Why Women MBAs Still Make Less Than Men
Maria |
May 24, 2023

Welcome to our thought-provoking episode of Business Casual! Join hosts John, Maria, and Caroline as they shine a spotlight on the persistent gender wage gap among women pursuing MBA degrees. They will embark on a journey of exploration, delving into the intricate web of societal, cultural, and structural factors that contribute to this disheartening disparity. Through deep analysis and insightful conversations, we aim to understand the root causes behind women MBAs facing lower salaries compared to their male counterparts.

Episode Transcript

[00:00:07.130] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Maria Wich Vila and Caroline Diarte Edwards. We just received a report from the Fortuna Admissions, which is taking a look at women in leadership roles after they get the MBA degree. And there’s sort of mixed news here. I mean, there’s on one level, what happened is that Forte found that there’s been an increase in women’s enrollment in MBA programs that we are well aware of and we’ve talked about in the past, and that when it comes to pay, the gap between the genders has, in fact narrowed from 2016 to 2022. But unfortunately, it still persists, and it persists fairly significantly on a number of levels in terms of promotions, leadership roles, obviously compensation. We’ll get into some of the details here and it’s a pretty good study. I mean, the researcher surveyed nearly 1500 MBA alumni and over 60 elite MBA programs and really got a good view of where women are once they get an MBA degree. Maria, what do you make of this?

[00:01:26.460] – Maria

I wish I could say that it was completely shocking to read this result, but unfortunately, it isn’t. It’s funny. I graduated from college 25 years ago. My 25th college reunion is coming up, and I started thinking about how when I graduated in 1998, I went into the workforce completely naive, and I was like, Woah, it’s such a good thing to be a professional woman in today’s world. Not like back in the where women had to deal with sexism. I’m so glad that that’s behind us now. And that lasted all of, what, three days until I had people making inappropriate comments or all kinds of that was just my beginning foray into the wonderful world of sexism in corporate America. And I just think it’s everywhere. I don’t think it was just my particular employer. I think it’s literally everywhere. And so I’m not surprised to see that women are often penalized professionally. I think one of the biggest things that does contribute to the pay gap for professional women is the I think I quipped right before we started recording that the elephant in the room is actually a small seven pound baby that once women decide to have children, even if they have a very willing partner, even if they have gender equity in terms of intended division of labor in the home, a lot of the tasks with child rearing and family management does tend to fall stereotypically, typically to the woman.

[00:02:54.050] – Maria

And then making things even more complicated. Then 15 years, 1015 years later, then we enter what’s called the sandwich generation, which means that we’ve got both younger children at home, and now our parents are ailing, and so they may have health challenges. And again, I just think because there are these are just very deeply embedded systemic prejudices or biases, that the woman is the nurturing one the woman is the one who should take care of the child. The woman is the one who can probably cook better, even though in my relationship that is not the case.

[00:03:24.000] – John

Whoa, wait, that’s not the case in my house, right? Meals.

[00:03:29.110] – Maria

Yes. And I am very fortunate that my husband is amazing, but on average, and he’s way better at cooking, which, thank goodness for all of us. But it’s the truth that a lot of that burden does tend to fall to women and something has got to give, and that something does tend to be their careers.

[00:03:46.730] – John

Yeah, that’s really true. And it’s sad in a way. Before I have Caroline weigh in, I want to just give you some numbers out of the report, and they’re kind of interesting. I mean, what the report showed is that pre MBA, the men were making $83,524, which is pretty good income for a young person in their mid to late 20s before they even get an MBA. And the women were making 76,660. So the gender gap, essentially between men and women was 8.2% 1st job. Post MBA, the gender gap pay differential narrowed from 8.2 to 6.4, but still persisted. Men earned roughly $9,000 more than women. The men were earning 135,000 job out of post MBA and women, 127,000. And obviously this is for a wide range of schools because we know, obviously at the M seven that these numbers are much higher. But I think that they give a really good picture of MBA programs in general. And then what happens is the wage gap really increases substantially a few years after one gets the MBA. So it goes from 6.4% difference to a 17.2% difference when men report making 209,000 a year, and this is basic compensation, and women report making 173,000.

[00:05:27.270] – John

So the difference there after just a few years is $36,000. The difference post MBA was roughly $9,000 and the difference before the MBA was about $7,000. So that’s a big jump. You would think that the MBA did narrow it somewhat, but you would think that that would be a more sustainable advantage, but it turns out not to be. And Caroline, I’m imagining that you share Maria’s views on why that’s so.

