The value of a master's degree

3 George Benaroya
Agenda
►How much more would I earn? Premium in the US and around the world
►How much does it cost? Tuition cost. US, Europe, Asia, South America
►Education, the ticket to Global Mobility
►Is September 2020 the right time to start?
►Visa update
►Benefits of a global network
►It’s taking classes online fun?

Finance for Marketing Decisions
G Benaroya Lecture
4 George Benaroya
▪ Career at Procter & Gamble, Tetra Pak, Nivea and
now Private Equity as Vice President Finance, Global
Controller & CFO.
▪Half of career at Headquarters and ½ running local
operations ($20 Mio to $ 2 Billion) in Asia, Europe, Latin
America and the US.
▪ Visited clients, consumers and factories in over 190 countries to
enable profitable growth, powered by Finance
▪Professor at NYU and Global Program, University of Salamanca
▪Contact: https://www.linkedin.com/in/georgebenaroyacfo/
About me. George Benaroya

5 George Benaroya
Return on Investment (ROI) for a master’s degree
𝑅𝑂𝐼
=𝑂𝑝𝑝𝑜𝑟𝑡𝑢𝑛𝑖𝑡𝑦 𝐶𝑜𝑠𝑡 𝐻𝑖𝑔ℎ𝑒𝑟 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠𝑇𝑢𝑖𝑡𝑖𝑜𝑛 ++
Additional Benefits
✓ Global mobility booster
✓ Networking

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Those with a master’ degree earn 20%, ~$450,000 more
$97,916
$96,772
$77,844
$64,896
$46,124
$43,316
$38,792
$30,784
Doctoral degree
Professional
degree
Master's degree
Bachelor's degree
Associate's
degree
Some college, no
degree
High school
diploma
Less than a high
school diploma
Median annual earnings ($) 2019
Source: Bureau of Labor Statistics. Current Population Survey
Median annual salaries in the US are
▪ With a university degree $64,986
▪ With a master’s degree $77,844
(20% higher)
▪ Over 35 years, that is worth $450,030

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Master degree salary premium by type of work
Source: Bureau of Labor Statistics. Data is from U.S. Census Bureau, American Community Survey (2013)
Fnancial
Services
Financial
Managers
Marketing &
Sales
Managers
Environmental
Scientists
&
Geoscientists
Network,
Computer
Systems
Administrators
Information
Security
Analysts
Counselors
Social &
Community
Service
Managers
Editors
Registered
Nurses
Postsecondary
Teachers
Series1 89% 41% 38% 29% 26% 18% 35% 30% 26% 19% 14%
89%
41% 38%
29% 26%
18%
35%
30%
26%
19%
14%
Median annual compensation by occupation and type of education
Bachelor's $90,000 $78,000 $80,000 $62,000 $70,000 $85,000 $37,000 $50,000 $50,000 $63,000 $43,800
Master's $170,000 $110,000 $110,000 $80,000 $88,000 $100,000 $50,000 $65,000 $63,000 $75,000 $50,000
Premium earned. Workers
with master’s vs. bachelor's degree

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Around the world, a master’s degree pays 20% more
Our survey
▪ Global. 150 responses from US, Latin America,
Europe, Asia-Pacific, Middle East, and Africa.
▪ Seniority. 65% of respondents were hiring
managers holding senior positions (CEO,
President, C-Suite, Director).
▪ Industries. All 11 industry groups covered.
BLS survey
▪ The Current Population Survey covers 60,000
households across the US
20% 19%
0%
10%
20%
30%
40%
50%
60%
BLS Our Survey

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Most regions pay a 20% premium, Latin America more
19%
22%
20% 20%
16%
World Latin
America
Asia-
Pacific
Europe,
Mid East
Africa
North
America
How much more would you pay a candidate with a master’s degree?
Global Survey, July 2020. Responses from US, Latin America, Europe, Asia-Pacific, Middle East, and Africa

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Most industries, globally, pay 20% more for a master’s
19%
21% 21% 21% 20%
16%
All respondents IT Telco Consumer
Staples
Financials Consumer
Discretionary
Other
Other includes Industrials, Materials, Utilities, Energy, Health Care, Real Estate
How much more do you pay for a master’s degree?

