Dive Brief:

• College Professors Damon Phillips, at Columbia Business School, and Jennifer Merluzzi, at Tulane University, conducted a study of 400 MBA graduates of the top US business schools who went into careers in investment banking. Their findings suggest that the labor market doesn’t really value specialists as much as experts claim.

• The subjects of the study who had taken specialized courses in investment banking principles actually received fewer job offers in the five years after graduating than those who studied a generalist path in college. Professor Merluzzi states, “Specialists [who studied investment banking] were definitely penalized by the market. Not only were they less likely to receive multiple offers, but they were offered smaller signing bonuses (36%).” 

• In a post-recession job market, MBA students were encouraged to specialize as a way to stand out from peers and gain a competitive advantage. However, this did not pan out as expected, as employers felt safer hiring candidates with broader experience and education. 

Dive Insight:

The disparity of specialized investment banking degree holders vs. generalist degree holders comes down to the value that employers place on this experience. When asked about the reason for this, Merluzzi explains, “Experienced hiring managers said they preferred people who had a diverse range of skills…People who’ve demonstrated talent across different areas seem to have an edge.”

It’s important to note that the study does not discount other industry specializations, which are mandatory for success and higher earnings (surgeons, electricians, etc.). Candidates can still demonstrate versatility by taking on other types of work projects that extend their knowledge and skillsets.