[00:06:00.340] – Caroline

Yes, it is sadly unsurprising. And as I mentioned earlier before the podcast, I looked at this data at INSEAD and somewhat similar to what Forte is showing here, we did see that there was a bit of a gap, so slight gap in the salaries of men versus women coming into the program. But what we saw was that there was no gap when they came out of the program. So that’s different to this Forte data. So perhaps INSEAD is a better option for women, but I don’t know how that evolves over time. So I have to qualify that. I don’t know how the trend evolves over time, and I wouldn’t be surprised, honestly, if there is a similar trend for the reasons that have been mentioned so far. So I think it’s a very complex mix of factors with embedded prejudice, right. That we’re inheriting thousands of years of gender prejudice and then it is difficult for mothers, I think, to juggle life in a corporate career with having a small child. And I think that’s particularly true in the US. Maria was mentioning before we started recording that you do not have the advantages in the US.

[00:07:22.140] – Caroline

That you do have in some, at least some European countries where when I had my four children while I was working at INSEAD in France, I benefited from very generous maternity leave, paid maternity leave, which you do not have guaranteed at all in the US. And several benefits. Right. We were given money from the government for having children.

[00:07:48.010] – Maria

Right.

[00:07:48.310] – Caroline

And that was not even me tested. So regardless of how much you earn, we got nice benefits paid to us because we had children. And so it’s much more difficult, I think, in the US. I don’t know. I frankly do not know how people manage to have children here because you don’t get the paid in terms you leave, and you have so little paid vacation.

[00:08:12.260] – Maria

Right.

[00:08:13.170] – Caroline

When I had young children, I was working in France, I had six to seven weeks a year of paid vacation. In the US. You’re lucky if you get two weeks. Well, how are you supposed to manage school vacations with two weeks parental vacation? It just doesn’t work.

[00:08:31.140] – Maria

Right.

[00:08:32.210] – Caroline

And all of the summer camps and so on, they cost an absolute fortune. At least they do here in California.

[00:08:39.820] – John

Yes.

[00:08:40.470] – Caroline

So I’m amazed that people have as many children as they do here in the US.

[00:08:47.130] – Maria

Because I’m not sure I would have.

[00:08:48.910] – Caroline

Done it if I started out having a family here. So I think that there’s a lot that could be done to support families and make it put the structures in place, have much more support for childcare in France. You can send your child to I mean, there’s subsidized nurseries and then there’s free public education from the age of three years old for every child. Right. And it’s so much harder here. I’m not sure that people quite realize how hard up they are in the US. Compared to many other developed countries. It doesn’t have to be like this. There are different ways of doing things that could make it much easier for families. And so it might not solve everything, but I think it could go a long way to making lives for working parents easier, because at the end of the day, if you’ve got two demanding careers, something’s got to give, right? Unless you’re both earning vast sums of money and then you’re outsourcing all of your parental responsibilities. And not everyone wants to do that either.

[00:09:59.360] – John

True. And even if you choose to work, childcare siphons off most of your earnings in this country. So that when you actually sit down and you calculate what you’ve made, the numbers are nothing like what your gross income is on your w two form it’s a fraction because you’re really working for personal growth and fulfillment and not real income when you’re a woman and you have children in this country. Now, one of the things in the past I know Sally Blout, who had been the dean, very distinguished dean at Kellogg School of Management, often said that many women prefer not to enter two of the most lucrative post MBA fields, and that would be finance and consulting, in part because of the demands that the consulting industry places on people for travel. The common sort of timetable is you leave on a Sunday night and you come back on Thursday and you spend Friday in your local office, but you’re essentially away for five nights a week. And then investment banking, where we know the demands on you, are, frankly, unrealistic. It is a client service business, and people routinely work 80 hours a week in it.

[00:11:19.320] – John

It’s a young person’s game, pretty much, unless you really are wanting to stay and deal with that and become a partner. And Sally’s point was that more women need to go into these two fields, but these two fields are so demanding and so unforgivable in terms of the time that’s consumed by the roles that people play in them that I would think that makes it very difficult for women to take these jobs. Maria, comments well, I think that’s why.

[00:11:52.310] – Maria

We end up seeing women who do pursue those fields immediately after business school end up being, quote unquote, mommy tracked, where they end up working in recruiting or professional development or something that isn’t client facing, something that is more a support role within the organization. Now I’m hoping. I do think that several of the firms are trying to create more on ramp programs so that a woman can sort of step aside or step away from the very intense day to day client facing work. Maybe take more of a support role for a few years and then get back into being a consultant later. But it’s tough, right? It’s a competitive field. It’s not as competitive to get those jobs, which is what I think most of the listeners here who are applying to business school, they’re more focused on getting the job. But then once you get the job, you have to do well in the job. You have to keep getting promoted in a highly competitive it’s not just highly competitive to get a job in a bank or consulting firm, but once you’re there, it’s highly competitive to get that next coveted spot.

[00:12:47.680] – Maria

And so if you’re like, well, I haven’t really worked in front of a client for five years, but I want to be on the partner track. I don’t know how that doesn’t really go over well. Those are five years. Let’s just say it’s five years. Those are five years where you’re not building those client relationships and therefore you can’t become the rainmaker later who brings in that big project. And then that’s all those dominoes that need to fall into place for someone to become a partner or managing director, even if the person is still employed at the firm, those dominoes are not being set up for them in the same way right now.

