There’s a lot of potential in earning an MBA. A potential new career. A potential new city or lifestyle. And—last, but certainly not least—a potentially higher salary. Despite the economic devastation caused by COVID-19, employer surveys show that an average 2020 MBA graduate earned a base salary of about $115,000. That’s more than double the earnings of someone with a bachelor’s degree, who takes home about $55,000 on average, according to the Graduate Management Admission Council’s 2020 Corporate Recruiters Survey.
While $115,000 remains a hefty salary for an MBA grad, there’s even more potential for higher earnings depending on which business school he or she attends. Base salaries are one of the main factors that Fortune uses as part of its full-time MBA rankings.
In 2020, the average MBA graduate from the University of Chicago’s Booth School of Business—which Fortune ranks No. 4 on its list of full-time MBA programs in the U.S.—earned $147,977, with the class’s median base salary landing right at $150,000. With a median sign-on bonus of $30,000, Booth alumni can earn nearly $200,000 directly after graduation. The average salary for Chicago Booth grads has jumped 47% over the past decade, from $102,000 in 2010.
Of the 498 students from Booth’s class of 2020 who were seeking employment, 92.8% had received a job offer within three months after graduation. The two most-represented industries were consulting (174 grads hired) and finance (138 grads hired), with median salaries of $165,000 and $150,000, respectively.
You could nearly double your salary
The top three management consulting companies—Bain & Co., Boston Consulting Group (BCG), and McKinsey & Co.—in 2021 had base salaries of $90,000 for consultants with only a bachelor’s degree, according to Management Consulted, a company that offers prep and training for professionals entering the consulting industry.
For candidates with an MBA degree, however, the base salary jumped to $165,000 for all three companies with earning potential reaching $200,000 and up, including bonuses and relocation costs. The three major employers for Chicago Booth’s 2020 class were Bain, BCG, and McKinsey, according to the business school’s 2020 employment report. But why do MBA employees earn nearly double the amount their colleagues with just a bachelor’s degree earn?
“In my estimation, it’s not that the hard skills of MBAs are so much better, but they have more experience translating that analytical rigor into actionable insights,” says Namaan Mian, a director with Management Consulted. “That’s really where the soft skills and the communication, the leadership, the stakeholder management comes in.”
Chicago Booth MBAs who pursue jobs in finance also see higher postgraduation salaries. According to PayScale, the average salary for an MBA graduate in finance is $98,000. At Booth, it’s $150,000. In 2020, PricewaterhouseCoopers (PwC) hired 13 Chicago Booth MBAs; Credit Suisse hired seven; and Bank of America, Goldman Sachs Group, Citigroup, JPMorgan Chase, and Morgan Stanley each hired six Booth grads.
‘The great equalizer’
And, according to Chicago Booth’s 2020 class analysis, the number of years of work experience an MBA grad had prior to the program didn’t have much of an effect on earnings postgrad. Chicago Booth grads with one to three years of work experience reported a median salary of $152,500, and grads with three to five years of work experience reported a $150,000 median salary. Those with more than five years of work experience reported the same.
“That’s why the MBA is the great equalizer,” Mian says. “If you can go get an MBA earlier on in your career, you’re really accelerating your move up the career ladder.”
