Georgetown University Report Measures Earning Power: MBA News

The educational path chosen by students in the US can greatly impact on their subsequent earning potential. Fortunately (for a lot of our readers at least), those who major in business were found to be at the higher end of the spectrum in a report released last week by the Georgetown University Center on Education and the Workforce. And, for those opt to pursue a graduate degree – such as the MBA or specialized management master’s - the monetary rewards are even greater.

The report, The Economic Value of College Majors, looked at US Census Bureau data spanning four years from 2009-2013 and analyzed lifetime median wages of college-educated workers between the ages of 25 and 59.

“We’ve known for a while that all degrees are not created equal, that your major has a large effect on your ability to get a job and work your way up a career ladder,” affirmed Anthony P. Carnevale, lead author of the report and director of the center at Georgetown University.

From business majors to graduate degree holders

In the Georgetown University report, business was found to be the single most popular major (area of focus) at undergraduate level, accounting for 26% of all college graduates, ahead of the STEM field’s 20%.

Business majors were then found to be among the least likely to go on to pursue a graduate degree (22%). On the other hand, 58% of biology and life science majors go on to postgraduate education.

However, business majors who do take a graduate degree in the field are rewarded with salaries that are 33% or US$22,000 higher than among those who call it quits after receiving their bachelor’s qualification (based on median wage distribution of graduates aged 25-59).

Georgetown University analysis tracks graduates’ earning power

To surmise, business majors took in an average of US$37k in entry-level positions after graduating before progressing to an average of US$65k across the 25-59 age range. This is comfortably above the ‘all-subject’ averages of US$33k and US$61k, but some distance behind the US$50k and US$83k recouped by those majoring in the areas of engineering and architecture – which account for many of the highest-paying majors.  However, the Georgetown University data also showed that those who had undertaken graduate-level business education commanded salaries closer to US$90,000 (again, based on median wages).

While this clearly illustrates the value of graduate-level business education, the report’s inclusion of all degrees means that these salary rises are not quite as high as you’d see if you were to consider the big daddy of graduate-level business education – our friend the MBA - in isolation. Also important is the fact that a student won’t necessarily be taking the subject of their major onto a postgraduate platform – to put it another way, master’s level students are often studying in different fields to their undergraduate major – and this is particularly true of MBA students.

Even so, a great deal of variation can already be found across subject categories included in Georgetown University’s definition of the business subject area. Graduate degree holders in finance, for instance, stand to earn 40% (US$29k) more than their undergraduate counterparts, yet those studying management information systems and statistics only see a rise of 20% (US$15k) in earnings from their graduate degrees. Both of these categories, however, were among the highest-paying business majors at bachelor’s level.