Which Graduate Degrees Are the Best Investment? (Why I Skipped My MBA)
When I was 27 years old I was at a crossroads. I was five years into my career, yet I was stagnating. Though I was making six figures, which was great for my 20s, I knew I couldn't make much more at my job. Without an advanced degree, my future compensation would be an endless chain of 3% annual "cost of living" adjustments and nothing more. At that moment, I knew I had to make a change. So I…
At 27 years old, the author found themselves at a career crossroads, making six figures but feeling stuck. They considered pursuing an MBA, but research revealed that the post-MBA salary increase in 2017 was minimal compared to their current earnings. The author questioned whether the higher salary was due to the MBA degree or their increased experience and age, a concept known as a counterfactual.
To determine the value of an MBA, one must compare the earnings of MBA graduates to those who did not pursue an MBA but had similar backgrounds. However, it is impossible to know the exact counterfactual. The author concluded that the ROI of an MBA is often overestimated because MBA graduates typically come from high-earning undergraduate majors, which inflate their comparison earnings.
The author noted that only 64% of MBA programs had a negative ROI, making it the second-worst performing master's degree in terms of financial return. However, top-ranked MBA programs generally have a higher ROI. The author highlighted that the highest ROI graduate degrees are professional degrees in law, medicine, and dentistry, with medical and law degrees having lifetime ROIs exceeding $1 million.
Despite the high costs, the earnings premium associated with these degrees often outweighs the expense.
Written by urgent.news from Of Dollars and Data's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
