Edmonton Journal

Want a business degree? Start early

The pay bump from getting an MBA levels off around age 30, survey finds

- Natalie Kitroeff and Jonathan Rodkin

Business school is a profitable decision but less so as students approach their 30s.

An analysis of data collected by Bloomberg suggests that getting a master’s in business results in a pay bump that increases the older a graduate is — until he or she hits 30.

As part of its ranking of full-time MBA programs, Bloomberg surveyed more than 10,000 people who expected to graduate business school in 2014.

The ages and starting compensati­on for people who had jobs lined up when they graduated show that in one’s mid-20s, paycheques bump up for every year of age, which makes some intuitive sense — a 28-year-old might have more experience and education than a 24-year-old.

Surprising­ly, though, age stops giving graduates a pay advantage fairly quickly.

Pay levels hover in the mid-$120,000s range between ages 28 and 34, peaking at age 30, and then begin to drop off steadily, falling to $110,000 US at ages 36 and 37.

The typical 26-year-old graduate earned $14,000 US more than the typical 25-year-old, who earned $22,500 more than the typical 24-year-old.

Older graduates also have a clear disadvanta­ge when it comes to the gap between what they earned before getting an MBA and after.

Looking at those pay bumps offers a better sense of how big an advantage an MBA brings than the compensati­on figures and paints a more striking picture of how helpful an MBA is, in salary terms, as students age.

Compensati­on bumps get smaller with each year of age, reflecting the fact that older MBAs tend to enter their programs with higher salaries, making their post-B-School pay increase less dramatic.

Of course, it isn’t as if the ancient 30-somethings are getting nothing out of their time on campus. The typical 37-year-old got a 37-percent pay bump after finishing school.

Compared with the youth, though, that uptick does not seem impressive.

Twenty-nine-year-olds saw their compensati­on balloon by a median of 81 per cent, and 25-year-olds enjoyed an enviable 130 per cent pay increase.

The upshot for people mulling a degree in business? Start early, when you can still feel superior to people your boss’s age.

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