What is the Value of a Business Education?

According to a recent major study by Access Economics PTY Limited (2005) titled "Economic Value of University Business Education," the average business undergraduate degree generates an economic benefit for students of $498,794 as compared to $183,513 for the average of all other undergraduate degrees. Also, the benefit for a graduate business degree recipient is $659,726 as compared to the average of all other graduate degrees of $254,085. Business graduates benefit from higher starting salaries, greater compensation growth, more stable long-term employment, and a higher likelihood of participating in the workforce than nonbusiness graduates.

For graduate business degrees, the Graduate Management Admissions Council (GMAC) found that, on average, MBA recipients realized a 35% increase in their annual base salary with an average starting salary in 2006 of $92,360, as well as an average of over $17,000 as a signing bonus for their first post-MBA job offer. Other studies have found similar results -- no graduate program delivers more return for the investment than a qualified Master of Business Administration degree. In fact, the ROI on the MBA (Cline & Davis, 2005) is an average of at least $550,000 of lifetime earning power over other college graduates.Clearly, management education provides significant life-long economic benefit to business graduates.