and entrance to top MBA and law schools says a study done by an economic & law professor at Vanderbilt.
http://www.nytimes.com/2014/08/03/education/edlife/why-you-cant-catch-up.html?_r=2
study (it’s free to download): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473238
To start with the study defines “top graduate programs” in a unique way. They divide schools into 4 tiers which are essentially tier 1 = somewhat selective private research college, tier 2 = somewhat selective private LAC, and tier 3 = somewhat selective state school. For example, Boston University, Howard, and Miami are tier 1 schools, while Berkeley, UVA, and University of Michigan are Tier 3. They then assume that “tier 1” colleges are the “top graduate programs.” So moving from Berkeley undergrad to University of Miami for grad would be considered an advancement from a less competitive undergrad to a top grad program; and going from Miami undergrad to Berkley for grad would be considered moving out of a top undergrad program to a less selective/desirable grad program.
At first glance, among persons graduating from a “tier 1” (private college) graduate/professional program, those who attended a “tier 1” undergrad have higher earnings than other tiers. However, when you control for things like degree obtained (MD, JD, PhD, …); field of work; company size; race; and parents’ SES then the undergrad earnings relationships becomes negligible. With full controls, the study found that the regression coefficients for earnings after attending a “Tier 1” graduate/professional degree are below:
Attending a “Tier 1” college for undergrad: 0.036 (0.024)
Attending a “Tier 2” college for undergrad: -0.028 (0.036)
Attending a “Tier 3” college for undergrad: 0.048 (0.028)
This lack of a trend suggests that the undergrad college has little influence for earnings of this group, essentially the opposite of the text quote in the first post. Among MBAs, there does appear to be a statistically significant trend, but in the opposite direction. That is MBAs who moved from lower tier undergrad to higher tier MBA have the highest earnings after controls. I suspect there is a missing factor involved in this correlation, such as those who start in public college and move to a private college for their MBA are more likely to have a high paying job, and having a high paying job prior to MBA is correlated with a higher salary post MBA.
Similarly, the study found that persons who attend a “tier 1” college for undegrad were more likely to attend grad school, particularly tier 1s (persons who attend private college for undergrad are more likely to attend private college for grad) but I didn’t see anything that compared comparable students. For example, the average Harvard grad is more likely to attend grad school than the average directional state grad. That’s not a surprise. The more interesting question is what about the student who was stellar enough to be accepted to Harvard, but chose a full ride at a directional state instead. Is he also less likely to attend grad school than a typical Harvard grad?
Thank you for that analysis @Data10
The author’s categorization of tiers is indeed strange. I didn’t read the paper closely. Did the author explain the methodology of this categorization? It didn’t seem to be based on selectivity only did it? In real life, people generally have a better sense about “tiers”. Few people would choose a school with a significant lesser reputation for no reason anyway, with or without substantial evidence that a lower tier school would be equally effective for graduate school admission and in job market. Financial reasons often times drive the decision of picking a college one or two tiers down than one would otherwise be attending. Occasionally, there are exceptions. I know a family that sent their kid to private schools throughout k-12 but upon graduation from HS chose University of Delaware turning down CMU for an engineering degree. The parents said money was not the concern and that the kid just liked the honors college there better. I don’t know how common this is but it got me scratch my head.
Long term educational credentials become less important. The most important things in terms of getting a job is your employment history and recommendations.
The author (Joni Hersch) is not making normative judgements about the quality of individual graduate or undergraduate programs. She is trying to assess the effects of undergraduate school prestige on future earnings. A major point of this study is to control for the confounding selection effects of admitting only the most talented students to the most prestigious undergraduate schools. A key passage is this one:
“Although Dale and Krueger’s research (2002, 2014) is widely cited as evidence that
earnings are not affected by selectivity of undergraduate college once individual characteristics
are accounted for, their research is based on data from students at a limited number of highly
selective colleges and universities. This means that those students who were admitted to more
selective schools than they ultimately entered were still attendees (and usually graduates) of
highly selective institutions, and does not mean that the same individual would have been
equally successful had they instead attended a nonselective college.”
Note the word “nonselective” (which is not necessarily the same as “less selective”).
She isn’t drawing specific conclusions about moving from Berkeley to Miami or vice-versa.
She is providing evidence that choosing to attend a non-prestigious college over a very prestigious college will hurt your earnings potential, even if you later attend a prestigious graduate school.
(“even among those with graduate degrees from elite institutions, the earnings gap between those with bachelor’s degrees from tier 4 institutions and between those with bachelor’s degree from institutions in tiers 1 – 3 remains large.” Emphasis added.)
So if you graduate from East Podunk State Teachers College, you’ll tend to earn less than if you graduate from Harvard College (even if you later get a graduate degree from Harvard University).
The tier 4 (all those not listed in tier 1 to 3) colleges include schools like Harvey Mudd College, UC Santa Cruz, and probably others that are more selective than some of those listed in tier 1 to 3. So the classification is suspect, which makes the conclusions suspect.
Sounds like junk to me when I hear U Miami supposedly outranking UC Berkeley- one of the premier grad schools for many things. Author’s bias in private over public institutions shows not knowing the rankings at all. And so forth. Yet another wacky attempt at something. btw- who cares if you earn a lot less than someone whose quality of life is horrible in your view- eg earnings compared to cost of living or needing to live in a place where you have a lesser quality of life. Study shows how you can waste time with statistics.
The author states the opposite when discussing the numbers I quoted above that show no trend of tiers 1-3 compared to tier 4, when including controls for “ability” and family SES (among other things including field of degree). Also note that tier 1 is implied to be “the most selective institutions” in the quote, so the paper is assuming Miami is one of the most selective institutions, and Berkeley is not.
Good discussion so far. Thanks.