Do Elite Colleges Lead to Higher Salaries?

http://www.wsj.com/articles/do-elite-colleges-lead-to-higher-salaries-only-for-some-professions-1454295674?mod=e2fb

For those who want the quick version:

Seems like this paper by the same authors is relevant, or what the WSJ piece is based on:
http://onlinelibrary.wiley.com/doi/10.1111/coep.12115/pdf
This paper also lists examples of the colleges in the selectivity tiers that they defined.

Some odd choices for their select school bucket. Indiana (my alma mater) is a good state school but I’m not sure it belongs here…Michigan would have likely been a better choice. SUNY Albany? Colorado? Again, think there probably were better public universities to add to the select population.

Admission selectivity is used to tier the schools in the study. At least these authors say they don’t consider selectivity the same as quality and that they are studying selectivity.

We continue to say all that marketing material isn’t being used to drive selectivity numbers because it is such a small portion of USNWR. It may be a small portion of that survey but selectivity is routinely used to label schools in just about everything we see studied.

You really think UMich data isn’t in the top category? The schools listed are examples. It seems like they were using what most people consider flagships.

I read the WSJ article this morning. I made a mental prediction as to what the conclusions would be and I was right. My D is a ChemE major at Purdue University, typically considered a top university for engineering. She has a coop position and there are students from U of Cincinnati, U of Louisville, U of Missouri and even U of Southern Indiana who coop with her. They all make the same amount of money and if hired after graduation will be offered the same salary.

Engineering and other stem students are often the top students that a university accepts except if they are a highly selective school. Even a 3rd or 4th tier school’s engineering program will have students whose average SAT and ACT scores are several points higher than average for the school. The English major from Harvard is generally going to be recognized as more capable than the English major from the regional state U or LAC. The engineering student not as much.

Back in the dark ages, when I started working as a research chemist at a pharmaceutical company, we were all paid the same starting salary - the dude who graduated from Harvard was paid the same as the dude who graduated from Wayne State…

…EXCEPT that the men were paid more than the women. I told you it was the dark ages…

The salaries depend a lot on locality. No employer in Ohio will pay the same for the same position as in NYC, but if you compare the cost of living, you are still will be ahead financially if you live in Ohio. It will not matter in Ohio if you graduated from Harvard. It may matter in NYC, I am not familiar though with the job search in NYC.
However, the salaries in some positions may not be different at different localities and then you basically will have a hard time financially in NYC One example is relatively low paid medical residents. Again, nobody will care where you went to college, the match residency programs may or may not care about your medical school. However, the graduate of Harvard medical school will not get higher slary than graduate from the state public medical school, they will get the same in the same residency program.

The economist college rankings address this. The largest problem with their (and other) rankings is that they usually look at earnings around a decade after graduation (schools tend to “lose” track of their grads after that), and often times the students of the more elite schools haven’t hit their earnings potential yet. For example, many of the doctors from a school aren’t in the math yet…but in 10 years the amounts will have significantly adjusted.

If elite school grads have not hit their earnings potential why would we assume non-elite school grads have?

In a sweeping generalization: Because elite school grads continue their educations, whilst state school grads go to work. Yale is at the bottom of the Economist list, and I doubt it relates to limitations of ability or education.

I only skimmed this, but am I understanding correctly that all of the data presented is based the earnings of a cohort group that is now in their mid-forties, based on their earnings reported between 1993 and 2003? I am not saying the conclusions have no relevance or value today, but certainly the world has changed a bit in that gap in time.

@LOUKYDAD - I think you’re absolutely on point.

How successful people in the 40’s and 50’s “made it” has no bearing on making college decisions today. How many people worked their way through school by living at home and going to the state U? That option is rarely available today, and has changed how these results will look in another 20-30 years.

The strongest correlation to future earnings is graduate school, and there is a lot of research that shows selectivity of undergrad school is a big factor. Rarely do students attend selective graduate schools from less selective undergrad institutions. (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473238).

Here’s a Vanderbilt article 2 years ago that argues the value of a selective undergrad degree.

http://news.vanderbilt.edu/2014/11/regardless-of-an-elite-graduate-school-degree-undergraduate-prestige-greatly-impacts-salary/

One explanation for the non-gap in STEM fields: STEM jobs tend to hold titles like “programmer,” or “engineer,” etc. in more rigidly classified in pay grades. On the other hand, the humanities type jobs tend to hold titles like “specialist,” “manager/director/VP/SVP” which have more fluid pay grades.

I’m willing to bet that the disparity between gender and race is likewise narrow or non-existent in STEM jobs because those types of jobs have well-publicized pay bands to their internal teams.

In humanities jobs, you get what you can negotiate. Unfortunately, you have to deal with pay/promotion politics, and live with the fact that someone is likely being paid more doing exactly the same thing.

So what happens when half of the STEM jobs in the US go to India, or Bulgaria, or someplace else?

If you used to hire 10 grads a year in the US, and now you’re going to hire 2 in the US and 8 overseas…will the State U grads fair as well as highly selective school grads?

All of the noise around STEM presumes a need based on historical locations and productivity. Ignoring the impact of globalization and automation is dangerous.

Looking at the linked paper shows that 164 schools were determined to be in the top tier (fn 7 on page 39). We aren’t talking about HYP here. This is like the top 100 of USNWR plus the top LACs and regionals.

That paper has poor validity, due to how the author defines the tiers of schools:
Tier 1 = 40 private research universities
Tier 2 = 100? private liberal arts colleges
Tier 3 = 60? public research universities
Tier 4 = all others

Someone explain how Harvey Mudd (not listed in any of Tier 1-3, so must be in Tier 4) is less selective or prestigious than schools like Syracuse (Tier 1), Hampden - Sydney (Tier 2), Sweet Briar (Tier 2), New Mexico State (Tier 3), etc…

I thought the list of schools was just to give examples of what fit in that category.

This study, as so many, does not adequately analyze whether the salaries are correlated to, or caused by attending these schools. i* Elite schools are sorting mechanisms, skimming high-performing students from the pool. Would those students have had less success at less elite schools? The research of Krueger and Dale, if imperfect, at least tried to measure this.