According to a study published by National Bureau of Economic Research, the idea that graduates of elite institutions end up with higher lifelong earnings is largely a myth—with some notable exceptions.
Long term, a degree from an elite school like Princeton University or Harvard University won't earn a student any more money than schools with less prestigious reputations, the study shows.
To draw this conclusion, researchers Stacy Dale and Alan Krueger analyzed two groups of students who attended college in the 1970s and the early 1990s. Dale and Krueger looked closely at data from College and Beyond and the Social Security Administration and found the following:
- Graduates from "super-selective" schools earn the same amount as students with similar SAT scores who were rejected by these schools; and
- The same holds true for students with similar high school GPAs—elite schools do not affect lifelong earnings.
But Dale and Krueger did find a crucial exception in their research.
Attending an elite school does, in fact, make a difference in lifelong earnings for students who:
- Are black;
- Are Hispanic; or
- Have parents who attended school for an average of less than 16 years.
For these groups of students alone, the difference between attending an elite college and attending a less prestigious institution yields a "statistically significant" difference in life-long earnings, according to the researchers.
Elite schools don't necessarily offer better student experiences
But Derek Thompson points out in The Atlantic that these groups still represent a small percentage of students at elite schools. According to a study published earlier this year by the Equality of Opportunity Project, there are 38 colleges that enroll more students from the top 1% of the income scale than the entire bottom 60%.
Considering this data alongside Dale and Krueger's research, Thompson points out the reality of the situation: "Elite colleges are most valuable for the students they are least likely to admit—and least valuable for the students they are most likely to admit."
Thompson argues that elite schools could do a better job recruiting high-achieving first-generation and low-income students, and perhaps focus less on enrolling legacy students. Currently, Thompson says "a legacy student is about three times more likely to be accepted to a highly selective college" than a student with similar test scores and grades.
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A few elite schools have already taken steps to diversify their student populations, earning them spots on the New York Times' list of best colleges for low-income students. But Thompson argues there is plenty more to be done—and offering these students transparent information on cost and culture is a good place to start (Thompson, The Atlantic, 4/1).
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