When times are hard and the fear of unemployment looms above, what do people do?
Go back to school and get an MBA.
According to an article in the Financial Times, deans and admissions officials at business schools say that MBA applications increase during or just before an economic downturn, such as the one facing the U.S. right now.
The trend appears to hold true for Wharton as well.
“We have seen a nice strong uptake on the number of applications,” director of MBA Admissions and Financial Aid Thomas Caleel said.
At this time, however, Wharton cannot release any specific number of applications for this year’s incoming class because the deadline for round three - the final opportunity to apply for admission into the MBA program – has yet to pass.
The number of applications for the Class of 2008 was 6,189 and the number for the Class of 2009 was 6,649.
Harriet Barnett, the MBA admissions advisor at the MIT Sloan School of Management, said MIT’s MBA program has also seen a rise in applications, increasing 27 percent from last year.
A number of reasons contribute to this phenomenon.
During periods of economic development, employees enjoy bonuses and other perks from companies, Caleel said. Therefore, people are not motivated to put their careers on hold and give up their earnings.
But when a recession hits, careers become less stable, said Stacy Blackman, a Wharton alumna and former 34th Street staffer. She is the founder of Stacy Blackman Consulting, an admissions consulting firm for prospective MBA applicants.
“The job market is not as cushy,” she added.
An MBA can serve as a position of transition, Blackman said, particularly for those seeking to change careers.
In fact, it could even be a way for people to “escape the recession,” she added – by the time the students graduate, the economy may have picked up again.
That said, experts say that getting an MBA is beneficial at all points in life, not only at certain points of the business cycle.
In addition, the decision to pursue an MBA should be one made after taking into account a number of important factors, such as personal goals and the opportunity cost of two years back in school.
“The economy can certainly play a role, but it should not be the only motivating factor,” Caleel wrote in an e-mail.