Tags: MBA | loses | earning | power

FT: MBA Degrees Lose Earning Power for Their Holders

By Dan Weil   |   Tuesday, 29 Jan 2013 12:37 PM

Traditionally, those who attended top U.S. business schools could count on huge salary increases in the first few years after they received their MBA degree. But no more.

Graduates from top U.S. MBA programs in the mid-1990s enjoyed a tripling of their salaries in the first five years after graduation. But those who graduated in 2008 and 2009 suffered a 50 percent reduction in that increase, according to data compiled by the Financial Times.

And while salaries are dropping for the graduates, their school costs are rising 7 percent a year.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

Students who began MBA programs in 2012 shelled out 62 percent more for their education than did those who began in 2005, while their salary increases only match inflation, according to the Times.

The average two-year cost for MBA students, excluding living expenses, totals $106,000 for those who began in 2012.

There is something for women to cheer about in the data. The salaries they earn three years after graduating business school now trail men’s salaries by $10,000, compared with $22,000 last year.

In general, “An MBA is a club that is now not exclusive,” Brooks Holtom, a management professor at Georgetown University’s business school, tells The Wall Street Journal. “You should not assume that this less exclusive club is going to confer the same benefits.”

Things are especially difficult for graduates outside the top schools, Stanford Business School professor Paul Oyer tells the paper.

Editor's Note:
Startling Proof of the End of America’s Middle Class. Details in the Video

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