MBA vs. Master’s Degree: How to Choose
Data Summary
- The average cost of an MS degree in business was $56,040 for a two-year program in 2020. An MBA costs $63,720, on average.Note Reference [1]
- The average salary for an individual with an MBA is 17% higher than the average salary for a master’s degree-holder.Note Reference [2]
- 91% of global recruiters hired MBA graduates in 2023 compared to just 72% who hired master’s degree graduates.Note Reference [3]
- One reason MBA graduates are in demand and earn higher salaries may be because of how employers perceive MBA degrees.
Pursuing an advanced degree is often challenging — and a pricey endeavor, with some top programs exceeding $150,000. From cost concerns to trusting that there will be a worthwhile return on your investment, deciding what to study can be overwhelming.
While master of business administration (MBA) programs are a popular option for students looking to increase their knowledge, build their skill set, and improve their job prospects and earning potential; other specialized master’s programs in business can provide the same or similar benefits.
Below, we outline the differences between an MBA degree and other business master’s degrees and explore how to choose which one to pursue.
MBA vs. MS in Business: What’s the Difference?
MBA programs focus on a broad range of business concepts, giving students an advanced but more comprehensive look at business processes. On the other hand, specialized business master’s programs typically provide deeper insight into one specific area of study.
MBA
- Prepares students for roles in business leadership
- Typically pursued after working for three years or more
- Can be pursued full time, part time, or online
- Average total cost: $63,723
- Average starting salary: $115,000
Master’s Degree
- Can be specific or general, but usually covers just one subject area in business
- Typically pursued after working fewer than three years
- Can be pursued full-time, part-time, or online
- Average total cost: $56,044
- Average starting salary: $95,000-$115,000
According to the Graduate Management Admission Council (GMAC) 2023 Application Trends Survey, 69% of master’s degree applicants have fewer than three years of work experience. In contrast, 73% of MBA applicants have been working for three or more years.Note Reference [4]
Other key differences between an MBA and other business master’s include the cost of the program and reported salaries after graduation.
Master’s Programs Often Cost Less Than MBA Programs
The cost of a master’s degree, like any other degree, can vary by program type and institution. However, the average cost of an MS in business program is lower than the average cost of an MBA program.
In total, prospective MBA students can expect to pay around $63,720 for a two-year program, while students pursuing other master’s in business degrees pay around $56,040 for two years.
But Demand for MBA Graduates Is High
In a 2024 GMAC survey of global recruiters from public companies, 91% reported hiring MBA graduates in 2023.Note Reference [3] MBA graduates were more in demand than graduates of any other business master’s program.
Despite still being in high demand, graduates of master’s degree programs were in lower demand than bachelor’s degree graduates and candidates with industry experience.
MBA Degrees Can Also Lead to Higher Average Salaries
According to the most recently available data from Payscale, the average salary for an individual with an MBA is $98,000 a year — 17% higher than the average salary of a master’s degree-holder.Note Reference [2]
Even among workers with the same job title, those with an MBA can expect to earn slightly more than those with a master’s degree.
According to Krystal Covington, a business growth strategist and 2012 MBA graduate of Western Governors University, part of the reason for these slightly higher salaries may be due to how companies perceive the worth of MBA degrees.
The MBA, that title has always had a little bit of clout to it,
Covington said. [Employers] have a preference for it because they understand it. An MBA is positioned to be known … as an executive-level person. And when you have an executive-level candidate, you think,
Well, I have to be ready to pay that executive-level candidate more.
How to Choose What Type of Graduate Business Degree to Pursue
Though it may be tempting to choose a degree based solely on salary projections, other factors including employability, costs, and subject matter can be just as important.
Here are some steps you can take if you’re still unsure about how to choose:
Analyze your career goals.
If you’re looking to move into a leadership role, you may be better suited for an MBA program. Conversely, if your goal is to advance in specific areas, you may be better off seeking another master’s degree.
Covington recommends looking at job postings for roles you’d be interested in pursuing. What types of candidates are employers looking for? What requirements or credentials do they expect them to have?
Assess costs.
Advanced degrees are pricey. How much of an expense are you willing and able to take on to further your knowledge and skill set? If you’re currently employed, find out if your employer offers tuition assistance or reimbursement for advanced degrees.
Understand demand and employability in your industry.
Earning a master’s degree can help you move up the ladder in your career. However, MBA graduates, bachelor’s degree graduates, and candidates with industry experience were more in demand by global employers than master’s degree graduates in 2023.Note Reference [3]
Pay attention to salaries.
Though the median weekly wage for all master’s degree graduates is 16% higher than the weekly wage for bachelor’s degree graduatesNote Reference [5], different master’s programs can yield varying results. For example, marketing directors, data engineers, and financial analysts with MBAs all earned more than those with business master’s degrees, according to Payscale data from July 2024.
Make sure to network.
Regardless of whether you choose to pursue an MBA or a master’s degree, one of the best ways to continue moving up in your organization or into others is through networking. Continually making strong connections in your industry can open you up to opportunities you may not otherwise get offered or know about.
References
- Student budget (attendance adjusted) (average) and Tuition and fees paid (average) by Graduate degree program. National Center for Education Statistics. 2020. (back to footnote 1 in content ⤶)
- Master of Business Administration (MBA) Degree. Payscale. Accessed July 2024. (back to footnote 2 in content ⤶)
- Corporate Recruiters Survey 2024 Report (PDF). Graduate Management Admissions Council. June 2024. (back to footnote 3 in content ⤶)
- Application Trends Survey 2023 Summary Report. Graduate Management Admissions Council. October 2023. (back to footnote 4 in content ⤶)
- Education pays, 2023. Bureau of Labor Statistics. April 2024. (back to footnote 5 in content ⤶)
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