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Those holdings a masters would pay more
19%
14%
23%
All respondents No Master's degree Master's degree
How much more would you pay a candidate with a master’s degree?

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49% of respondents held a master’s degree
49%
38%
48% 49%
56% 57%
Total Financials Consumer
Discretionary
Other Consumer
Staples
IT Telco
Respondent’s holding a Master’s degree by industry Group

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Do Master’s degrees come with an attitude?
▪ 44% of hiring managers wouldn’t pay more for a master’s degree.
Their concern is that candidates would “have an attitude.”
▪ The day I joined Tetra Pak, my boss taught to use “We” instead of “I”.
He was a colorful leader, so he went on to point out that “I” is used by
New York lawyers. Twenty years later, as a professor at New York
University, I teach my students that tip, emphasizing the “don't behave
like a New Yorker" part.
▪ You can have a master’s and be humble too.
▪ Many of those who would not pay more for a master’s degree said
that “a master would have a positive impact on career potential,
particularly when retention is an issue”.
Picture is from The Economist

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Unemployment is lower for those with a master’s degree
1.1%
1.6%
2.0%
2.2%
2.7%
3.3%
3.7%
5.4%
Doctoral degree
Professional
degree
Master's degree
Bachelor's degree
Associate's
degree
Some college, no
degree
High school
diploma
Less than a high
school diploma
Unemployment rate. 2019
Source: Bureau of Labor Statistics. Current Population Survey
In 2019, during a period of “full employment”,
unemployment was much lower for those with a
master’s degree
▪ Unemployment rate was 40% lower for those
holding a master’s degree vs. those with a
High School diploma (2.0% vs. 3.7%)
▪ Unemployment rate was 20% lower for those
holding a professional or master’s degree vs.
those with a university degree (1.6% & 2.0%
vs 2.2%)

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Agenda
►Visa update

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Tuition cost, graduate degrees, in the US
$11,926
$13,982
$18,947
$27,350
$43,848
All Public Public,
75th PCTL
US Total Non-Profit
Total
Non-Profit
75th PCTL
Tuition & Fees, by University type (2018)
Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS)
In state tuition

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Ivy League’s tuition cost. Is it worth it?
return on investment definition business return on investment definition economics▪ The total cost to attend Yale is $78,725 a year.
▪ The Economist calculated the value of getting an
education across 1,275 universities in the US.
▪ Yale University was ranked 1,270th (worst 5 in the
nation, despite been an Ivy League). Their median
earnings are $-9,592 per year, or -335,720 lower
than comparable schools over 35 years.
▪ The Economist has one of the best tools to
compare schools. It’s able to account for students
who were hard working, intelligent and rich and
well connected to begin with. It calculates “the gap
between how much money its students earn, and
how much they might have made had they studied
elsewhere”. Available (free) here.

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Master’s degree cost around the world
USD/year USD/year
United States Hong Kong
Harvard $49,448 University of Hong Kong $18,633
American University $44,394 Chinese University of Hong Kong $18,506
Yale $43,570 City University of Hong Kong $15,315
New York University $31,471
Peru Colombia
Universidad Del Pacifio $10,688 Universidad Javeriana $6,488
Pont Univ Católica (PUCP) $9,394
Argentina Europe
IAE Business School (1 yr MBA) $28,000 Oxford $36,540
Di Tella $8,507 Complutense de Madrid $8,670
Univ de Buenos Aires (UBA) $2,136 Salamanca International Studies $8,664
Cost per year, 2 years programs
Source: Individual schools (link on each price)

19 George Benaroya
At its midpoint, a master’s is worth $200,000
$450,000
𝑅𝑂𝐼
=𝑂𝑝𝑝𝑜𝑟𝑡𝑢𝑛𝑖𝑡𝑦 𝐶𝑜𝑠𝑡
−$130,000
𝐻𝑖𝑔ℎ𝑒𝑟 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠𝑇𝑢𝑖𝑡𝑖𝑜𝑛
-$38,000
++
US Median earnings and tuition cost
Additional Benefits
✓ Global mobility booster
✓ Networking

