A NerdWallet study of post-graduation outcomes at 60 of the nation’s top universities and liberal arts colleges revealed that recent graduates of specialized business programs earned 16% more than the overall average (business students reported an average starting salary of $54,641 compared to $46,908 over the entire sample).
The study also showed that focused business programs excel in terms of employment outcomes:
- The average rate of employment after graduation stands at approximately 66% for undergraduate business schools, whereas the average across all schools was just 53%.
- Of the 5 schools whose graduates were most likely to find employment in business or finance, 4 offered specialty undergraduate business programs.
Although employment rates and salaries are relatively high, working in business is highly competitive. Nearly 22% of all bachelor’s degrees awarded in the 2008-2009 academic year were in the field of business. Furthermore, the choice of which institution to attend is critical as expected outcomes across universities vary quite a bit. Starting salaries for business schools with available data ranged from $42,333 (University of Georgia’s Terry College of Business) to $63,273 (University of Pennsylvania’s Wharton School of Business). An income gap of this size may partially reflect the quality of the institution, but there are additional factors in play.
Wages are hardly equal across all regions of the United States. Wealth tends to be concentrated in the largest metropolitan areas, and more broadly speaking, the coastal regions.
A student attending school and subsequently working in a region where income levels are relatively low is likely to earn less each year than an otherwise equal counterpart in, for example, New York City. This can be misleading, however, as the cost of living is often smaller in low-income areas. NerdWallet’s analysis revealed the following:
- The bottom third – in terms of salaries – of the 12 business schools we analyzed are mostly located in the southeastern United States (with one exception, Pennsylvania State University).
- University of Georgia – $42,333
- Clemson University – $45,631
- Pennsylvania State University – $48,924
- Georgia Institute of Technology – $50,167
- The top third of the schools are, for the most part, located in the northeastern United States (the University of Michigan being the exception).
- University of Pennsylvania – $63,273
- Carnegie Mellon University – $60,970
- University of Michigan – $59,083
- Georgetown University – $58,971
The map above is further evidence that regional differences will play some part in the salaries that business students receive upon graduation.
While it is true a student’s chosen university doesn’t completely restrict him or her from moving elsewhere to work, the tendency to remain in the same region does exist. From the post-graduation reports of many universities, we can interpret where new graduates are migrating for employment.
- Clemson University (South Carolina) – 33% of graduates find themselves working in the same state or the 2 just at its border (North Carolina and Georgia).
- University of Notre Dame (Indiana) – 45% of postgraduates end up in the surrounding states and 3 others nearby (Illinois, Michigan, Minnesota, Missouri, Ohio, Wisconsin).
One driving force behind this trend is an employer. Businesses located near university are more likely have relationships with faculty and alumni, as well as to attend career fairs or hold on-campus interviews. All of these are critical pathways to future employment for undergraduates.
The field of “business” is a broad term, encompassing numerous individual occupations, each with their own characteristics. The distribution of employment over these sub-fields of business can also help to explain differences in post-graduation outcomes. For instance, 3 of the top 4 we studied (in terms of salary; no industry data available for Carnegie Mellon) reported that approximately 50% or more of their undergraduates entering the workforce after were doing so in finance or investing positions. The income difference between two possible business careers can be significant:
- A University of Pennsylvania Wharton School student beginning a career as an investment banking analyst reported making an average salary of $71,200 per year in 2011.
- For the same graduating class, a student entering the workforce as a buyer/merchandiser reported an average of $49,444.
Think beyond the salary
If business is your calling, then a specialized undergraduate business school is a good investment to make. You’ll be more likely to find employment after graduation and earn a relatively high salary.
The options, however, are hardly limited. Many universities across the United States offer specialized business programs. While it may be tempting to attend the school that leads to the highest average incomes, consider your other preferences such as geographical region, desired lifestyle, employers, and job functions. Sacrifices in all of these areas will make a slightly higher income hardly worth the while.