[00:13:20.820] – John

And Caroline, you chose consulting after you got your MBA at INSEAD initially. What was that like for you?

[00:13:27.990] – Caroline

Actually, I was a management consultant before I went to business school.

[00:13:31.060] – John

Oh, that’s right.

[00:13:31.970] – Caroline

And then I worked for the World Bank. So I do think that the travel can make a big difference and I wonder now if things may change a bit. We learned during the Pandemic to do so many more things online than we did before. And I do see some people who are traveling, friends and acquaintances who used to travel much more pre Pandemic, who have learnt to dial that back and are traveling less now and are still able to do their jobs just as efficiently. People have realized that you don’t necessarily have to always be face to face to get everything done. So I do wonder if perhaps things may change a bit and travel may be less a requirement and perhaps that sort of grueling schedule that you described, John, may be less the norm. I don’t know. Of course, when you’re client facing, you don’t get much of a choice about how things about your own schedule. It’s more when you get to the more senior levels, when you can decide if you’re going to travel or not. And by then it may be too late. You might not have got to that senior level.

[00:14:38.890] – Maria

Right.

[00:14:39.130] – Caroline

If you haven’t been through all that, through all of those years of travel beforehand. So it’s tricky. But I do hope that with increased use of virtual communications, that might perhaps favor women and make it easier for women to get their hands on responsibilities, that might have been more difficult in the past.

[00:14:58.450] – John

Right? I think one of the things about this report that’s very interesting is the detail in it. For example, the study found that women MBAs are less likely to be promoted. They averaged 1.8 promotions post MBA by the time they were responding to this survey, compared to men who averaged 2.2 promotions. Minority women incidentally, averaged only 1.5 promotions. Women have on average 1.1 fewer direct reports than men do. Women were much more likely to cite a lack of female leaders or role models and a lack of confidence. More women also pointed to leadership barriers, such as a lack of formal or informal sponsorship in the organization and their own hesitancy to share their ambition with leaders. Also, there was this other interesting thing that more women than men are looking at mid management levels of manager through director. More men than women. Aspire to partner clevel executive President, CEO and Owner which goes to the point that both Maria and Caroline are making in regards to how if you want a family and have children, the burden falls on you. And that affects also your aspirations at work, which then leads to even a bigger pay gap as a result.

[00:16:23.450] – John

On the other hand, let me just try to put a more positive spin on some of this at least. The increase in pay once you get your MBA, if you’re a woman, is roughly the same as a man. In fact, it was 65% versus increase for men with 62%. Also, interestingly enough, minority women had a salary gain of 57% lower than both white men and women. Non minority women had a 68% pay jump compared to that 57%, which is, again, that’s another issue here. If you’re an underrepresented minority, it looks like the gender pay gap is even greater for you than it is for a white woman. But on the other hand, I think this is such a good study that it does call more attention to the fact that companies need to do more to give women who they hire more support, more mentorship, more acceptance, and value them in a way that gives them the kind of responsibilities that’s going to lead to more promotion and more money. That’s clearly to me, the message that comes from this report. Caroline, what do you think a company looking at this report might make of it?

[00:17:45.580] – Caroline

Well, it’s a very complex issue and I don’t think any individual company can resolve it. But I think everyone needs to take some personal leadership here. So companies and business schools and government, it needs everyone to be pulling in the same direction, to really make a big difference and hopefully we are moving in a positive direction, but I don’t know.

[00:18:13.310] – Maria

Right.

[00:18:13.550] – Caroline

It’d be interesting to see what this data would have been 1020 years ago and whether there is a positive trend or not. But there is still an ongoing issue with feeling levels of management being male dominated. And it’s not an issue we have at junior levels. We have plenty of talented young women coming into the workforce. Business schools have done a pretty good job of attracting an increasing number of women to get an MBA. And in fact, if you look at college graduation stats, it’s very female dominated now, isn’t it? Switched, right. It used to be absolutely 40, 50 years ago. It used to be that men were in the majority and now that’s completely flipped it’s now women are in the majority. And so it’s not an issue with talented women coming into the workforce. And so companies need to look at the incremental biases that are affecting women over time. And I think, as you talked about, those careers that perhaps women are opting out of because of those 80 hours work weeks and because of those grueling travel schedules. I mean, to me, that smacks are quite a sort of macho work culture and is it really necessary to work those kind of hours?

[00:19:44.170] – Caroline

Or is that FaceTime is that sort of kind of proving a point that I can do it, I’m the toughest guy here, I can do I can pull the all nighter. To me, I don’t think that that’s necessarily about performance and results. That’s more about sort of beating my chest that I’m the hardest worker in the office and I’m proving to the boss that I can work the longest hours. And that’s probably a culture that appeals more to men than to women. And companies need to I think there’s a lot that they could do to address those practices, which are probably more likely to attract men than to attract women in the first place.