20 George Benaroya
Agenda
►Visa update

George Benaroya21Finance for Marketing Decisions
G Benaroya Lecure
Country GDP/capita
Luxembourg $106,300
Switzerland $61,400
Hong Kong $61,400
United States $59,500
South Korea $39,400
Spain $38,300
Chile $24,500
Uruguay $22,400
Argentina $20,900
China $16,700
Brazil $15,600
Peru $13,300
Bangladesh $4,200
GDP per capita and ovarian lottery
Imagine there are two
identical twins in the
womb.
And a genie says to
them,
“One of you is going to
be born in the United
States, and the other in
Bangladesh.
The one born in the US
won the lottery”
Warren BuffetSource: CIA’s Factbook
GDP is at Purchasing Power Parity

G Benaroya Lecture
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Birthplace impact on earnings potential
8
37
24
66
38 38
24
14 13 15
10 10
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
Peru United
States
Spain Luxembourg Switzerland Hong Kong South Korea Uruguay Argentina Chile China Brazil
United States
37th floor $59,800
Luxembourg
66th floor $106,300
Peru
8h floor $13,300
“Floor at Birth”
163
GDP per capita at birth, placed across a 163 stories tower,

Google Founder
Sergey Brin, Russia
University of Maryland

Tesla, CEO
Elon Musk, South Africa
University of Pennsylvania

Microsoft CEO
Satya Nadella, India
University of Wisconsin

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Agenda
►Visa update

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Fall 2020. Lowest opportunity cost in 10 years
return on investment definition business return on investment definition economics
▪ For many students, the highest expense of
pursuing a master’s degree is the money they
would have made if they were employed
(@$605,000 per year, that’s $130,000).
▪ For those who are unemployed, that cost is
reduced to 0.
▪ In 2 years, the economy is likely to recover
and thus they will be reentering the job market
at a much better timing

29 George Benaroya
Fall 2020 advantages
✓ On-line classes reduces travel cost
✓ In-person optional sessions. 1-2 weeks sessions
in November (U. Salamanca) will enable students to
benefit from both online and in-person modules.
✓ Go-local option enables students to take classes
from campuses around the world (NYU).
✓ Deadline extended from March 1st to August 25th for
classes starting in September 2020 (U. Salamanca)

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Agenda
►Visa update

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George Benaroya
The US has made it harder to study in the US

32 George Benaroya
The EU has lifted all travel restrictions for students

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Agenda
►Visa update

G Benaroya Lecture
34 George Benaroya
The 6 degrees of separation
Level 1
10,000 1,000,000
100
Level 2 Level 3 Level 4
Six degrees of separation is the idea that all people are six, or fewer, social
connections away from each other. As a result, a chain of "a friend of a friend"
statements can be made to connect any two people in a maximum of six steps.
People you know X X100 100

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Diversity is key to grow a network
Level 1 contacts. 20 of 193 countries
63
68
70
90
91
99
112
114
156
175
207
227
247
273
278
283
286
314
344
Japan
Mexico
Netherlands
Italy
Peru
Sweden
Spain
Canada
Singapore
Turkey
France
UAE
Brazil
Argentina
India
Switzerland
China & Taiwan
Germany
United Kingdom
United States 6,542

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12K->2M->100M
Level 1 Level 2 Level 3
Over 100 million Level 3 contacts. Through diversity

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Agenda
►Visa update

38 George Benaroya
You can’t do this online
✓ In-person, 2 weeks session in November
(University of Salamanca) will enable
students to travel to Europe, meet with
faculty and other students, network and
have fun.
✓ The program is scheduled to allow
alternative programs the weekend before,
during and after the sessions

43 George Benaroya
Conclusion
▪ Education increases our earnings potential.
▪ Higher tuition doesn’t mean higher earnings.
▪ Education improves global mobility.
▪ Education increases networking reach.
▪ Unemployment is high. Now is a good time.
▪ Some schools offer virtual + in-person.
▪ Admission for September ’20 is still open.

The value of a master's degree

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