Elite Private College Grads Earn More Money

Print Friendly

Here’s what the New York Times had to say about whether or not you’ll make money by going to an elite private institutions. Most of the studies say … definitely yes. If you correct for the talent of the student, comparable students in cheaper schools did about as well, but low income students (and perhaps affirmative action preferential admits?) do make more even accounting for ability. What this study does NOT look at is the fact that unless you make over $250,000, the most elite schools have the most financial aid, so it’ misleading to look at “sticker” prices. A couple of elite private schools my kids are looked at offered a price comparable to the big state school after financial aid and loans were taken into account. Now the trick is to be either smart or distinctive enough to GET INTO one of these selective colleges. At the very top, there is NO test score high enough to get you in. Every little or big thing can increase your chances, but with some colleges like Harvard admitting fewer than 10%, make sure you apply to at least two schools that you actually do have a good (better than 50%) chance of getting into.

Is Going to an Elite College Worth the Cost? By JACQUES STEINBERG
Published: December 17, 2010

Among the most cited research on the subject — 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.

Those same researchers found in a separate paper that “attendance at an elite private college significantly increases the probability of attending graduate school, and more specifically graduate school at a major research university.”

Eric R. Eide, one of the authors of that paper on the earnings of blue-chip college graduates, said he had seen no evidence that would persuade him to revise, in 2010, the conclusion he reached in 1998.

“Education is a long-run investment,” said Professor Eide, chairman of the economics department at Brigham Young, “It may be more painful to finance right now. People may be more hesitant to go into debt because of the recession. In my opinion, they should be looking over the long run of their child’s life.” …. He added, “I don’t think the costs of college are going up faster than the returns on graduating from an elite private college.”

… earnings of studnets [matched for ability] was about the same but …..
(The one exception was that children from “disadvantaged family backgrounds” appeared to earn more over time if they attended more selective colleges. The authors, Stacy Berg Dale and Alan B. Krueger, do not speculate why, but conclude, “These students appear to benefit most from attending a more elite college.”)

About the Author

MIT electrical engineering computer science graduate has written conservative columns on politics, race / culture, science and education since the 70s in MIT The Tech and various publications in including New Republic and National Review.