Whether or not graduate school is worth the cost is a topic with more than one answer. Depending on who you talk to, a master’s degree can fall into the “best decision I’ve ever made” category or worst case, leave you wishing you hadn’t filled out an application in the first place.
While data from the Bureau of Labor Statistics (BLS) shows that, on average, workers with master’s degrees earn more and experience lower unemployment rates than those without them, some master’s degrees don’t offer as significant of a bump in pay as one would think—particularly in areas like social science and the humanities.
For example, according to Payscale, workers who hold a bachelor’s of fine arts degree (BFA) pull in an average salary of $55,000 per year. With a master’s degree in the same subject area (MFA), their average salary increases by a measly $5,000 per year. Social work is another instance. A bachelor’s of social work (BSW) ensures workers in the field an average of $39,814 annually, on average. With a master’s in social work (MSW), the average extends to $46,836 per year—just over $7,000 more (which doesn’t leave much to pay off student loans).
In cases like these, a master’s degree may not be so much a platform to ensure a hefty salary increase as it is necessary to secure certain positions and professional licensure in your desired field. An MFA, for one, is particularly helpful for landing teaching or assistant professor jobs. An MSW is required to provide clinically-focused services across a range of social work specializations.
What about business? As it turns out, entering (or returning to) the workforce as a business school graduate has a solid reputation for not only opening new doors in the field but also nearly guaranteeing a salary boost. Here’s how.
When it comes to maximizing earning potential with a master’s degree, those who work in business—as well as those in technology or science-related professions—are the most likely to experience a significant monetary benefit throughout their careers.
A 2015 study from the Center on Education and the Workforce at Georgetown University on the economic value of postsecondary degrees reports that college graduates with a bachelor’s degree earn a median annual salary of $61,000, while those with a graduate degree earn a median $78,000.
With a business focus, those benefits increase, particularly for master’s degree holders. College graduates with a bachelor’s degree in business pull in a median salary of $65,000, while those who’ve completed a graduate program in the field can expect a median of $87,000. It’s an impressive 34 percent increase in salary.
The National Association of Colleges and Employers predicted an average starting salary for 2019 MBA graduates of $84,580—provided those graduates found jobs in computer science, engineering, science, or business. (
Students considering an MBA or graduate business degree can choose from varied career paths, including those focused on financial management, data analytics, market research, healthcare management, and operations management. The analytical skills and problem-solving techniques gained from graduate level business degrees are in high demand across business sectors. ( )
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While a master’s of business administration (MBA) may be lauded for its ability to equip students with business skills that can be leveraged in many professional situations and settings, many aspiring students may have specific career interests and personal goals that are better suited to specialized programs in the field.
In 2018, the National Association of Colleges and Employers (NACE) conducted a salary survey of graduates who earned both bachelor’s and master’s degrees in business-related fields. The survey found substantial differences in average salary between the degree types, depending on business specialty.
Results from the Graduate Management Admission Council’s (GMAC) 2019 Corporate Recruiters Survey reveal that 77 percent of U.S. companies planned to hire MBA graduates last year. Additionally, a majority of Fortune 100 and 500 companies planned to hire candidates with a master’s degree in management while one in three U.S. employers planned to hire business school graduates with a master’s in finance degree.
What’s more, the survey also indicates that the median annual base starting salary U.S. companies offered new MBA hires in 2019 was $115,000. It’s GMAC’s highest MBA starting salary on record—and notably higher than the median $75,000 offered to direct-from-industry hires. It’s also more than double the median $55,000 offered to new bachelor’s degree hires.
Given the findings, a master’s degree may seem like the de facto requirement in the world of top business salaries. But look deeper, and you’ll find that it’s not enough for b-school graduates with their sights set on executive-level pay.
While many in the c-suite—such as chief executive officers (CEOs) and chief financial officers (CFOs), among a wide scope of other roles—are likely to possess an advanced business degree, they almost always do so in combination with extensive work experience.
Not all companies hire from within for the C-suite, but in many cases, high-level managers can compete to land a position among the most important and influential group of individuals within their organization. The process requires candidates to work aggressively to finely-tune their management and leadership skills, cultivate their vision for company success, and seek out insight from professionals on the high rungs of the corporate ladder.
As it turns out, some business schools may offer their graduates a greater chance of lucrative income than others. Among the 130 ranked full-time MBA programs that reported data to U.S. News and World Report’s 2020 list of best business schools, the average salary and bonus paid to their 2018 graduates amounted to $102,495.
That average is even higher for graduates of highly selective schools. All of the ten MBA programs that offered a path to the most generous starting salaries in 2018 are listed as part of the publication’s highest-ranking programs in 2020. Among this group, the average salary and bonus totaled $166,999.
Business schools at the bottom-fourth of the U.S. News’ rankings—or not ranked at all—reported an average compensation of $53,464 in 2018, or less than a third of what graduates from top-tier schools received.
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