Elite colleges pay off

College pays off for graduates of top-ranked colleges and university, concludes a study analyzed by Gene Expression. In fact, a Harvard graduate can expect to earn $4,000 more a year at age 28 than a graduate of ninth-ranked Dartmouth and $18,000 more than 25th-ranked UCLA. The pay-off levels off for colleges ranked 75 or lower:  A lower-ranked college graduate averages $43,000 a year at age 28, while a high school graduate averages $30,000.

 So those guys just gave up ~$120k in earnings, plus paying college tuition, for the privilege of making ~$44k by age 28.

Research suggests that going to the high-ranked college — not just being smart enough to get in — makes a big difference in earnings.  So it’s safe to borrow to go to Harvard instead of U-Mass, not so safe to borrow to attend a second-tier private college.

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Comments

  1. I couldn’t find anything to suggest that this study controls for field of study. If Harvard graduates a large proportion of doctors and lawyers, and state-run colleges graduate civil engineers and teachers and journalists, what other result would one expect?

    Add to that the miscellaneous effects of family background and wealth on future earnings that aren’t directly connected to choice of college.

  2. Add to that the miscellaneous effects of family background and wealth on future earnings that aren’t directly connected to choice of college.

    …Or I should have said, “… that influence, but are not the result of, choice of college.”

  3. The study is meaningless because it uses the mean salaries, not the median. (And does not provide the standard deviation). Big investment banking firms recruit almost exclusively at a few ivies, and these traders can easily earn multimillion dollar bonuses by age 28. This fact alone means that these results are completely useless.

  4. Right. The teacher down the hall from me with the Harvard degree makes exactly the same as I do with my UMass degree.