Elite colleges don’t boost most graduates’ pay

Graduating from an elite college doesn’t boost most graduates’ pay, concludes a new study by economists Stacy Dale and Alan Krueger. But there’s a big exception for black, Hispanic, low-income and first-generation college students, notes David Leonhardt in the New York Times.

Graduates of elite colleges make more money than graduates of less elite colleges, even controlling for SAT scores and grades. However, the new study added a variable: Where did students apply?

Someone who applies to Duke, Williams or Yale may be signaling that he or she is more confident and ambitious than someone with similar scores and grades who does not apply. Someone who is accepted by a highly selective school may have other skills that their scores didn’t pick up, but that the admissions officers noticed.Once the two economists added these new variables, the earnings difference disappeared. In fact, it went away merely by including the colleges that students had applied to — and not taking into account whether they were accepted. A student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.

The average SAT score at the most selective college students apply to turns out to be a better predictor of their earnings than the average SAT score at the college they attended, Krueger told Leonhardt. However, “attending a more selective school increased earnings significantly” for disadvantaged students.

Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home.

It’s not clear how the research applies to unselective colleges, Leonhardt notes. He wonders “what happens to students who try to save money by first attending community college, with plans to transfer later, even though they were admitted to a four-year college.”