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Wealth

Commencement ceremonies at the Harvard Business School—a good hedge against inflation (Photo by Rick Friedman/rickfriedman.com/Corbis via Getty Images)

By Savannah Young Leaders Staff

Savannah Young

News Writer

Savannah Young is a news writer for Leaders Media. Previously, she was a digital reporter for WATE Channel 6 (ABC)...

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Mar 13, 2023

The Race Between an MBA Degree And Inflation

Many higher-education institutions attempt to lure new MBA students as the tech sector continues layoffs, but many are skeptical that a master’s in business will not outpace inflation.

Key Details

  • Business schools have seen a 25% fall in MBA applications in the last two years as inflation has skyrocketed prices.
  • In 2022, the median salary gain between students’ pre-MBA jobs and their first job after graduation was $85k. Between 2018 and 2022, the median growth in MBA earnings was 28.1%, compared to 18.7% for all U.S. workers and 17.6% for inflation, according to Bloomberg studies.
  • Between 2018 and 2022, there was nearly a 50/50 split between MBA graduates who reported entering a field where the median growth in compensation did or did not keep up with inflation prices.

Why it’s important

Inflation has boosted prices of numerous things across the nation. One of the newest being examined is whether getting a master’s degree in business can help graduates obtain a job that beats inflation.

For decades it has been said that the highest amount of education will help graduates get a better job with better pay and benefits, but in the last few years, that has been questionable as inflation sends prices skyrocketing and many businesses are laying off thousands of employees. 

The average MBA cost ranges from $52,550 to $155,022 per year, with an average of two years to complete the program. The pay for a master’s grad usually outweighs the cost of the price of schooling, but in the last few years, high inflation has sent admissions dropping.

Many business schools have seen dropping admissions rates, and with the tech sector laying off thousands of employees, many schools have been targeting the newly unemployed to get back into school and obtain a master’s degree.

Multiple colleges have dropped admission requirements such as test scores and application payments to lure more people into applying, but many are skeptical if the degree will help bring in more money.
Studies have shown that although master’s graduates aren’t outpacing inflation as much as they did in previous years, their salaries are still higher than inflation.From 2018 to 2022, inflation was 17.6%, well below MBA salary increases of 28.1% to $205,000 a year from $160,000, according to Bloomberg.

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