MBA Schools: Whose Graduates Earn High Salaries?

Masters of Business Administration (MBA) programs promise expanded career opportunities and the potential to bring home the big bucks.

Lindsey Gerdes at BusinessWeek recently worked with us on an intriguing story about pay for MBA graduates. Using BusinessWeek's Ranking of the top 45 business schools, we looked in our data to see how each school's graduates are paid over the course of their careers.

Not surprisingly, graduates of the top ranked programs often earn the highest pay, but several lower ranked programs have graduates who can more than double their starting pay in their later careers.

In this post, we will look at a few of the interesting tidbits we discovered while researching MBA pay.

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MBA Pay Down with More Experience?

We focus on median pay as the range in pay for MBA graduates is quite extensive. By using the median, these outliers will not affect our final numbers. For a description of median pay versus average (mean) pay see a previous Dr. Salary Blog Post.

What may surprise you is that several schools' graduates have a median starting pay (2.5 years experience) that is higher than their pay after 5 years in the field.

The main reason for this is a high fraction of these schools' MBA grads who are hired on Wall Street and by national consulting companies for high-paying, but short-term, positions.

Overall, 6 schools had a drop in pay between 2.5 and 5 years of experience in our data:

  • Dartmouth College – Tuck School of Business; drop of 6%
  • University of Michigan; drop of 4%
  • University of Pennsylvania – Wharton; drop of 2%
  • Cornell University; drop of 2%
  • University of Minnesota; drop of 2%
  • University of Virginia; drop of 1%

Graduates from these schools are often recruited by companies in financial services and consulting programs. For example, some of the top recruiting companies for Michigan last year were McKinsey & Company, The Boston Consulting Group (BCG), Deloitte Consulting, LLP, Citi, Bank of America, and Booz & Company.

Many of these companies are looking for recent MBA grads to fill high-paying (and high-stress) short-term associate positions. These positions often come with a large bonus and pay, but long working hours.

These jobs generally have high attrition rates as they can preclude a life outside of work. After a couple of years, the graduate may switch to a new employer or job at lower pay. This change exerts a downward force on median pay. It may be attributed to fewer working hours, less travel requirements, and/or a smaller employer. Some may even choose to move into non-profit positions, which can offer large charitable rewards, but limited financial rewards.

Note that the rate of increase for the rest of top 45 varied from flat to significant increases in pay from starting to 5 years. This reflects the fact that, further down the list, MBA grads tend to take more jobs with lower starting pay, but also better longer term prospects at the first company they work for.

5, 10, 15, 20 Experience = Years Ago Graduated

Another interesting point is in response to a comment on the article, "[The survey results] do not track the same graduates over time? What an absurd assumption."

People generally care about (and can relate to) pay today, not pay 20 years ago, or pay 20 years in the future. All of the pay data included in the article comes from the past year and is thus current. By using current numbers, any graduate from one of the 45 schools can compare their pay to the median pay reported. It does not matter if they just graduated, or graduated 10 years ago — they care about their pay now.

Besides the main article, our data were also used in the BusinessWeek slideshow about MBA alumni, and BW used our data to create an interactive table of median MBA pay for graduates from the top 45 programs with 2.5 (starting), 5, 10, 15, and 20 years of experience in their respective fields.

Are you curious about the pay you could receive with your MBA degree? Do you wonder how pay may differ across employers or positions? The PayScale Salary Calculator is a quick and easy way to compare pay across jobs. When you want powerful salary data and comparisons customized for your exact position, job offer, and degree, be sure to build a complete profile by taking PayScale's Full Salary Survey.


Katie Bardaro
Research Analyst, PayScale, Inc.