Business schools

A pecking order for MBAs

America rules the roost

See the full ranking

See the full ranking

BUSINESS schools do not much like being ranked by outsiders. In recent years several have boycotted the lists drawn up by pesky media organisations, such as The Economist. But prospective students love these lists. Before plonking down $100,000 for a two-year MBA, they like to have some idea of what they are getting. Insiders at Bloomberg Businessweek joke that the magazine’s ranking of MBA courses is its “swimsuit edition”: like the issues of Sports Illustrated with scantily-clad women on the cover, it sells well.

A new ranking of full-time MBA programmes by The Economist finds that these are difficult times for business schools, especially European ones. MBAs who graduated in 2009 earned less than those who graduated the previous year. That had not happened for ages. Starting salaries of new MBAs from London Business School (LBS) dropped from $117,000 to $101,000. The number of LBS students who found work within three months of graduation fell from 91% to 81%.

European MBAs still outearn their American counterparts (see article), mainly because they are typically older and more experienced. But the gap between the two has narrowed. Starting salaries for graduates of many American schools have held steady. The University of Chicago’s Booth School of Business tops our ranking (which measures everything from the quality of the faculty to the students’ career prospects). Spurred by the dearth of jobs in finance, its careers advisers have been steering graduates into unfamiliar terrain, such as government and the non-profit world.

The number of MBA programmes is rising sharply, especially in developing countries. No one knows exactly how many there are. The Association to Advance Collegiate Schools of Business accredits more than 600. In India there may be millions of business students. With so many courses around, the only way for students to differentiate themselves is to aim for the most prestigious schools. These have grown even harder to enter.

As more and more MBA programmes spring up, Asian students are less likely to head westwards merely to attend a second-tier school. But Asian schools have their share of problems, too. Starting salaries for graduates of the Melbourne Business School, the region’s best, have also fallen.

Across the world the number of female MBA students remains stubbornly low. Overall, women outnumber men by a third at American and European universities. But less than a third of MBA students at the schools that The Economist surveyed were women. Sadly, that has barely changed since the ranking began almost a decade ago.

Correction to this article

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