International applications to U.S. full-time two-year Master of Business Administration (MBA) programs fell 17.1% this year, a steep decline that contributed to the total 10.8% drop in applications during the same period. Overall, graduate business schools in the U.S. received 9.1% fewer applications in 2019, with prestigious, top-ranked universities seeing the biggest dips.
This is despite the median annual base starting salary for MBA graduates at U.S. companies being the highest on record at $115,000 and over 90% of Fortune Global 100 and 500 companies planning to hire holders of the versatile degree this year.
The numbers from the latest Graduate Management Admission Council (GMAC) report show applications to American MBA programs have been falling for five years in a row, while Europe and Canada are seeing growing application volumes driven by international candidates.
Survey results indicate the global appeal of U.S. business schools has been diminishing due to a shortage of H-1B temporary worker visas and growing anti-immigration rhetoric in the country. The downward shift in preference for the U.S. among candidates began in 2009, says the report, and sharply intensified in the last few years as the Trump administration increased its scrutiny of visa applicants.
On the domestic front, a strong economy and the best labor market in decades meant fewer Americans were ready to leave the workforce and invest in an expensive master's degree. Although the report doesn't mention it, record levels of student debt possibly added to their hesitation.
As with economics departments, business schools are increasingly offering programs that have STEM designations in order to attract international students looking to take advantage of the longer work authorization period they grant. Forty-three percent of STEM-certified graduate management programs grew their international applications in 2019 compared with 26% of non-STEM programs.
Another bright spot is the Master of Data Analytics program, a STEM option. The majority of U.S. programs have seen overall growth in application volumes for the last five years, reflecting the explosion of the Big Data industry. IBM predicted the number of positions for data and analytics talent in the U.S. will increase to 2,720,000 in 2020.
U.S. Losing Global Race for Talent, Warn B-Schools
Canada, which has made immigration for young, educated foreigners easier in recent years and admitted 321,121 permanent residents last year, saw international business school applications climb 8.6% in 2019 and 16.6% in 2018. In Europe, international applications were up 0.9% this year. The percentage of business school candidates in Asia-Pacific that planned to study close to home rose from 41% in 2017 to 47% in the first half of 2019.
This regional shift in demand prompted GMAC to highlight the link between immigration and innovation and sound the alarm about America losing its ability to attract much-needed talent from overseas.
"In recent years, we have witnessed significant and unprecedented dips in interest in some regions of the world, especially the United States," said Bill Boulding, Dean of Duke University’s Fuqua School of Business and chairperson of the GMAC board. "Policymakers should pay attention to why international students are no longer interested in these regions—not because business schools affected could be hurt, but because this is an early warning to economies that they are losing the race for talent. And therefore, future growth."
Fifty business school deans and 13 CEOs have addressed a public letter to President Trump and other U.S. government leaders calling for the removal of “per-country” visa caps, reforming the H-1B visa program and the creation of a "heartland" visa that could help revitalize rural areas.