What's happened to the rate of return to business masters?

While business masters degrees are popular with students wishing to enhance their career prospects, there is little evidence available on the pri- vate rate of return to these degrees in Australia. Furthermore, there is little evidence about the effects of the huge growth in graduates in recent decades and changing business conditions on the pro?tability of a business masters degree from an individual’s point of view. This is despite the expectation that there would be signi?cant consequences of the changes in demand and sup- ply to the relative income of higher degree holders. This paper presents esti- mates of the rate of return in Australia associated with the completion of business masters degrees over the period 2001 and 2011. The results show that for the average person, there are incentives to complete these degrees, and the private rate of return compares favourably with the real long term real bond rate. However, the pro?tability of an investment in a business mas- ters has fallen signi?cantly over time.