IS MBA a long term proposition?

This is some analysis that started out of a discussion with some collegues at my office. This discussion has kept re-surfacing around me for years now. The economy took a leap off just after I decided to join my MBA. Suddenly after slogging for two years (unfortunately from what the world classifies as a non-premier college), when I was ready to come back to mainstream world...I found MBA was not really a leap. Those who had joined the industry were doing pretty well and seemed to be at an apparent advantage.



To end this debate I have taken help of some realistic data....

Assumptions are..

1. We are comparing two persons who have passed out of Engg. sometime in 2002-03 from the same college. And please let's excuse IITs and NITs.

2. The pattern of shifts and jumps is what I have noticed and the percentage hike is also just an perceived trend.



OK.. Here is what the graphs look like (Click to enlarge)



The Yellow line is the net difference in income. For a MBA it starts getting favourable only after 10 years

The bad news is...
1- Yes you are at a disadvantage if you compare in absolute terms..
2- Though you start earning as much as him in the 4 year of him...You actually would breakeven and take a lead only from the 14th year or 12th year of your service.. A bit of tweaking here and there may bring it down to 10 years of service but that's how it is.

The good news..
1- From 14th year onwards from the day you start from the same college...you are the winner. So let's say for an average Indian with a life span of 70 yrs you are at an advantage for a longer period of time. And we are talking of incomes only. To be fair to our buddies we dont speak anything abt power, acheivement , excitement
2- Though the growth curves used here for both are exponential...That for your engg. buddy is more likely to flatten out. For you once you break that middle management ceiling your value increases real fast.

I am including the excel sheet for your reference.. Also included are the assumptions..

(Just click on the area n use arrows to scroll)