For many individuals looking to advance their careers in business, earning a master of business administration (MBA) degree may seem like an obvious way to get ahead. But if you work in the world of finance or economics, getting a specialized degree in your field might be a better alternative.
There are certainly advantages and disadvantages to each path. What it comes down to is figuring out which types of skills you’re trying to obtain and what job you see yourself pursuing once your diploma is in hand.
Finance or Economic Specialist vs. Business Generalist
The difference between MBA and non-MBA programs is the difference between a buffet-style business education – one in which you get a taste of every discipline – and one that’s intensely focused on one area.
For example, pursuing a master of science in finance degree means taking a deep dive into topics such as investment analysis, corporate finance, forecasting and risk analysis. In an economics master’s program, students can expect to take on advanced microeconomics and macroeconomics, econometrics and monetary policy. An MBA will certainly cover finance and economics, but it will remain more general and include other business subjects as well. While most advanced degrees in business are going to require solid math skills, the more focused programs tend to attract students who are particularly strong in quantitative analysis and critical thinking.
Many finance graduates go on to work at major corporations, global banks and mutual fund companies. Economics majors often work in the private sector as well, but many also enter academia or go into research roles after receiving a master’s degree or PhD.
If you know you’ll need these targeted skills to take your career to the next level, specializing might be the most rewarding path. However, shooting for a more comprehensive MBA degree also has merits.
A Well-Rounded Business Education
Many employers actually prefer job candidates whose education encompasses the bigger picture. There’s a benefit in learning something about a broad range of disciplines, from marketing to accounting and information technology. In a typical MBA program students gain exposure to all of these areas and, in the process, gain an understanding of how different parts of an organization relate to one another.
Typically, companies are willing to pay a premium for graduates with a well-rounded business education. A 2018 survey by the Graduate Management Admission Council, or GMAC, found that MBA recipients tend to take home more than those who follow a narrower track. MBA grads earned a median starting salary of $105,000 in its latest report, compared to $85,000 for those with a graduate degree in finance. (For more, see What Is the Average Salary for an MBA Graduate?)
Benefits of a Targeted Master’s Degree
Specialized programs do have some significant advantages compared to MBAs, though. For starters, graduates develop a specific skill set, which can make them more attractive to employers looking for experts in a certain field or subject. In addition, students can often complete these courses in 12 to 18 months, rather than the full two years required for most MBA degrees. That translates into significantly lower tuition costs. It also means more short-term earning potential, as graduates can reenter the workforce up to one year earlier.
On top of that, specialized programs typically don’t require several years of professional experience, a prerequisite for many MBA programs. Having a lower bar can be appealing to those who know they’d benefit from greater industry-specific knowledge but haven’t built a huge résumé yet.
However, this can be a double-edged sword. According to GMAC, employers see employment history – not just a graduate-level diploma – as a key driver of future success. Even if you obtain a specialized degree, companies are likely to look for some relevant work experience. So for many young professionals it pays to work for at least a couple years after receiving their undergraduate degrees, rather than rushing headlong into a graduate program. (For more, see Applying to Grad School: GPA vs. Work Experience.)
Preparing for the CFA Exam
If you plan on working in the realm of investments, there’s something else you might want to consider when choosing a graduate program. Many of the professionals in this field go on to earn the chartered financial analyst (CFA) credential, which demonstrates competence in areas such as accounting, ethics, money management and securities analysis.
Finance professionals can make their road a bit smoother by choosing a master’s program that incorporates much of the content for the CFA exam, lessening the amount of preparation they’ll have to do later. A list of graduate programs recognized by the CFA Institute is available on the organization’s website.
Many of the programs affiliated with the CFA Institute are aimed toward a master of science in finance degree. However, some MBA programs also help prepare you for a CFA designation, especially those with concentrations in finance.
The Bottom Line
For many professionals in the fields of finance and economics, a graduate degree can open up new career opportunities and increase their earning potential. Both MBA and non-MBA programs have certain pros and cons, so it’s important to evaluate your long-term goals before choosing which route to take. (For more, see Should You Get an MBA?)