MBA Still Leads to Higher Earnings

The assumption amongst potential MBA applicants that these courses would inevitably lead to much higher earnings took a dent after the MBA ‘boom' of the 1990s. However, even with a return to more ‘realistic' salaries and ever increasing numbers of MBA graduates, successfully completing an MBA can still lead to higher than average earnings.

Taking the UK as typical of a mature, established economy with a relatively high proportion of MBA graduates, then the salary position of MBA holders still looks robust to say the least.

A survey conducted for the Association of MBAs (AMBA – www.mbaworld.com) in 2006 showed that the average rise in salaries for MBA graduates was some 19% (above the general graduate average) immediately on qualifying. Looking at salaries a few years down-line, then MBA graduates seem to maintain their salary advantage as a result of factors such as earlier and more rapid promotion.

Yet the method of study also seemed to influence the rate or scale of higher salaries. Those who had undertaken a part-time MBA or by distance learning had an average salary of around £57,000 to over £62,000. However those who had undertaken an Executive MBA were earning an average of just under £66,000, whilst full-time MBA graduates fared best at an average of almost £76,000 for graduates of a one year program, and almost £79,000 for those who had completed a two year full-time MBA.

In general, the earning power of an MBA in the UK still appears impressive. Only 5% of MBA graduates were earning less than £30,000 in 2006. Some 30% were earning between £30,000 and £50,000, a healthy 38% were earning between £50,000 and £80,000 and 15% earned between £80 and £100,000. An impressive 12% of MBA graduates were earning £100,000 or above.

If MBA earnings still show a healthy positive differential in a mature economy such as Britain, then the economic argument for an MBA remains powerful. If you factor in the increased career and promotion prospects that MBAs seem to offer, then doing a job you enjoy more and get paid more for doing it, seems to come as part of the MBA package. It might be a safe assumption that possessing an MBA in a newer, emerging economy where there might be fewer other MBA graduates, should make the qualification even more of a sensible investment.

 

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