Measuring the Economic Value of Pre-MBA Work Experience

Abstract

Pre-MBA work experience is required for admission to many graduate schools of business. In the present study, MBA graduates with a wide range of pre-MBA work experience were surveyed to assess the economic value of such work experience. No evidence was found of a systematic financial advantage to students from working for several years before enrolling in a full-time MBA program. Although students with less work experience had lower starting salaries, the difference was overcome by the advantage of getting an early start on their careers. Results suggest prospective MBA students may incur a long-term financial penalty by delaying their matriculation.

Keywords:

• MBA return on investment
• MBA salary
• Pre-MBA work experience
• Value of MBA

ACKNOWLEDGMENTS

We thank the following individuals for their suggestions and contributions to this research: Dean Craig McAllaster, Associate Dean Steve Gauthier, and Prof. Clay Singleton at Rollins College; Dean Mark Zupan and Prof. Jim Brickley at the University of Rochester; Prof. Tom Dyckman at Cornell University; and Senior Associate Dean Robert Hansen at Dartmouth College. This research was sponsored by grants from the Edyth Bush Foundation and from the Roy E. Crummer Graduate School of Business at Rollins College.

Notes

*2006 Pay may be less than Fifth-Year Pay because 2006 occurred less than 5 years from graduation for some respondents.

**Gain was first calculated individually for each respondent and then averaged to provide these values.

*Tuition = 25,000 per year.

**Actual values from Table 2.