Higher education has long been seen as a gateway to a better future—including a better paying job and more earning potential throughout your life—and the average MBA graduate salary is certainly a reason to consider attending business school. Even as the cost of attending some schools increases, the financial and networking benefits of the degree over the course of your professional career are often worth the expense (and the blood, sweat, and tears you will put into your degree program).
Several different publications and organizations provide estimates for the average MBA graduate salary (based on 2019 graduates):
- $134,991, the highest estimated average comes from the MBA industry publication Poets & Quants1
- $106,757 according to U.S. News and World Report, which calculated the average starting salary and bonuses from the 129 ranked full-time MBA programs that provided data2
- $88,428 according to the jobs and salaries website PayScale, estimating average salaries at about 17 percent lower than U.S. News and World Report3
- $84,580 for MBA graduates, according to the National Association of Colleges and Employers (NACE)4
No matter which estimates you use, the starting salary for an MBA graduate is still at least $20,000 higher than the starting salary for someone with a bachelor’s degree in business.4 Below are a couple factors that may influence your salary after graduating from an MBA program.
The Industry You Work In
It probably comes as no surprise that different industries pay different starting salaries for an MBA graduate. Employers in the consulting field compete fiercely for MBA graduates and offer the highest industry-average starting salaries at over $140,000. If you decide to go into nonprofit management with your MBA, even in a high-level position like executive director, you can expect a lower average salary ($86,840). There are also government jobs available with an MBA—for example, an accountant, financial analyst, or economist at a federal agency like the Department of Treasury, a chief administrative officer in a public health department, or a county budget director. However, you can expect a lower average starting salary than other industries at just $74,825.1
Industries with six-figure starting salary averages for MBA graduates, according to U.S. News and World Report rankings, include:
- Financial services
- Real estate
- Media and entertainment
- Consumer packaged goods
- Transportation and logistics
Post-graduation salaries are also dependent on your level of experience in your field. For example, an MBA graduate with emphasis in finance who has enough experience to land a job as a chief financial officer (CFO) will command an average salary of $151,000. Someone with less experience who secures their first post-MBA job as a senior financial analyst can expect to make around $83,000.2
Where You Plan to Live and Work After Graduation
Where you want to live and work after you earn an MBA will also influence how much you can expect to make. States with higher average cost of living—such as New York, Massachusetts, and Washington—also have higher average salaries for jobs that require or prefer an MBA.5
States with a higher concentration of large businesses (usually more populated urban areas) often have more total jobs available, and salaries are usually higher than suburban or rural areas in the United States. That doesn’t mean you can’t find a job with your MBA degree outside big cities like Los Angeles, San Francisco, and Seattle, but looking for employment in smaller towns or more rural areas does mean you may need to adjust your starting salary expectations. It’s also important to factor in things like cost of living and quality of life in addition to a salary offer. For example, when you factor in cost of living, a starting salary of $60,000 in Wichita, Kansas, is comparatively higher than $120,000 in New York City.
Other Things to Consider When Choosing an MBA Program
While prestige and name recognition might influence your career prospects and salary after graduation, the cost of tuition, relocation, and commuting for some MBA programs can be prohibitive for many students. In turn, this could negate some of the salary gains you can expect after you finish your degree. However, opting for online courses or an online MBA can alleviate the burden of cost and energy.
One final thing to research is the employment rate for graduates from the school you plan to attend. Higher starting salaries do not always coincide with higher employment rates. Stanford and Harvard both have average starting salaries at the top of the spectrum, but other MBA programs have higher employment rates for their students three months after graduation.2
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1. Retrieved September 15, 2020 from poetsandquants.com/2020/03/25/the-highest-paid-mba-grads-at-the-top-25-b-schools/
2. Retrieved September 15, 2020 from usnews.com/education/best-graduate-schools/top-business-schools/articles/mba-salary-jobs
3. Retrieved September 15, 2020 from payscale.com/research/US/Degree=Master_of_BusinessAdministration(MBA)/Salary
4. Retrieved September 15, 2020 from naceweb.org/job-market/compensation/average-salary-for-class-of-2019-up-almost-6-percent-over-class-of-2018s/
5. Retrieved September 15, 2020 from ziprecruiter.com/Salaries/What-Is-the-Average-MBA-Salary-by-State