MBA vs. Master’s in Finance or Economics: An Overview

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 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.

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.

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.

MBA

A master of business administration degree often is obtained by men and women who have spent a few years in the workforce. In fact, many MBA programs require that candidates have worked in the business sector before applying to business school.

An MBA will 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 employers actually prefer job candidates whose education encompasses the bigger picture, and an MBA certainly fits that bill. 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. 

Earning an MBA can be expensive. If you want to attend a top-tier school like Wharton or Harvard, plan on spending over $150,000. Smaller private schools and even state universities may be cheaper but not by muchexpect to spend anywhere from $75,000 to $100,000.

The good news? A 2018 survey (the most recent figures as of February 2019) 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. MBA graduates may end up working in the technology sector, in sales and marketing for product and service companies, and for consulting companies.

Master's in Finance or Economics

Pursuing a master of science degree in finance 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. 

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. 

The cost of obtaining an advanced degree in economics or finance varies depending on the educational institution. The National Center for Education Statistics estimates "that graduate degrees cost anywhere from $10,000–25,000 and up per year. Public institutions typically cost less than private schools."

Many finance graduates go on to work at major corporations, global banks, and mutual fund companies. Economics majors often work in the private sector, but many also enter academia or go into research roles after receiving a master’s degree or Ph.D. 

Special Considerations

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, reducing 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.

[Important: Some MBA programs help prepare you for a CFA designation, especially those with concentrations in finance.]

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.

Key Takeaways

  • MBAs are more expensive to obtain than a master's in finance or economics.
  • Typically it takes two years to complete an MBA degree.
  • A master's in finance or economics may be completed in 12 to 18 months.
  • Median salaries may be higher for MBAs, depending on the job.