The Economic Returns to an MBA

27 Pages Posted: 25 Jul 2008

See all articles by Peter Arcidiacono

Peter Arcidiacono

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Jane Cooley

affiliation not provided to SSRN

Andrew C. Hussey

affiliation not provided to SSRN

Abstract

Because MBA programs require work experience before admittance, prior wages can be exploited to disentangle the return to the degree from unobserved productivity. We find that controlling for individual fixed effects generally reduces the estimated returns to an MBA, particularly for those in top programs. However, for full-time MBA students attending schools outside of the top-25 the estimated returns are higher when we control for individual fixed effects. We show that there is some evidence that those who take the GMAT but do not obtain an MBA are stronger in dimensions such as workplace skills that are not easily measured.

Suggested Citation

Arcidiacono, Peter and Cooley, Jane and Hussey, Andrew C., The Economic Returns to an MBA. International Economic Review, Vol. 49, Issue 3, pp. 873-899, August 2008, Available at SSRN: https://ssrn.com/abstract=1175379 or http://dx.doi.org/10.1111/j.1468-2354.2008.00500.x

Peter Arcidiacono (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
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National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jane Cooley

affiliation not provided to SSRN

Andrew C. Hussey

affiliation not provided to SSRN ( email )

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