MBA applications are growing at many business schools in Europe and the United States as professionals seek to increase their marketability amid a struggling economy and a job market crippled by the coronavirus pandemic.
After years of decline, many programmes are registering a double-digit percentage rise in apps in 2020 compared to last year. The tendency is expected to continue in 2021 as a weak job market will push more professionals back to higher education.
Bad economy equals more MBA applications
The current development is not a surprise and easily explained. MBA applications have long served as an economic indicator. Traditionally, they rise when the economy experiences difficulties as professionals prefer to invest in their professional development and return to a recovering job market with enhanced expertise and skills. Besides, the "opportunity cost", essentially money forfeited by not entering the job market, is much smaller. “It’s a very predictable and reliable pattern,” Stacey Kole, deputy dean for the full-time MBA programme at the University of Chicago Booth School of Business (US), told the New York Times.
Schools can also claim credit for the increase. When the pandemic hit, they took measures like extending deadlines, adding extra application rounds, granting conditional admission, moving application interviews fully online, and even waiving tests like GMAT and GRE as a requirement. It also helped that test providers issued at-home versions of their exams.
The hot job market was the major reason for the decline in applications in the past few years, but it is not the only one. In the US, schools have pointed out that restrictions on student work visas have discouraged international applicants. Brexit was also expected to act as a deterrent for international students, but fears proved unfounded. Business schools in the United Kingdom have continued to experience strong demand from non-UK applicants.
US schools welcome rebound
Two-year full-time MBA programmes at US business schools are currently experiencing a revival, according to MBA portal Poets & Quants. Some institutions, such as Columbia Business School and the University of Pennsylvania’s Wharton School, are even achieving record applications. At Columbia, for example, applications rose by more than 19% to nearly 7,000, blowing past the previous record of 6,188 achieved in 2016-2017. Wharton said that its full-time, two-year MBA programme received 7,158 applications, an increase of more than 1,200 applicants from last-year’s level.
While not breaking records, other schools are also recording strong numbers. Applications at Rice University’s Jones Graduate School of Business jumped by a whopping 63%, while the University of Virginia’s Darden School of Business posted a 25% increase.
Upswing in Europe, too
Many European schools are also enjoying growing interest in their full-time MBA programmes. INSEAD (France) recorded a 57% year-on-year rise in applications and IESE Business School (Spain) saw a 12% increase, the Financial Times (FT) reported.
Records were set in Europe, too. In the UK, applications skyrocketed since lockdown began. Applications for the full-time MBA at Warwick Business School soared 56%. The school has expanded its intake to 137 students, including 105 international students from outside the UK and the EU. At the University of Oxford’s Saïd Business School, applications are up 35% in 2020 compared with last year, while Imperial College Business School recorded a 41% increase, according to FT.
Since MBA applications are closely tied to the state of the labour market, it may be possible to view the economic outlook as a future indicator of things to come in the business education world. The world economy is expected to grow 5.3% next year. But those expectations depend on a vaccine being released sometime soon. “Our forecasts point to a world which, by end-2021, has a level of activity that is not just well below its pre-pandemic growth trajectory but, in many cases, still below its end-2019 level,” HSBC’s global chief economist Janet Henry told Reuters.
It all suggests that 2021 will again be characterised by professionals preferring to further their education. Rod Garcia, assistant dean in MIT Sloan’s admissions office, told FT: “Although I can’t know for sure what will happen next year, I would expect the trend of increased applications to continue.”