Freakonomics Radio 517. Are M.B.A.s to Blame for Wage Stagnation?
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Oct 6, 2022 
Daron Acemoglu, an MIT Institute Professor, discusses how MBA programs shape corporate leadership and contribute to wage stagnation. He reveals troubling trends: bosses educated in business schools tend to pay their workers less, despite rising productivity. The conversation dives into the prioritization of shareholder value over employee welfare and questions the true impact MBA-trained CEOs have on profits and wages. Acemoglu examines the ethical divide in business education and the broader implications for economic inequality.
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Data and Methodology
- The study used U.S. and Danish firm-level data matched with worker-level information.
- This approach allowed tracking of individual worker wage changes under different managers.
Correlation vs. Causality
- A correlation exists between the rise of MBA CEOs and declining labor share.
- Acemoglu investigates whether this correlation implies causality.
Impact of Business Managers
- Business school managers correlate with lower wages and labor share.
- Within five years, wages are 6% lower in the U.S. and 3% lower in Denmark.