Stanford MBA Careers: A 20 Year Longitudinal Study

By Margaret S. HarrellThomas W. Harrell
1984| Working Paper No. 723

Our 20 year studies find that MBAs are happy, prosperous, and are moving from large to small business. On average they are either very Satisfied , or Satisfied with their jobs. Their median earnings at 20 years out in 1981, 1982, and 1983, approach $100,000 per year. At five years out, only a little more than one in four were in small companies. There was a steady movement into self-employment in smaller companies so that by 20 years out, about half were in small companies. Comments show that this movement away from big companies and into self-employment in small companies will continue over time in the future. The purpose of the Stanford Graduate School of Business is to educate for general management of important organizations. This has been achieved, to the extent that 20% have become general managers by 20 years out, but only a few of these are the Chief Excutive or Chief Operating Officers. A considerably larger percent, 33%, have become Self-employed in small companies, usually less than 10 employees. These Self-Employed are Owner-Managers, or Partners. The highest earners have a pattern of interests, background, and personality that correlate significantly with earnings throughout the 20 year career. This pattern has been reduced to 45 questions in a High Earners Scale (HES). Although HES remains valid over the 20 year period, there are interesting differences in the correlates of personality traits with earnings at different career stages. Self-assurance correlated significantly with starting salary and with earnings at five years out of the MBA but not thereafter. The need for power correlated significantly with earnings at 15 and 20 years out of school, but not before. Scholastic aptitude, measured by the Admissions Test for Graduate Study in Business (ATGSB) is only negatively related to earnings, never positively. The range of scores was reduced since all were college graduates and admitted, in part, based on ATGSB scores. Grades in the second year of the MBA program, consisting of elective courses, were significantly positively related to earnings at all intervals, starting salary, 5, 10, 15, and 20 years. Age, which was significantly positively related to earnings at five years out, became significantly negative at 20 years.