[00:20:33.370] – John

Yeah, that’s true. Maria, I wonder if you when you got out of Harvard, if you felt that pressure to be there all the time, to put in all those hours to try to match the men who were recruited alongside you.

[00:20:49.310] – Maria

I think I was working more than they were, probably it was at a startup and I was really committed to the startup success, so I was working a ton of hours. I just want to quickly point out, as a side note, and John, you brought this up when we were sort of pregame chatting before we started recording that this isn’t just about political correctness and performative wokeness. Study after study shows that women led companies tend to have better return on capital. Women led funds tend to do better. Women led teams tend to be less dysfunctional or have more healthy dynamics. So this isn’t just about like, well, let’s just pick an arbitrary statistic and put the flag down that it has to be gender gender equality. I mean, the data show that women led businesses or business units or business teams tend to outperform. So it is in everyone’s best interest that talented women are given these opportunities. Just now, Caroline, we were just talking about what can businesses be doing differently? But it really is such a big issue, as Caroline said, that it’s a little bit like I mean, I think some of it is like, hey, if you get mommy tracked, we’re not necessarily going to penalize you for that.

[00:22:07.160] – Maria

But I think it goes much deeper than that. I read in one of the articles that some of the suggestions were, well, let’s have more cases with female protagonists, or let’s have more male allies. And that’s all great, but that’s very indirect. As I was reflecting getting ready for today’s podcast, I was thinking, like, what would have been most useful for me? And I think for me, almost like a mini course or a workshop on the realities of things, because I don’t know that in business school. And maybe this is just my memory being wonky, which is very, very likely, but I don’t remember anyone ever pulling me aside and being like, look, it’s still going to be really sexist out there. Even a very pragmatic thing that I did not at all take into consideration. I went into work for startups after business school. I was working in the tech sector, and I didn’t realize, because it didn’t occur to me to ask her to look into this, that smaller companies do not have the same requirements to adhere to things like maternity leave and family leave offerings. So a very small company, if someone would have pulled me aside and been like, look, if you want to start a family one day, you should probably work at a bigger company because they will have things like maternity benefits.

[00:23:18.400] – Maria

They will have health insurance. That’s going to be really good. They might have for people who might have fertility issues, larger companies tend to have their health insurance plans, tend to cover fertility benefits. So there are all these very pragmatic things that I wish someone would have that I think business schools could have pulled people aside because I think it’s great. Look, I love where gender parity or almost gender parity, a lot of business schools, companies are doing more. That’s all great. It’s great to get more male allies involved. Yes, we definitely need the male allies involved, but on a pragmatic level, until those changes kind of ripple through the system, I also think we’re doing women a disservice by perhaps pretending that some of these issues aren’t really there or kind of glossing over them and therefore people are graduating. Fresh face and optimistic real life hits, and it’s like a ton of bricks. It’s like the anvil on the Wily coyote’s head of the reality of it all.

[00:24:15.700] – John

Yes, well, that’s very true. And I wonder too, if in fact this is probably going to be a controversial question, but I’m going to ask it nonetheless. If you graduate from a top 25 school, right, not a second tier school, are you more likely, less likely to see a gap? And here’s why I asked this, because the McKinsey Bain BCGS, they’re not paying women less than men when they hire them, and neither would Goldman Sachs or J. P. Morgan or Morgan Stanley or Microsoft, Apple or Google. And yet even this survey shows that there is a difference in pay between men and women even right after graduation. And I wonder if that’s a function of the companies that don’t have all the greatest resources and don’t have all the money and aren’t the glamour companies. And it may be that the pay differential in those types of companies or jobs is greater than at the elite level that we more often than not talk about. Caroline, do you think there’s anything to that or am I just trying to get into a can of worms here?

[00:25:31.290] – Caroline

Yeah, I don’t know. Or is it that or is it that men are more likely to go into those finance private equity jobs with a super high salaries, and women are perhaps not going into those. I don’t know whether it’s the difference in positions and companies or whether there are actually substantial differences within companies for similar positions. I don’t know. I suspect that the gender pay gap reflects some differences in career path and positions that the women have versus the men.

[00:26:13.190] – John

Yeah, one of the points in the studies is that men are more likely than women to hold line jobs, which come with profit and loss responsibility and higher pay than women at at a pace of 47% to 42%. So not a big difference, but a difference nonetheless. And obviously, the mean compensation for a line role was about 207,000, and for a staff role, it was more like 181. So there is some of that. But even when women do hold line roles, incidentally, they still earn less than men anyway. The study found that women earn an average of about $34,000 less than men even in line rolls. So there’s still a problem, obviously, and I don’t know, it’s something that’s not going to go away. But I think as more women are in MBA programs today and will have positions of responsibility and power and leadership, I’m hopeful that they’ll help to change things by getting companies to pay for child support so that women can actually come to work and not worry about their children and how their children are faring at home and not siphoning off half or more of their pay to take care of their kids, which is a big problem.

