Just what are they teaching at that business school, anyway?
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American business schools are more adept at training future managers to lower wages than to increase sales, according to a new paper circulated by the National Bureau of Economic Research.
The paper looked at businesses in the US and Denmark and found similar results in both countries: Managers with a business degree oversee declining pay at their businesses.
- Wages fell by 6% within five years at US companies that hired managers with business degrees. In Denmark, wages at those businesses fell by 3%.
- The labor share of profits at US businesses managed by business school graduates decreased by five percentage points. In Denmark, the labor share decreased by three points.
It turns out that effective managers can come from anywhere—be it business school or an online, three-week pottery intensive. The researchers found that companies with business degree-wielding managers don’t see any increase in sales, productivity, investment, or employment compared to companies without business managers.—MK
