Dean Mozrall for RBJ: MBA ROI: Perspective matters … | Advancing Business

As seen in the Rochester Business Journal on October 27,2025

MBA ROI: Perspective matters … | Advancing Business

There have been conflicting views of the value of an MBA, sometimes from the same source. A recent article in Forbes, “Reconsidering the MBA: Is It Still Worth It?” (March 2025), argues that there are other, less expensive and time-consuming routes to a successful career in business. Yet, another Forbes piece, “What’s an MBA Really Worth?” (May 2021), makes a solid case for the high lifetime earnings for holders of an MBA: “The bottom line: Despite the high costs of the degree, the long-term returns on the education are not in dispute.”

The value of an MBA demands context. Those considering the degree should bear in mind the opportunities for career development and flexibility offered by the degree. Moreover, they should carefully consider the cost of living, quality of life and entrepreneurial prospects in the areas where they hope to work, relative to their salary. When publishers rank business schools, their ranking methodologies typically ignore these factors while placing a lot of focus on starting salaries.

So, what are the “long-term returns” of an MBA? A 2021 PayScale analysis for Poets&Quants found that MBA graduates reported a median cash compensation of $5.7 million over a 35-year career.  Clearly, the long-term value of an MBA vis-à-vis compensation is not in dispute. Degree holders, on average, can look forward to very lucrative careers.

Ironically, national rankings use starting salaries as a major criterion. U.S. News & World Report, the most influential of the ranking organizations, in its methodology lists “starting salaries and MBA graduates’ ability to find jobs upon graduation or three months after graduation” as key ranking criteria. This bias toward initial pay is something to keep in mind when considering an MBA program’s relative placement on any list.

As impressive as earnings numbers are, though, an MBA brings much more than income. According to Caroline Diarte Edwards, co-founder and director of Fortuna Admissions, “When chosen strategically, an MBA can deliver a powerful return – unlocking upward mobility, expanding leadership opportunities, and strengthening long-term earning potential.”

Edwards points to several such benefits of an MBA, including access to a powerful network, flexibility in choosing a career path, and strengthened confidence in leadership abilities. Alumni networks open doors to new roles and opportunities, and holders of the MBA can pivot smoothly to new jobs in different business sectors.

Given that an MBA provides a comprehensive understanding across business disciplines and strengthens critical skills in leadership, strategic thinking, and problem-solving, in addition to income, it is essential to view all the benefits of an MBA over the span of a career. Writes Edwards, “the degree offers unparalleled career optionality to:

• Launch an entrepreneurial venture
• Transition across industries or continents
• Lead global teams at the C-suite level”

While earning an MBA can open doors to exciting career opportunities, where graduates choose to establish their careers play a critical role in how well they flourish. Many top-ranked MBA programs are in major metropolitan areas, which can significantly inflate reported starting salaries and, in turn, boost their rankings.

However, current ranking methodologies often overlook key factors such as cost of living and quality of life. Graduates in large cities frequently face longer commutes, heavier traffic, and higher expenses for housing and food—realities that can impact their overall well-being and financial stability.

It may be time for both ranking organizations and prospective MBA students to broaden their criteria. Evaluating the strength of a region’s entrepreneurial ecosystem, along with affordability and lifestyle benefits, could offer a more holistic view of a program’s value.

Cities like Rochester, for example, present a compelling case. With a growing innovation economy, lower cost of living, and high quality of life, they offer an attractive alternative to the traditional big-city MBA experience.

In their book, Jump-Starting America: How Breakthrough Science Can Revive Economic Growth (2019), MIT economists Jonathan Gruber and Simon Johnson point to technology hubs throughout the U.S. that can support economic growth. Key are a large pool of educated workers, high-quality universities, and a low cost of living. Notably, the authors make Rochester their top-ranked metropolitan area.

A recent article in Business Facilities (05/08/2025), “Greater Rochester, New York: Innovations Felt Everywhere,” explains why the region stands out as a promising home for entrepreneurs.

Rochester, N.Y., is one of the country’s top five patent-producing major metros. This patent activity is bolstered by world-class R&D resources at the University of Rochester and Rochester Institute of Technology and more than 1,500 manufacturers in the Greater Rochester, N.Y. region, employing more than 60,000 people. The local workforce is creating innovations that are making an impact well beyond this major metro area of 1.2 million people.

In addition, we are seeing a move toward making the Buffalo-Rochester-Syracuse area a high-tech corridor where there will be substantial production of high-end products such as chips.

And the cost of living? A recent publication by Payscale finds the cost of living in Rochester overall to match the national average and fall below the average in housing, utilities, and groceries. Although this may not afford bragging rights on overall salary potential, it can often lead to an overall better ROI on the investment in an MBA degree.

Finally, those seeking a home base must consider quality of life, which includes job opportunities and cost of living, but also natural resources, cultural attractions, world-class colleges and universities, easy commutes, and other features that make a city a desirable place to live. Rochester scores well in all these categories. In fact, U.S. News & World Report ranked the city #9 among Best Places to Live for Quality of Life in the U.S., 2023-24. Quality of life can often be ignored by rankings and graduates alike while leading to careers that commit years to locales that come with frequent traffic jams and daily commutes that eat into busy schedules, as well as personal and family time.

Those considering an MBA have a lot to keep in mind. The issue of value when it comes to income has been settled. But—as is always the case—there is more than money at stake, including location, location, location…

Jacqueline Mozrall is dean of RIT’s Saunders College of Business.