[00:27:37.140] – John

I think a lot of women don’t go back to the workforce because just the economics of it just do not work in this country for many women. And it’s a real sacrifice that you have to make, particularly if you don’t have a mom, a grandparent nearby who would gladly care for your children when you’re at work and be totally supportive and enthusiastic about you’re wanting to have a fulfilled professional career. So for all of you out there, we’re hoping that someday we’ll see this gender gap truly narrow. If you want to read about the study, it’s on the Poets and Quant site. It’s called New Forte Study. MBA boosts wages for women and minorities. But gender pay gap persists. Caroline, you make a really good point about how Europe treats women so differently with children than in the United States, and how it’s much more conducive to encourage women to go back to work. I wonder if you ever could foresee some of that happening in the US.

[00:28:43.590] – Caroline

Well, there’s a very long way to go, right? I mean, I think it might happen sorry, going to happen on a state by state basis. I think getting some federal laws through that would be more aligned with European regulation could be very difficult in this country. But honestly, the gap is just so enormous. When I think back, I had such generous maternity leave. Our nanny you were talking about the cost of childcare. I think we had tax deductions for the nanny. We got benefits from the government because we had children. I mean, it was just one thing after the other. It made so much difference to me. It’s astonishing how little support there is in this country. And I’m amazed that the birth rate is as high as it is, quite frankly, given how little support there is here for families. Hey, any progress would be great. Progress, right? So there’s a lot of progress we made that, I think, at least on a state by state basis. If we could start making some progress, that would be wonderful.

[00:29:51.070] – John

Very true. And I say if there’s a miracle in life, it’s the miracle of birth. I don’t think there’s any other real miracle in life. And maybe that’s the reason why so many people want children, even in the United States, where the government policies might not be too friendly to parents and children. All right. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual.

Business School News | General | P&Q Podcast "Business Casual"
Why Women MBAs Still Make Less Than Men
Maria |
May 24, 2023

Full Episode Transcript:

John Byrne: [00:00:00] Hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast. We want to talk about international students. Schools are now reporting that a good number of their international recruits who were admitted to programs this fall haven’t been able to show up or have changed their mind.

At the University of Illinois, the school, the Gies College of Businesses, lost about 200 international students in its Master of Finance and Master of Business Analytics programs causing a $7 million hit. To their budget at UC Davis Graduate School of Management, 40 students didn’t show up who were admitted, and that’s resulting in two and a half to $3 million hit on their budget this year.

Both of these things have occurred before the announcement of a hundred thousand dollars tax on H one B Visa. Which will make it more difficult for many employers [00:01:00] to hire international students and keep them in the US for an extended period of time. And we’re getting the new class reports of the, of the new cohorts of students who’ve arrived on campus in the fall of this year.

And Carnegie Mellon is. Down 30% for their international cohort over the past two years. UCLA Anderson School is down 25% over the past two years, and schools are preparing for the worst because of the H one B Visa decision which could affect future employment. Caroline and Maria, my cohosts are in the market helping people get into the best schools in the world.

And Caroline, what do you think?

Caroline Diarte-Edwards: Yeah, definitely seeing concern among international candidates and people holding off on applying for the US schools. So it’s really a shame. I think the international schools, particularly the schools like Inea and London Business School and the other top.[00:02:00]

International European programs will benefit, they’ll get talent that might otherwise have come to the us, which is great for those schools. And I’m very fond of those schools, but it is sad as from the US perspective for sure. On the other hand, you could also take the perspective that.

If you do have options for your career post MBA that don’t require that you absolutely have to stay in the US as an international candidate, then now could be a very good time to apply, right? Because definitely application volume will be down and schools will be perhaps. More open to candidates that might otherwise have been waitlisted or rejected in the past.

For some candidates, this is actually a fantastic opportunity to get into a top school, but from, for, at least from the school’s perspective, it is a shame because, I’ve experienced firsthand the value of a very internationally diverse classroom and the value that brings with a [00:03:00] diversity of perspectives that enriches the learning experience so much for everybody.

Enriches the debate and bring so much to the academic experience as well as the the network and the social experience. So it’s everybody’s loss, right?

John Byrne: Very true.

Caroline Diarte-Edwards: And I think it’s a very myopic perspective that the US government takes that. There needs to be a more of a refocus at US educational institutions on the domestic market because those international applicants bring a lot to the domestic students in enriching their learning and enriching their network.

Of course bring a huge value to the US economy when they stay. So there are very impressive statistics on the value of immigrants to the US economy. So Indian immigrants, for example, are only about one and a half percent of the US population, but they have founded to date about 8% of all the tech startups in the us.[00:04:00]

And for sure some of that top talent from India will now not come to the us. They will go to perhaps they will stay at the great schools that we’ve talked about in India, or they will go to other international schools. So for sure it will be a loss to the us learning experience and to the US economy.

