Recently published research has inspired impassioned debates on college and university campuses nationwide, including in North Texas, by claiming that the average master of business administration (MBA) degree raises a student’s net lifetime earnings by only 1% after accounting for tuition and other factors.
Citing that finding from the National Bureau of Economic Research (NBER), a report in Forbes (https://bit.ly/FORBESMBA) went so far as to assert that hundreds of thousands of MBA students may be “chasing illusory value.” Yet the insights gained during a career in business education suggest the opposite is true.
Having spent nearly 30 years leading business programs at both private and public institutions, I have watched hundreds of students dramatically change the trajectory of their lives, careers, and income by completing an MBA.
What the NBER did not factor into its study is the impact that scholarships, progressive curricula, and career guidance can have on an MBA candidate. Simply put, high-quality MBA programs recruit students whom the degree is most likely to benefit.
At the same time, many MBA programs are also chasing illusory “top business school” rankings that reward the practice of admitting students who are more likely to attain the largest post-degree salaries.
But that is not necessarily a reliable or comprehensive indicator of success.
For instance, those who pursue for-profit MBAs versus not-for-profit MBAs have different goals, ranging from income to social impact.
Aspiring business students have the opportunity to choose a program that understands their background, complements their knowledge assets, and prepares them for an employment future that aligns with their unique ambitions.
Particularly in the COVID-19 era, MBA graduates may also help determine which businesses thrive and which businesses close.
Graduate business programs provide students with a multitude of high-end analytical skills, but also teach students how to identify and solve the most pressing problems businesses face. With the U.S. economy in the midst of deep uncertainty, and with businesses attempting to stabilize themselves, an MBA skill set can help emerging leaders uncover the root causes of problems, identify meaningful solutions, and measure outcomes.
The business schools most likely to deliver value in a post-pandemic world will be those that embrace new technology to deliver their degree programs, continue to engage students despite limitations on face-to-face interaction, and understand how the business world has changed.
Texas has a well-deserved reputation for resilience in tough times. Nothing seems to scare a business in this state. Admittedly, we are facing the same surging unemployment plaguing the rest of America. But we also have a can-do mindset that affirms we can tackle any challenge. This attitude helps sustain Texans and their economy in the best of times and worst of times.
Despite the ongoing global turmoil, The University of Texas at Dallas has experienced an increase in applicants to its full-time MBA program this year. That is unprecedented proof of the value of an MBA. It also affirms that business education and other fields can achieve the impossible, even at a time when impossible feels like the norm.
Monica Powell, Ph.D., is senior associate dean and graduate dean for the Naveen Jindal School of Management at The University of Texas at Dallas. She is a member of Liaison International’s Business CAS Advisory Board.