Does the type of business degree you get determine your salary?
Will you be caught short with the return of investment for your postgraduate degree? Source: Esther Tuttle/Unsplash

Data has shown that US companies are willing to pay MBA graduates significantly more than their peers with lesser qualifications.

A recent report by the Graduate Management Admission Council (GMAC), called Corporate Recruiters Survey 2018shows that the type of business degree you hold can have a “considerable impact” on the starting base salary you can command.

According to the findings, MBA graduates can expect a starting base salary of US$105,000 in 2018; a figure significantly higher than the US$85,000 offered to those direct-from-industry and US$65,000 for new hires with a bachelor’s degree.

GMAC analysed responses from 1,066 employers in 42 countries worldwide who work directly with participating business schools.

Source: GMAC

The report echoes US Bureau of Labor Statistics data which shows that, across all disciplines,  Americans with a master’s degree earn 19 percent more than those with a bachelor-level degree, while those with professional degrees earn 57 percent more.

Along with these findings comes the good news that more than four in five responding employers (81 percent) have plans to hire recent MBA graduates in 2018, despite slight declines in projected hiring among US and European employers.

The highest demand is seen in the Asia Pacific, where 90 percent of employers want to hire MBA graduates this year, numbers consistent with the demand seen last year. The location of employers also plays a role in the type of starting base salaries MBA graduates can expect.

American and European companies offer the top two highest median starting base for MBA graduates, at US$105,000 and US$65,000 respectively. Meanwhile, Asia-Pacific companies offer the lowest median starting base salary, at just US$35,000.

Companies in the Asia Pacific pay the lowest salaries for MBA graduates, according to the report. Source: Shutterstock

When both degree type and location is taken into account, an MBA graduate hired by a US company will be able to command the highest median starting salary (US$105,000), while those with a bachelor’s degree at Asia Pacific and Latin American companies will be offered the lowest (US$15,000).

This information should come in handy to prospective students deciding which postgraduate route to take and which university to choose. The value of postgraduate degrees, especially the MBA, has long been the de rigueur topic in higher education – and for good reason.

With student debt in most countries escalating, investing in graduate education is a bigger financial decision now than ever before, since most graduate students have other debts to shoulder, including mortgages, car loans, retirement savings etc.

One way to avoid being held hostage by another debt as you look into the cost of graduate school is to look for employers who offer tuition benefits, writes Cynthia Meyer for Forbes. Her younger sister, Caitlin Bauer advises:

“On a personal level, I’ve often advised acquaintances with whom I’ve spoken about grad school to maybe not go directly from undergrad unless absolutely necessary, but to try to find a job with an employer who will offer tuition benefits or even with a university where they could take at least part of their program for free or reduced cost.”

“… going to school full-time while working a full-time job is often not possible or practical, but it can be a more financially-savvy option.”

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