John Byrne: Maria, you run applicant lab which is a platform that helps applicants get into highly selective schools. And many of the people who use your product are international students. What are you seeing?

Maria Wich-Vila: Everything Caroline is saying concern is think a delicate way to put it.

And I think it’s because as the more affordable provider in the market, I tend to get the applicants who maybe they don’t have the family business to fall back on. Maybe they don’t have, large sources of income elsewhere in their lives. And so I think the concern is very real and very merited, right?

I can’t. In good faith, tell someone, if they [00:05:00] really start, sit down and do the math and start to do, run the numbers, if they just assume that things are going to stay as is. And this is the big caveat that I’m, I want to get to in a second, but if we assume that things stay as is and if someone really is from a lower income tier from Nepal or India or some of the other countries that I work with, yeah, maybe sit down and do that math and think about, okay, if I do have to come back to Nepal afterwards, how will I pay back that loan? There, there is though some good news. Even if we assume that things stay status quo, which I hope, and I’m pretty, I’m I think it’s, I’m cautiously optimistic that they won’t.

But there are other markets as well. So I’ve had a lot of candidates, or former clients, I should say, graduate from business school, not be able to get jobs in certain in countries and then. Being able to move to Dubai. Dubai for some reason, has started attracting a ton of candidates, primarily from South Asia but from other parts of the world who might be having trouble getting some of those work permits.

You could do worse than live in, Dubai’s not perfect, but [00:06:00] you could also do worse than live in Dubai, right? The salaries are pretty high. The standard of living, if you have a white collar job there is, it’s not the worst outcome. So it’s not I can’t stay in the us. That’s it.

There’s no other it’s not a binary of, it’s either the US or it’s nothing. And then I think the second point is I, we’ve just seen. So many things, let’s take something from a different facet of policy. The tariffs, right? The tariffs were announced and the markets went crazy, and in the months that have followed, oh, actually, here’s the tariff, but this one company, their products aren’t gonna be subject to the tariff.

And then there’s this other company that maybe they’re not gonna have to pay the same tariff. And I can’t help but wonder if some of these. Some of these very large companies that are getting tariff exemptions, their ability to lobby for. The H one B, maybe lowering of the H one B fee. If they’ve been able to successfully lobby tariffs, they might be success, able to successfully lobby against these, true, these [00:07:00] visa fees.

And a lot of these big companies, these big tech companies are in fact some of the largest employers of post MBA talent in the us. So I am cautiously optimistic that. This could be, hopefully right now it’s the big, the flash and storm and the, the making, the big splash, right?

Everything’s about showmanship and making the big splash. And maybe in the aftermath of the storm, that initial PR media storm, maybe the reality will start to calm down a little bit. Yeah, the other good news is that if you’re applying now, that means you would enroll in 2026. You would, if it, if you’re talking about the US two year program, you would graduate in 2028.

At that point, who knows what might happen. I like to think that what we have seen so far in terms of the Visa policies, hopefully. Roughly the floor about as bad as it can get. I think if they start implementing a similar thing to OPT, that could be the same thing. But if we just assume that okay, right now what’s been announced is that these foreign students all have to do, you can’t stay here, you have to [00:08:00] go someplace else.

It, we assume that’s like the initial negotiating position. It’s just gonna chip, it’s just gonna get, it’s got nowhere else to go. It’s even worse. So we’ve, we now have two and a half years roughly until. People applying now would have to really implement, or be really affected by this in a.

In a pragmatic and tangible way. And so that’s why I’m hoping that the little chipping away and the chipping away things will start to get a little bit better and a little bit better and a little bit better like we’ve seen with other facets of policy. Didn’t like a bunch of the CDC employees that were all fired under Doge didn’t more than half of them I think were recently rehired.

Yes. Back again true. Whatever you think of the policy, it seems like some of the policies are. Being slowly walked back. And so I think if you. If you’ve got an adventurous spirit, I, and by the way, if you apply now, sorry. I know I keep going, but I like, if you apply now, let’s say you get accepted, you don’t have to show up until August of 2026.

So that will give you [00:09:00] time, like definitely. Apply now and see what happens between now and August of 2026 to make the decision to not apply now, because you’re rightfully scared. I’m not blaming anyone, but to not apply now, maybe by maybe six months from now he’ll be like, ha, just kidding. I’m doubling the number of H one Bs.

Yeah, we have no idea what’s gonna happen. So things are So give yourself that optionality.

John Byrne: Yeah. And things are so uncertain that could very well happen because, one day at tariffs are on one country the next day they’re not one day they’re pausing the ab the interviews for student visas, the.

Say they’re not there’s litigation all over the place, challenging many of the presidential actions that have been taken that have put them in limbo despite all the headlines. So it’s, it, there’s more uncertainty than there is certainty about any of these things. And as you point out, you, if you [00:10:00] did apply this year, the odds are gonna be in your favor if you’re an international student, frankly, because there is no question.

