Harvard Business School is the most expensive full-time MBA program, with tuition and required fees eclipsing $106,000 for two years. It’s a big investment, but it pays off: HBS grads earn more money over the span of their careers than grads from any other MBA program. "It’s the trickle down effect," says Robert Dammon, associate dean and professor of financial economics at Carnegie Mellon University’s Tepper School of Business. "The kinds of students that the best schools attract are going to get the highest-paying jobs."
With few exceptions, Dammon is correct. The top-ranked — and most expensive — MBA programs produce the highest-salaried grads over the span of their careers, according to research commissioned by Bloomberg Businessweek. For the second year, Bloomberg Businessweek asked PayScale.com, a company that collects salary data from individuals through online pay comparison tools, to use its database of 23,000 MBA graduates at the top 45 U.S. business schools to calculate their median cash compensation — salaries and bonuses — around graduation and after they have an average of 5, 10, 15, and 20 years of work experience in the same industry. Bloomberg Businessweek used that data to calculate an estimate of median cash earnings over the entire 20-year span.
On average, MBAs from the top 45 B-schools will make around $2.5 million in base pay and bonuses over the course of a 20-year career. But there are great differences between the total compensation of the schools at the top of the list compared with those closer to the bottom, especially as MBAs move deeper into their careers. An MBA grad from Harvard, for instance, will earn nearly $4 million over the span of two decades. A grad from the University of Iowa’s Tippie College of Business will earn less than half that. Newly minted MBAs at some top programs, such as Yale, earn high starting salaries but experience only a minimal increase over time. At other schools, such as the University of Connecticut, MBA grads more than double their salaries over the 20-year period.
by Geoff Gloeckler
Friday, June 4, 2010