Gifted article from the WSJ https://www.wsj.com/lifestyle/careers/top-colleges-high-paying-careers-finance-tech-consulting-d1c22601?st=x4q8nzssc91yqka&reflink=desktopwebshare_permalink
Premise of article based on research by the Burning Glass Institute, “If the chosen career and the number of years in the field are the same, what effect does the undergraduate school somebody went to have on their salary?”
Salary premiums seem to be significantly higher for private schools over public. It’d be interesting to see a more extensive list of schools. I wonder if the lower ranked private colleges in those categories (ie, #20-40) still have a higher premium than the highest ranked public institutions. I also wonder if the discrepancy would widen even further over time.
The article supports that the big name schools (mostly Ivys) still are the brass ring for these fields.
Is this a non paywall version?
If graduates from 2 colleges average different mid career salaries, that does not mean that the name of the undergraduate school is the primary reason for reason for the different mid career salaries.
For example, the analysis finds that Yale tech grads average substantially higher salaries than both MIT tech grads and Cornell tech grads. Does that mean that tech employers are more impressed by the Yale name than the MIT/Cornell name and are willing to pay a higher premium for that Yale name, and continue to do so for decades after the student graduates?
Or it might it more relate to things like a different major distribution (MIT tech has higher relative % engineering and lower relative % CS) and selectivity (Yale is more academically selective than Cornell. Academic selectivity is correlated with various aspects of career success)?
Geography. The more grads who work in NY, London, HK, Silicon Valley (and other high priced locales) the higher a college’s salary premium is going to be.
I’d suggest that the difference is probably career path itself. MIT grads might be self selecting into careers that aren’t quite as lucrative. For example, working for a government entity like NASA may not pay as well as going to work for a FAANG-type company. Yale grads might be specifically choosing jobs that pay better.
Agree there is the usual question of causation vs correlation. Some of this may also relate to the subsets within each sector that graduates of each college gravitate to which may be disproportionate relative to other colleges. Let’s use MIT which is number 1 for Finance, but with only a relatively low percent of grads. It’s likely that a relatively high percent of MIT grads in finance get very high paying jobs with quant type funds vs run of the mill finance jobs. The opposite is true for MIT in terms of the Tech sector where it falls to 11 and where a larger percent of grads seek jobs, so it is likely the types of jobs are more varied in type and in compensation.
It was a bit surprising that Claremont out performed Williams and Amherst in Finance, which have a reputation as being “Wall Street” feeders.
It’s largely a difference in distribution of “tech”. The analysis listed in the OP found MIT CS earns more than Yale CS on average, and MIT engineers earn more than Yale engineers on average; yet Yale tech earns more than MIT tech on average. This occurs because tech at Yale has a far larger portion of CS majors, and CS majors tend to earn far more early career earnings than engineering majors on average (prior to adjusting to cost of living)
Yale Tech Majors – 64% CS / 36% engineering
MIT Tech Majors – 47% CS / 53% engineering
Yale Average First Job Earnings, as listed in 2023 student survey
MIT Average First Job Earnings, as listed in 2023 student survey
Yes, you can find correlations between salary and all kinds of factors. For example, I expect you’d find a correlation between salary and height, salary and eye color, salary and which items your parents bought at the grocery store, etc. Nobody would assume that any of the above determines your salary. Yet it seems fairly common to assume that college name determines salary, with no influence from the individual student.
Such analyses imply that if a high achieving MIT admit chooses to attend his/her local flagship to save money, he/she suddenly becomes the average student at the flagship who is far less high achieving and may have a 30% chance of failing to graduate.
The individual student and related individual student variables influences their post graduate outcome. It seems silly to ignore this. That’s not to say that college name has no influence. College name absolutely has a notable influence in finance and consulting. The degree of influence in tech is more debatable, particular for engineering. However, looking at average salary without controlling for any individual student or college selectivity variables is not going to produce meaningful results.