That international applicant volume will be down at all the top schools in the us, which means that to maintain some semblance of a global class. Admission directors are going to have to dig a little bit deeper into their international applicant pools to select candidates. In a way, if you play the long term and in the BA, in, in many graduate degrees or long term bet, I think you’re gonna be.

Oddly better off. And it may even be that the schools will really even go out of their way to help international students in ways that they haven’t in the past because of these actions in Washington. And what do I mean by that? Just a more welcoming reception than the already welcoming reception you would get hiring immigration lawyers and people that can help you.

If in fact there is a [00:11:00] challenge of one kind or another. I think the takeaway is not to be discouraged and throw up your hands to say, ah, I always dreamed of coming to the United States and getting an MBA or a graduate degree in business. Use this as an opportunity to actually increase your odds of getting into a better school with the understanding that when you get out there, probably most likely be an administration change and a change in these policies if they even get completely adopted as Maria points out.

Wouldn’t you think that’s the best strategy, Caroline?

Caroline Diarte-Edwards: Yes, I agree. I think that it’s good to take a longer term perspective because it is such a long timeline, right? If you’re applying to a top two year program as you say, you’re gonna be coming out of the program at the end of the Trump presidency and things may look very different.

And Maria rightly points out that. Everything is very volatile, right? So one thing gets announced and the next week it [00:12:00] gets rolled back, right? They’ve done so many things where they’ve realized, oh, actually that was a really bad idea after all. So

They’ve changed things. So things may not it might, may not turn out to be as bad as we fear.

And then I would also encourage candidates. To apply to the US schools, but why not hedge your bets and apply to an international program as well? Agreed in a time of uncertainty. As Maria said, create options for yourself. And so I would encourage candidates to apply to the top US programs, but also apply to top international programs as well and see what offers you get.

And then you can make a decision. As Maria said, it will be closer to the time when you would be starting the program and there may be more clarity about the situation in the US and what your options are in international markets as well. So I think that given the current circumstances, a good strategy is to hedge your bets and apply more widely than you might [00:13:00] have otherwise done.

John Byrne: Plan Bs are good. Let me just say business schools in the US have for years advised international students that those should have a plan B in the event that they can’t get with a US company. The other thing to, to keep in mind incidentally, in terms of MBA employment is that most of the companies.

That basically employ the lion’s share of MBAs are all global concerns. So you can be hired here and if there’s any challenge in getting you employed here in the us you can simply start in an office outside the United States with a hope of coming back when things clear up. So that is also another important thing to keep in mind.

And I’ll just say this. Despite whatever messaging you’re reading in your local newspapers or on your streaming platforms or television stations about how immigrants may not be welcome in the us that’s not true at all. Universities are diverse places. Welcoming. [00:14:00] Embracing loving the diversity of their students and particularly those from different cultures and backgrounds that enrich the educational experience.

There is no Dean that I’ve ever encountered who said they want fewer international students. It’s the exact opposite. They’re putting out message after message, telling people that they’re still welcome and wanted. Needed in the classroom. Now, Maria, in the past we’ve seen applicants who try to say, okay, can I time my application and my enrollment in a program to what I think might be the next recession?

And we know that in recessions applications go way. In part because some people lose the opportunity to gain advancement in a recession. Some people get unemployed. Some people just realize, hey, a recession is a good time to take a time out and get a new educational credential, which may allow me to do things I otherwise can’t do.[00:15:00]

But it’s almost impossible to time a recession and I’m imagining it’s impossible to time what’s going on here now.

Maria Wich-Vila: Yeah. I mean if we could all time, when everyone’s been talking about a stock market crash that to, not to bring another disparate topic in, but like everyone’s been talking about, it’s a bubble.

It’s a bubble. I’ve been hearing ’cause a bubble for a year and a half. True. Yeah, you can’t time or ask, for example, ask the people who enrolled in business school, like who got into business school in 2020. Like there’s always gonna be these external shocks. We can try to predict a recession, but who knows if it’s going to happen?

Who knows if there’s going to be some sort of virus or the opposite of a virus. Maybe there’ll be a virus that helps us all live healthily forever. Who knows? There’s so much uncertainty out there that who knows what to do. So I think. I think yeah, have that optionality. I think go ahead and apply.

Now if there is a recession though, which everyone seems to think is coming at some point, at that point, it’s going to be harder to get accepted. And as Caroline has pointed out, so rightfully, if other international, high quality international students are [00:16:00] spooked by the current H one B talk, now is your chance.

International candidate. Jump in there, shoot your shot like you might be able to get into a school, assuming of course that you’re qualified, but. You might have a lot less competition now than you normally will, so this could be a golden opportunity for you. And one final as one thing that I wanted to point out was that I was thinking, okay, Maria, let’s say that, you just said that maybe there’s gonna be walk back of some of these and there’s gonna be, maybe he’s gonna change.

