MBA students are known for being an ambitious lot, and taking every step possible to ensure their success in the business world. It may come as somewhat of a shock, then, that one of the most significant factors in determining not only their long-term earnings, but even the very industry they work in, is essentially out of their control. Paul Oyer of the Stanford Business School shows in recent research that the performance of the stock market during a business student’s studies has a significant impact on their likelihood of going into investment banking, which in turn has a substantial and long-term impact on their earnings. Those graduating during a period of favorable economic conditions enter the workforce with higher salaries, and these effects persist for a surprisingly long time.

To provide a stark illustration, Oyer compares two sets of Stanford Business School classes: the classes of 1986 and 1987 (who graduated prior to the market crash of 1987), and the classes of 1988 and 1989 (who graduated post-crash). In the twenty years since graduation, the pre-crash classes have earned an estimated $85-250 million more than the post-crash classes, which works out to several hundred thousand dollars per student. Even a decade after entering the workforce, the class of 1988 was still making substantially less than students who graduated just a year ahead of them from Stanford.

Another recent study found similar effects for undergraduates as well. Philip Oreopoulos, Till Von Wachter, and Andrew Heisz found that it can take a full decade for the wages of those who graduated during a recession to catchup to those of their peers who graduated during better economic conditions.

The bottom line? cross your fingers, prospective MBAs! Market conditions at graduation have a significant impact on lifetime earnings, but there’s little anyone can do to effect or time the macroeconomic environment. But if you’re serious about managing your future, Oyer does have one recommendation: risk averse students should short a broad stock market index when they begin their studies, as a hedge against a market downturn hurting future wages. If the market heads south, you may be left with less lucrative job offers, but atleast you’ll have profited from your market hedge.

Read more:

• Hello, Young Workers: One Way to Reach the Top Is to Start There [nytimes.com registration required]
• The Making of an Investment Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income, by Paul Oyer
• The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates, by Philip Oreopoulos, Till Von Wachter, and Andrew Heisz