What Is Behind Declining GMAT Volume in the United States?

At the 2013 GMAT Summit, held on December 6 in Los Angeles, GMAC revealed some interesting information about the growth of GMAT volume overseas and the decline of volume in the United States. In Testing Year 2013 (which ran from July 1, 2012, through June 30, 2013), for the first time ever, the number of GMATs taken volume outside the United States outpaced the number of tests taken in the U.S. Take a look at the trend over the past five years:

GMAT Volume by YearSource: Graduate Management Admission Council, Profile of GMAT Candidates, 2008-09 to 2012-13

The growing interest in the MBA isn’t surprising; as young professionals in India and China strive to distinguish themselves and bachelor’s degrees are barely the cost of entry in competitive fields, it stands to reason that more and more of those young people are interested in graduate degrees as a way to stand out from the pack. In India alone, much has been made of the “MBA bubble” that drove the opening of dozens of new business schools. Even given that the MBA market in India has softened considerably, it’s no surprise to hear that the test is now far more popular there than it was just 10 years ago.

But what about in the United States? No one would describe the American economy as “robust” since the 2008 financial crisis, but overall the economy has been on an upward trend, and most reports on MBA graduates’ job prospects have been quite bullish. So why has GMAT volume in the United States been stuck in a consistent downward trend since Testing Year 2009? Is the dramatic drop in application to law schools a harbinger of what’s to come in the MBA space? Probably not, if for no other reason than it’s been a very gentle glide down so far. If there were going to be a more dramatic drop, it probably would already have happened right now.

However, this doesn’t help explain what’s actually happening… Could it be decreased interest in MBA programs in the United States? While most business schools saw a drop in applications vs. the pre-2008 heyday, many programs (top-ranked ones, at least) have seen a healthy recovery in application volume. Could it be that more applicants are choosing the GRE over the GMAT, and applying to business schools with the former? It’s possible, although the schools that do share such data say that the percentage of applicants submitting GRE scores is still in the single digits. Neither of those is necessarily the smoking gun.

What do you think? Is it just a decline in interest in MBA programs overall? Should American business schools be worried about this trend?

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One Response to What Is Behind Declining GMAT Volume in the United States?

  1. I’ll bet the dip over the last year in GMAT takers has to do with the new format. I know that I took the exam a year before I needed to because I wanted to avoid the hassle of being a guinea pig the following year. I’d bet that the U.S. trend overall is steadily negative, but last year’s pool includes a bunch of folks like me who took it a year early.

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