But even if there isn’t a change, right? Let’s think about this. The companies themselves are gonna have, and you started to alluded to this John, when you mentioned that a lot of them are global concerns. They’re gonna have now a two year window in which to say. Okay. We know that we’re not gonna keep these people in the states, so let’s open a huge office in Vancouver.

Let’s open a brand, an enormous new office in Toronto. Whatever that is. Because I was thinking back to over the summer when it looked like maybe a bunch of international students wouldn’t be able to get any student visa at all. And I know that some of the business schools we’re looking [00:17:00] at, do we rent out some space in Toronto and do Zoom classes?

We do a hybrid. What we did during COVID. I’ve heard that. I think Rice, I was actually having dinner last night with a dear friend who was, say he’s from Texas and he was saying that Rice has some sort of a campus in Paris and that they are leaning really heavily on their global campuses around the world to still be able to service these students who had gotten accepted.

So things like that, like if. Even if our sort of my very cautious and perhaps irrational optimism turns out to not be true, let’s say the things get, the OPT is banished and all, everyone is banished and it’s the worst case scenario. Again, there’s gonna be two and a half years for these companies. To quickly find, okay, fine, we’re gonna open up an office in Mexico City and we’re gonna pay people really well and we’re gonna what?

Whatever that is. ’cause they’re, the companies are still gonna want the talent, right? Just because the political administration doesn’t want the global talent in the country. That doesn’t mean that the country’s employers don’t want that talent. They [00:18:00] want that talent, they want that intellect, they want that energy and that drive to make their companies better and to make more money.

So they have a very strong incentive to not only be lobbying for these. Visa changes to go away, but if they don’t go away, they have a very strong incentive to come up with some way to provide, to provide those incomes and to provide those perks and some sort of a compromise type of situation.

So again I think if you’re applying now, if you’re going in with eyes wide open, shoot your shot. That’s my, I would absolutely tell people to to try that.

John Byrne: Yeah, I totally agree. And, generally this is my rule of thumb and Maria and Caroline, you may or may not agree with this, at the top MBA programs, they’re so selective that the people who apply to them generally are very self-selecting group.

So I always say that roughly 80% of the school’s applicant pool. Is qualified to actually get accepted, get in, do [00:19:00] well, and land a good job. And yet we know that at Stanford, the acceptance rate is 6%, that Harvard is 12 Wharton and Columbia is, a little under 20 or so. So there are a lot of really good candidates who aren’t getting in.

Which leads me to this, if you’re an international student who thinks okay, so these US schools just might dip a little more into the domestic pool to make up for the offset of international candidates. As it turns out, there is a little notice. Clause in the big beautiful tax bill that was passed here under Trump that places severe limits on federal loans for graduate students.

Now, the current grad plus loan program allows students to borrow up to the cost of their graduate programs. That comes to an end in July of next year. After that, grad students borrowing will literally be capped at [00:20:00] 20,500 bucks a year with a lifetime graduate school loan limit of a hundred thousand. That’s a big deal because, at the top MBA programs it’s not on typical.

For a student to borrow over a hundred thousand dollars easily. And so these caps are also going to affect domestic enrollment. So again, that, that contributes to your ability as an international candidate to get in both. The likely decline in competition not only from internationals but also from domestic students here, interestingly enough, that Bill, which passed has different limits for a professional graduate degree, but the bill basically says that only med school and law school qualify as professional degrees and not business school.

That’s another wacky thing that’s happened that will affect. Domestic enrollment as well. So I, I side with Maria and [00:21:00] Caroline to me the advice is, look long term. Don’t be affected overly affected by the change in policies in the US or the climate here. Understand that if you apply now and you matriculate next year and you graduate in two years after that you’re gonna be facing probably a very different environment.

Also understand the odds are in your in your favor, in getting into a highly selective, really good program in this coming year. And know that, while people too often calculate the value of an MBA based on short term variables, like what’s my starting salary gonna be? What is my sign-on bonus?

The truth is the MBA has enduring value over your lifetime. So it rewards you over your entire career and not just for the first or second years. And you can’t go wrong by graduating into a network of helpful and supportive people from a great school and [00:22:00] receiving a great education. So I think bottom line, we’re telling you apply.

Don’t get convinced by your colleagues or anyone else that this is a bad time to come to the us. Opportunity. Some of the best opportunity come comes when people perceive there to be significant challenges. And I think this is really true with business school. We hope we convinced you to come and try and hedge your batts too, as Caroline noted.

I think that’s really super important to have a plan B when you apply and toss a bunch of apps to the European schools which have excellent superb world class MBA programs and real international cohorts. 90% of the students not from the countries where the schools reside. Toss a bunch of them in your mix for your target schools to give you these different options at the end of the day.

This is John Byrne with Poets and Quants. Thanks for listening.

Maria

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