US study says MBA programmes are not necessarily good for your wealth

Every year more than 100,000 graduates emerge from MBA programmes hoping to conquer the business world and quickly recoup the tens of thousands of pounds they have spent on their studies.

However, a new study suggests that becoming a Master of Business Administration may not guarantee success or even higher future salaries, according to new research by a leading American academic into the value of the degree.

In a study to be published this autumn, Jeffrey Pfeffer, a professor at Stanford University's business school, challenged the assumption that workers with MBA degrees have more successful careers than those that do not. Writing in the first issue of a new journal, Academy of Management Learning and Education, Professor Pfeffer argues that there is little evidence that MBA graduates earn more.

Applications for MBA courses – the world's most popular postgraduate degrees – are booming, as the economic downturn convinces many workers that now is a better time to be a student than to look for a new job. MBA programmes can cost more than £60,000 at the most prestigious business schools.

But Professor Pfeffer argued that students pay for the opportunity to add a prestigious name to their CV rather than for the relevance of the education they receive.

He said one of the problems was that much of the business school curriculum had remained unchanged since the 1960s. Professor Pfeffer analysed 40 years of research to see if he could find a link between MBA results and salaries. However, he was struck by the almost total lack of evidence that this was the case.

He quotes another professor who conducted two of the studies cited in Pfeffer's paper, and who said: "I have never found benefits for the MBA degree. Usually it just makes you a couple of years older than non-MBA peers."

However, the providers of British MBAs leapt to the defence of UK and European business schools. The UK, with more than 10,000 graduates a year, produces the highest number of MBAs outside North America, where around 90,000 enter the job market every year.

The Association of MBAs said: "The rewards for graduates from leading MBA programmes are good in both the short and longer term." The association's latest career survey found that the average MBA salary was £64,000.

Dr Pauline Weight, director of full-time MBA programmes at Cranfield School of Management, believes that Professor Pfeffer's findings may be true of US courses, which take many graduates fresh from university. However, she said, it was not the case for European business schools, which mainly recruit experienced business people.

She said: " Our average student is 31 and has eight or nine years' business experience behind them. They are able to apply the theory to what they have learnt at work and so are able to stretch their thinking."