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 (Tepper Full-Time MBA Profile). "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-rankedâ??and most expensiveâ??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, 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 compensationâ??salaries and bonusesâ??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 (Harvard Full-Time MBA Profile), 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 (Tippie Full-Time MBA Profile) will earn less than half that.Newly minted MBAs at some top programs, such as Yale (Yale Full-Time MBA Profile), earn high starting salaries but experience only a minimal increase over time. At other schools, such as the University of Connecticut (Connecticut Full-Time MBA Profile), MBA grads more than double their salaries over the 20-year period.
The numbers suffer from some inherent limitationsâ??they don't include stock or options, and the pay data for some smaller schools at the 20-year mark may be based on fewer than 100 pay reports. The data also do not track the same graduates over time; they reflect the experience of individuals who graduated at various points throughout the last 20 years. And of course they don't predict the future. The data are useful, though, to get a sense of how grads from top MBA programs fare when it comes to compensation over the span of a career.
Based on the survey data, MBA grads from Harvard earn the mostâ??a median of $3,867,903â??over those 20 years. Harvard is followed by the University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), where grads earn $3,491,371 over their careers, then Columbia Business School (Columbia Full-Time MBA Profile), with a total career compensation of $3,349,669.
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