Who's Going To Business School?

The New York Times published an interesting article this weekend called Hedge Funds and Private Equity Alter Career Calculus. Wordy title aside, it covers how, in many sectors, the MBA doesn't have the same pull it once did.

Over the last year or so, I've noticed the same trend among my students. It's a small and perhaps unreliable sample, to be sure, but I haven't worked with many finance people lately. In fact, I've seen a wider and wider range of backgrounds leading toward business school.

However, I wouldn't read too much into this. First off, as the article points out, applications aren't going down: the trend is only in who is making up that pool of applicants. Second, the desire and value of MBAs in finance have long been cylical, closely related to the health of the economy.

When the market is making people loads of money, there's not much need for those people to get advanced degrees, and there certainly isn't much benefit for some of those people to spend thousands of dollars and years of their life getting the MBA. When the market is suffering, the opposite happens: people in finance realize the ceiling is temporarily lower--or perhaps they are even laid off--and seek some way to add to their perceived value while the storm passes.

Until the climate changes again, I might have to rethink some of my assumptions. After years of teaching test-prep classes in New York, I've always used a junior analyst on Wall Street as my stereotypical MBA candidate. These days, there's no standard candidate, whether you're discussing prior education, work experience, or ethnicity.

About the author: Jeff Sackmann has written many GMAT preparation books, including the popular Total GMAT Math, Total GMAT Verbal, and GMAT 111. He has also created explanations for problems in The Official Guide, as well as 1,800 practice GMAT math questions.

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