1) Going to a top college
2) Being smart enough to get into a top college
Here’s a strong case for #2. (Hat tip: Eduwonkette)
Needless to say, we’re not surprised by the answer. Selection bias is a cruel mistress.
What’s more important?
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You went to an elite college, right? Do you really take seriously the claim that the average person graduating from one *today*, not in 1976 when America was a very different place, will be making the equivalent of $95,000/year when they have 19 years of experience? Basically anyone who puts some effort into it at such a school can have a job paying that much right out of college today, while at Penn State they will be VERY lucky to make half that without an engineering degree, and somewhat lucky to do so with an engineering degree. Penn State engineering degrees are, by the way, MUCH harder to earn than Penn English or Psychology degrees, and for the high IQ much harder to earn than Penn finance or economics degrees.
I’m not sure I undertstand your argument. I’m sure it’s a fact that graduates of elite colleges make more money than graduates of, for lack of a better term, non-elite schools. But, I find it quite plausible that the colleges are not causing those higher earnings; colleges are merely selecting those students that are most likely to have higher earnings in the future, whether because of natural intelligence or socioeconomic background.
Even though it’s not quite to the point I was trying to make, I’d be interested to see the evidence (or reasoning) that things are very different today, and that elite colleges play a different role relative to job outcomes than they did 30 years ago.
The biggest change is that finance and corporate law take a much larger slice of the total economic pie, and elite school degrees are almost a prerequisite on the career track into those careers (and into academia and high status journalism and much else, but the others don’t pay well).
Look. You know what sort of jobs kids get out of elite schools, and what the payscale for those jobs is after a few years. $92K after 19 years is just not remotely credible for elite school grads. The other numbers, $70K / year 19 years later for semi-elite school graduates and $92K / year for semi-elite school graduates smart, high SES, and conscientious enough to get into elite schools, those numbers make perfect sense. They are exactly what I would expect. I’d bet that the Penn class of 1998 makes WAY more than that with only 9 years of experience. In fact, just the people who went into finance and corporate law might easily carry the average above $92K/year by themselves.
This whole argument strikes me as pretty tangential. Elie was making a point about selection bias. It’s possible that things have changed a lot since that study, but at that time at least, people were strongly and wrongly convinced of the value of an Ivy League education.
As for the situation today:
1. I think I read somewhere that elite school grads have much higher incomes right out of college, but the difference fades to nothing over time. That seems plausible to me. No question that hedge funds give entry-level offers to Ivy Leaguers that they wouldn’t give to others … but I think people who really want to work at hedge funds find their way in eventually, and people who don’t (like me) leave.
2. I also think that grad degrees matter a lot more than undergrad degrees, and you definitely don’t need an Ivy League Bachelor’s to get an Ivy League advanced degree.
3. That said, I would guess that an elite degree is more important than it used to be, and isn’t worthless.
Speaking as someone who really really wanted in for quite a while, yes, eventually, sort of, for the VERY most socially and intellectually able and determined people there is another way in. Such people however, by the time they are let in, don’t really need to be. They are not let in until they have “made it” on their own to a degree that makes the funds and banks mostly irrelevant to them. Even then they are left years behind where they would have been if they had been able to get such jobs from the beginning and thus have a reasonable economic platform to jump off from. For such people, a few hundred thousand at age 25 is vastly more valuable (higher NPV) than a few million at age 35.
A large fraction of people who go to ivy league universities have a chance to make it into such places that they would never have if they didn’t go to the ivies, or even, in fact, if they went but didn’t apply while still in school.
Above all, these schools substitute for the sales skills which are otherwise a prerequisite for any $200K/year plus income.
You definitely don’t need an ivy bachelors to get an ivy advanced degree, but it helps a lot, partially because the courses at say Columbia or Harvard (oddly, not so much Penn) are so much more g-loaded than those at Penn State.
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