Business School Apps Are Dropping … and So Is the Gender Gap

There is a “slow but steady” rise in female enrollment in MBA courses globally.

Source Sky Nasher/Getty

Why you should care

While the MBA is losing some luster, women are elbowing their way in.

Silicon Valley’s connections to the global tech industry made Stanford Graduate School of Business attractive to Kimberley Manning.

Yet the software engineer, whose family had moved to Australia from Zimbabwe, halted her application.

“I perceive the U.S. to be increasingly hostile to immigrants and people from other cultures,” Manning says.

The U.S. is the birthplace of the MBA, and home to 51 of the top 100 business schools in the Financial Times’ global ranking list. But the market is five years into a downward spiral in demand, which has been spreading in recent years to even the most well-regarded institutions, including Stanford, Harvard Business School and Wharton.

But according to Elissa Sangster, CEO of the Forté Foundation, which campaigns to raise the proportion of women in business education, there is a “slow but steady” rise in female enrollment in MBA courses globally.

One-third of 52 member schools had 40 percent or more women enrolled for last year’s intake, up from just three schools in 2014.

“We have seen a more intense focus on enhancing gender diversity in the last five years,” Sangster says.

While Manning may have decided against applying, Stanford Graduate School of Business this year has its most gender-balanced MBA intake, with women making up 47 percent of the cohort, up 6 percentage points from 2018.

That’s the result of several years of expanding efforts to encourage female applicants, such as outreach events to groups of women outside the U.S. and scholarship support for women, according to Kirsten Moss, assistant dean of MBA admissions and financial aid. “Diversity, equity and inclusion is a key priority for the GSB,” she says.

Financial aid proved important for Manning, who has been helped with her MBA costs at Insead with a 20,000-euro Forté Fellowship grant. “The MBA makes sense to me because I want to get an international experience, hopefully to do something in the future to help my home country, Zimbabwe,” she says. 

This year, applications are down at all but one of the 10 highest-ranked schools in the Financial Times’ analysis. The University of Chicago Booth School of Business was the exception, with applications up 3.4 percent this year. But its numbers are still down from two years ago, as the school suffered an 8.2 percent drop in 2018.

The tightening of visa rules for overseas students and hostility to immigration under Donald Trump’s administration are seen as the biggest problems for MBA admissions teams.

Manning, who has worked in Brisbane-based fintech startups since she graduated from the University of Queensland five years ago, will be heading to France this January to start her MBA at Insead’s Fontainebleau campus. “I actually don’t feel individually targeted and would be eligible for a privileged work visa,” she says. “But I don’t want to move to a country with such openly hostile policies.”

She is not alone in making such a decision. Stanford Graduate School of Business has suffered a 6 percent fall in MBA applications and cites immigration worries and the current U.S. trade battle with China as reasons behind it.

Most business school aspirants I’ve encountered have lukewarm motivations at best.

Gorick Ng, research associate, Harvard Business School

A buoyant jobs market has also raised the opportunity cost for would-be applicants of leaving employment and going to business school full time — a situation not helped by above-inflation rises in tuition fees.

However, there is also a growing perception that MBAs are no longer the most cost-effective way to get on in a career, and that other avenues now exist to gain what used to be the exclusive benefits of a business education.

Gorick Ng is a research associate at Harvard Business School, where he completed his MBA last year, and he’s also a vocational counselor for Harvard undergraduate students. One of the biggest challenges to the MBA he sees are the “unclear benefits” of the qualification to those who are considering taking one: These possible MBA students are precisely the kind of people who could build a network and find a job through other routes.

“I am not saying that a business school is worthless,” Ng says. “I am grateful for the education, mentors and lifelong friends I made at HBS. But by and large, most business school aspirants I’ve encountered have lukewarm motivations at best, and question whether they made the right decision long after they graduate.”

The most common reasons Harvard students give for taking an MBA include fear of missing out on what friends have done, the desire to leave a job they hate, the chance to find a husband or wife — and simply because they can, having taken the Graduate Management Admission Test exam and scored highly, according to Ng.

But, he cautions, these reasons are not sufficient when measured against the cost of studying for an MBA, which can run to $250,000 at schools like Harvard, and the two years of full-time study required to complete the degree.

“Like a spork, an ugly hybrid that is not pointy enough to be a fork or round enough to be a spoon, business school is so many things to so many people that it ends up being not much of anything to anyone,” he says.

The decline in MBA applications in the U.S. is a concern, but far from being an existential crisis for the highest-ranked schools. This year, for example, Stanford received 7,342 applications, down from 7,797 in 2018, for only 417 places.

Lawrence Linker, a Singapore-based admissions consultant at MBA Link, which offers advice to potential students, sees the declining number of applications as an opportunity because they increase the odds of acceptance into top schools. “For those with the right test scores and the funds available, there has never been a better time to apply to business school,” he says.

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By Jonathan Moules

OZY partners with the U.K.'s Financial Times to bring you premium analysis and features. © The Financial Times Limited 2019.

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