<p>The 2011 Hershbein paper linked by jym626 in post #393 ^^^ is interesting and bears directly on the discussion on this thread. </p>
<p>Hershbein concludes that the earnings premium that comes from attending a selective college is due mostly to “ability signaling,” i.e., that admission to a selective college simply operates as a handy screen for employers who can be pretty confident if they hire someone from Harvard or Amherst they’re getting someone of high ability–and there’s less variability within that pool than at “less selective” schools, which in his sample are Central Michigan, Alabama A&M, Florida Atlantic, and Appalachian State. His main evidence for this is that there’s almost no earnings premium for a high undergrad GPA at his Tier III (most selective, in his sample Harvard and Amherst) and Tier II (highly selective, in his sample Michigan, UC Berkeley, and Emory) schools; on average, kids in the bottom of the class at these schools will earn about as much as kids at the top of the class. At the “less selective” schools, however, there’s a large earnings premium for a high GPA, which is consistent with employers needing to use some signal other than admission to the school to signal the applicant’s ability; so they hire the kids from Appalachian State with high GPAs.</p>
<p>He also argues this result is broadly inconsistent with the “human capital” model, which attempts to explain the earnings differential between schools on the basis of, for lack of a better term, superior educational outcomes at the most selective schools due to the availability of better and more abundant resources. He says if that were the case, you’d expect a higher earnings premium for a high GPA at a highly selective school, because presumably the most capable students would get the most out of the superior resources at those schools and come out better prepared than their less educationally successful classmates, and employers would notice that and pay a premium for the top GPAs. But the data say there’s little or no earnings premium, on average, for a high GPA at a highly selective school, which means employers are essentially treating it as irrelevant. A Harvard grad is a Harvard grad, apparently, whether her undergrad GPA is 2.5 or 4.0. He finds essentially that same result at Michigan, UC Berkeley, and Emory, his next-most-selective group. It’s at the “less selective” schools–Appalachian State, Florida Atlantic, Central Michigan, Alabama A&M–that GPA matters most to employers.</p>
<p>A further implication is that the medium-ability kid who manages to get into a selective college will be the one who benefits most from going to that college—again, not because of superior educational outcomes, but because employers will be using admission to the selective college as the primary signal of ability, and won’t pay as much (if any) attention to that student’s mediocre undergrad GPA. If that same kid went to a less selective college, undergrad GPA would matter more. </p>
<p>This is actually broadly consistent with the points annasdad has been making here. I certainly wouldn’t take this paper as the last word on the subject. There’s a lot of technical stuff in it I don’t understand, and even if his methodology is impeccable, his ultimate conclusions rest on a lot of interpretation and extrapolation from the empirical results that others might quibble with. But it’s a pretty interesting contribution to the debate.</p>