Comparing Career Opportunities and Salaries: PhD in Economics vs. MBA from Harvard Business School

The career paths and potential salaries for those with a PhD in Economics and an MBA from Harvard Business School differ significantly, reflecting the different focuses and skill sets developed in each program.

Overview of Program Structure

Obtaining a PhD in Economics and an MBA from Harvard Business School represent two different academic journeys, each with its own unique focus and set of skill sets. A PhD in Economics delves deeply into the “WHY” questions, with a curriculum that includes advanced coursework, comprehensive exams, and independent research leading to a dissertation. On the other hand, an MBA is a professional degree that focuses on “HOW” questions, covering diverse business domains such as management, marketing, finance, accounting, operations research, and decision sciences. This article aims to explore the differences between these two programs in terms of career opportunities and potential salaries.

Challenges and Career Paths

The average MBA graduate, especially from top-10 business schools like Harvard, often has a significantly higher net worth compared to the average Economics PhD. This is due to the different career trajectories and the value that the job market places on each degree.

Harvard MBA vs. Economics PhD: Net Worth Comparison

Harvard MBA graduates frequently command higher salaries during mid-career and well after. According to recent data, the average starting salary for top 25–20 MBA programs is around $175,000. However, a PhD in Economics typically does not immediately translate into comparable earnings. While an Economics PhD can lead to lucrative careers in academia, government, or industry, the starting salaries are generally lower and can be comparable to those of a Master's degree in the same fields.

Industry and Government Opportunities

Those with a PhD in Economics have strong foundational skills in building economic models, which can lead to high-paying roles in both the private and public sectors. They can work in consulting firms, financial institutions, and regulatory agencies. In these roles, they might earn competitive salaries and enjoy greater job security. A PhD holder in Economics might also work in government roles, where salaries generally are lower but are still respectable and come with added benefits of job stability and a significant impact on policy.

Academia and Business School Careers

For those with a PhD in Economics who aspire to academia, their potential salary can vary widely. Junior faculty positions often pay average salaries, while more senior roles can be quite lucrative. Additionally, a PhD holder in Economics has the opportunity to secure a position in a business school, which can significantly increase their earning potential. These roles usually come with substantial salaries and benefits, offering a blend of teaching and research responsibilities.

Industry Preparation and MBA Curriculum

The MBA curriculum at institutions like Harvard primarily equips graduates with practical business skills, making them highly attractive to major companies for a wide range of job roles. The focus is on decision-making, strategic planning, and business operations. While some economics coursework is included, it is often at a lower level and more introductory in nature. This makes the MBA a strong preparatory program for a wide array of business roles.

Differences in Educational Pathways and Expectations

Unlike an MBA, which is a professional degree focused on immediate job placement and practical skills, a PhD in Economics is more of an academic and research-oriented degree. The PhD program typically involves two years of coursework, comprehensive exams (or prelims), followed by a dissertation. The level of mathematics and theoretical rigor in an Economics PhD is often comparable to that of fields like Physics, requiring a deep understanding of complex economic models and theories.

In contrast, the MBA program, though rigorous, places less emphasis on advanced theoretical knowledge and more on real-world business applications. MBA programs innovate through the integration of diverse business disciplines, preparing students to tackle practical business challenges.

Conclusion

While both an MBA and a PhD in Economics are valuable degrees, they serve different purposes and open up different doors in the job market. The MBA provides a broader skill set and immediate job placement opportunities, while a PhD in Economics offers deep academic expertise and research capabilities that can lead to highly specialized, well-paying careers in various sectors.

Ultimately, the choice between the two should be based on individual career goals, interests, and long-term aspirations. Prospective students should carefully consider the nature of each program and how it aligns with their professional objectives.