Going to an Elite College Won't Get You More Money; Being Good Enough to Get Accepted at One Will

Via SissyWillis's Twitter feed, Instapundit, and Newsalert (whew, tired) comes a NY Times story about whether it's worth the extra dough to go to an expensive, elite school. Do grads from such joints make more money post-graduation than if they'd gone to less-selective institutions?

The short version: No. The slightly longer version goes something like this: It sure looks that way.

To wit:

A paper by economists from the RAND Corporation and Brigham Young and Cornell Universities — found that "strong evidence emerges of a significant economic return to attending an elite private institution, and some evidence suggests this premium has increased over time."

Grouping colleges by the same tiers of selectivity used in a popular college guidebook, Barron's, the researchers found that alumni of the most selective colleges earned, on average, 40 percent more a year than those who graduated from the least selective public universities, as calculated 10 years after they graduated from high school….

But that's not the end of the story. When you compare students of equal ability (as defined by where they're at when they graduate high school), a different pattern emerges.

One flaw in such research has always been that it can be hard to disentangle the impact of the institution from the inherent abilities and personal qualities of the individual graduate. In other words, if someone had been accepted at an elite college, but chose to go to a more pedestrian one, would his earnings over the long term be the same?

In 1999, economists from Princeton and the Andrew W. Mellon Foundation looked at some of the same data Professor Eide and his colleagues had used, but crunched them in a different way: they compared students at more selective colleges to others of "seemingly comparable ability," based on their SAT scores and class rank, who had attended less selective schools, either by choice or because a top college rejected them.

The earnings of graduates in the two groups were about the same — perhaps shifting the ledger in favor of the less expensive, less prestigious route. 

Jesus Christ, how much disposable income and status anxiety did the Times cram into that perhaps?

The authors of the second study, Stacy Berg Dale and Alan Krueger, did note that kids from disadvanated families seemed to do better by going to elite schools rather than less-selective ones (they didn't speculate on why). Whole Times story here.

The data that both studies use is more than a decade old and so comes with caveats; measuring success in terms of money is always problematic; etc.

As a big state school grad with a decade-plus under my belt of hiring folks from every possible background (including no college sheepskin at all!), a former student rep on various grad program admissions committees, and, most important, the father of a high school junior who seems drawn to the very most expensive schools around, I am very inclined to believe that individuals of comparable capability are going to end up at the same general place regardless of their alma mater.

In some fields, especially those that rely on semi-rigid grad school pecking orders as a filter, there's no question that it's probably always better to pick Princeton over Rutgers (two schools mentioned in the Times piece and the latter being my undergrad haunt). That's especially true at the grad school level. It's much rarer for a Rutgers Ph.D. to teach at Princeton than the reverse. But in most cases at the undergrad level, if money is an issue (and lord knows it always is), how "smart" you are at the all-important juncture of your life when you're 17 (I'm being ironic) is a better guide to your future than what school you, your parents, and taxpayers via many different subsidies end up paying for.

And regardless of what relative advantage your school may grant you immediately upon graduation, after a few years, if not a few months, it's all about what you're bringing to the workplace, not what sticker is gumming up your car's rear window. Which is a good thing all around.

Please feel free to forward this to my son.

And now, for your viewing pleasure, "The Case Against College Entitlements" released July 14, 2009: