8 | Pennsylvania State University: Smeal | US | 124220 | 134 |
| 9 | Warwick Business School | UK | 118406 | 83 |
| 10 | University College Dublin: Smurfit | Ireland | 116872 | 68 |
Source: FT Global MBA Rankings 2019
Pursuing an MBA can be translated as highly tedious, exorbitantly costly and a timely affair. It can only be worthy of the effort, expense and time if the candidate has made plans to work in a field of business or finance.
So the question remains, whether an MBA is still worth it? And the answer is Yes, an MBA is worthy of all the effort, expense and time, but there’s a catch. The catch is the selection of location, college, and specialization based on cost and benefit analysis. However, it is important to keep in mind that there is also discrimination based on gender and skin color. If you’re planning to pursue an MBA, select the top tier program. If MBA is a product, it is recommended to ‘buy’ the best quality product given the debt burden capacity, so that the utility derived from utilizing the product remains significantly high in the following years. It is also a good alternative to pursuing a PhD.
