Every year the Financial Times publishes various rankings of business schools. One of these lists focuses on Master programs, excluding MBAs. The difference is that to get enrolled in an MBA course, the student usually needs to demonstrate a couple of years of working experience, whereas for a normal Master (MSc or MA), as it is offered in Europe, this is not necessary (These programs are therefore sometimes referred to as pre-experience Master). The reason for the existence of these MSc/MA programs is that before the Bologna reform, it was common in many European countries to study a five-year diploma course. These diploma programs are now split up into a three-year Bachelor program and a two-year Master program, whereas latter are shortened to 1.5 or one year at some universities (as at RSM Erasmus University).
In the United States most graduate business programs are MBAs, which are, by the way, not government funded and cost thus a lot more money. In Switzerland and the Netherlands, for example, normal MSc/MA programs are part of the compulsory education (if a student chose to study at a university), i.e. a Bachelor is not considered to be a complete education. Again, this is due to the previous five-year diploma system. Consequently, the standard Master programs are heavily subsidized by tax payer’s money.
The ‘Master in Management Ranking‘ features only European Master programs, since such courses are practically absent in other parts of the world. The ranking considers the average salary of the alumni as of today, career and placement rank, percentages of women and international students and faculty, as well as the number of languages required to graduate. From a student perspective, some of these criteria might not be of great importance; the ranking thus reflects only one viewpoint.
CEMS, a European international management program, is on the top of the list. This program is offered at various European business schools and requires the student to speak at least two European languages apart from English and to study one of the three semesters at a partner institution. Other prominent candidates include HEC Paris (France), LSE (UK) and Esade (Spain). The Master program of the RSM Erasmus University is ranked tenth, down from eighth last year.
Of special interest for prospective graduates and job market entrants is the average salary column. The highest salaries are paid for graduates from Mannheim and London (at both roughly about $72,000). Students from RSM receive on average a mere $56,000 a year. A student coming from a poorer country obviously earns less than a graduate living in a rich country. An easy way to measure the value of a Master degree in a certain country is to compare the average salary after graduation with the country’s GDP per capita in nominal terms (i.e. no currency or price-level adjustments have been made). In the UK, the ratio of GDP per capita to an LSE graduate’s annual wage is 1:1.63. The same ratio holds for a student at Mannheim. In France, this ratio ranges from 1:1.57 to 1:25, depending on the business school in the top 10 ranks. A RSM graduate, however, faces dire prospects: there, the ratio is only 1:1.07.
According to my Dutch friend, this result is to be expected. Wages here are apparently very equal, meaning that a worker at McDonalds earns pretty much the same as an office employee. Many people holding a Master degree might not perform tasks that the Swiss society, for example, would graduates expect to do. Some graduates might even perform secretarial work. I believe that this is not as common in other countries.
Yet, this doesn’t imply that there are no big earners in the Netherlands. The MBA ranking gives a different picture. An MBA graduate from RSM, which is ranked 25th worldwide, will earn more than double the amount of a normal Master student. In this case, the ratio skyrockets to 1:2.16. This is probably again due to the former diploma system. Every student had to complete a five-year course in order to receive any diploma. Certainly, not all of these graduate became managers in large companies.
In the United States, for example, professionals would not follow an MBA program if their career does not require it. In Europe, in contrast, without a Master degree the student is considered to be still ‘in education’ and might not even find a job that requires only undergraduate skills in the US. The European job market has thus not yet adapted to the new Bachelor/Master system. Since an MBA is considered a supplementary education, only people who are required to do so will follow it. Also the fact that an MBA is much more expensive (fees start from $15000 per year and reach $100000 at top school such as the IMD in Lausanne) leads to the situation where only people who have a high chance of career advancements upon graduation will actually enroll in such programs. Therefore, MBA graduates generally play in a different league than normal Master students. It is important to mention that age differences to not matter (MBA students are usually older than Master students, since they have many years of working experience upon enrollment) since the FT rankings use current salaries to calculate their numbers. Possibly, some MBA graduates also possess a Master degree but might not be considered in the standard Master list. This effect, however, is not revealed on the FT website.
This basically gives me two implications: A(nother) reason why not to work in the Netherlands, or following an MBA program after working for a couple of years (good schools require about 5-8 years of working/management experience). Probably it will be both of them.