The Graduate Management Admission Council, the owners of the GMAT, released a survey of MBA and other graduate b-school alumni yesterday that showed overall pay now tops $94,500, well above the pre-recession level of $89,000 in 2007. It also showed that the percentage of employed alumni is up on a year-over-year basis. Good news for MBAs, right?
Well, GMAC thinks it is. But a closer look reveals a mixed bag.
First, let’s take a look at how GMAC did this study. The survey covered alumni who received their degrees between 2000 and 2010, and who participated in previous GMAC studies. The survey was conducted in September 2010 and there were 3,490 responses.
I’m not a statistician, but it seems to me that the methodology has a few shortcomings. First, it has a built-in bias toward wage growth. Instead of holding everything constant (the number of responses for each graduation year, the number of responses from each industry) the end result is determined by the individuals who happen to answer the survey. As GMAC readily admits, if a lot of people from the early years answer, their higher wages will skew the average salary higher. (Fifty-eight percent of respondents to the September survey got their degrees in 2008 or earlier.) Ditto if a lot of people with high-paying consulting or financial services jobs happen to answer. (About a third of the respondents came from those industries.)
Read the full article: MBA Pay is Up! Maybe