Ivy Leaguers' Big Edge: Starting Pay

Parents Forum
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<p>The following are some exerpt from an article in today's Wall Street Journal that you might find interesting:</p>

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Ivy Leaguers' Big Edge: Starting Pay
By SARAH E. NEEDLEMAN

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Where people go to college can make a big difference in starting pay, and that difference is largely sustained into midcareer, according to a large study of global compensation.</p>

<p>In the yearlong effort, PayScale Inc., an online provider of global compensation data, surveyed 1.2 million bachelor's degree graduates with a minimum of 10 years of work experience (with a median of 15.5 years). The subjects hailed from more than 300 U.S. schools ranging from state institutions to the Ivy League, and their incomes show that the subject you major in can have little to do with your long-term earning power. PayScale excluded survey respondents who reported having advanced degrees, including M.B.A.s, M.D.s and J.D.s.</p>

<p>One reason why Ivy Leaguers outpace their peers may be that they tend to choose roles where they're either managing or providing advice, says David Wise, a senior consultant at Hay Group Inc., a global management-consulting firm based in Philadelphia. By contrast, state-school graduates gravitate toward individual contributor and support roles. "Ivy Leaguers probably position themselves better for job opportunities that provide them with significant upside," says Mr. Wise , adding that this is the first survey he's seen that correlates school choice to a point later in a career.</p>

<p>Also, more Ivy League graduates go into finance roles than graduates of other schools, and employers pay a premium for them, says Peter Cappelli, a professor of management and director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. "Dartmouth kids get paid more for the same job than kids from Rutgers are [doing]," he says.

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Mr. Wise called the data thought-provoking. "These results, to some extent, confirm suspicions that many people have about the importance of a person's college choice in giving them better pay opportunities down the line," says Mr. Wise. "What we still don't know is whether or not it's the training or education the school provides that drives these pay differences, or if the people from those schools are just wired to self-select into jobs that are likely to be paid more."

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Contrary to what many parents tell their children majoring in subjects like political science or philosophy, these degrees won't necessarily leave you in the poorhouse. It can depend on what career path you choose to pursue with that degree. History-majors-turned-business-consultants earn a median total compensation of $104,000, similar to their counterparts who pursued a business major like economics -- whose grads earn about $98,000 overall at midcareer, the PayScale study shows.</p>

<p>English majors in all career paths who graduate from Harvard University earn a median starting salary of $44,500, compared with $35,000 for those with English degrees from Ohio State University -- a 27% difference. And that disparity widens even more after 10 years. By then, English majors from Harvard reported earning $103,000 in median pay, 111% more than their counterparts from Ohio State.</p>

<p>"With a liberal art's degree, it's what you make of it," says Al Lee, director of qualitative analysis at PayScale. "If you're motivated by income, then there are certainly careers in psychology that pay as well as careers out of engineering."

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<p>There are a lot of reasons why kids graduating from HPY and co get higher starting salaries. Not the least of which is the fact that those kids are rather self selected to be the best of the best. However, the fact is also that many of those kids are well connected to the high paying job scene and internships all of which can affect starting pay. I don't think the issue is what the average kids at these schools will be getting as a starting jobs so much as what the differential would be had a similarly resumed student at a different school would get. When that is done on an apple to apples comparison, the results have been quite different. I don't find it surprising at all that the average kid at the ivies have better starting jobs than those at state Us. They are "better" kids in terms of accomplishment, academic prowess, motivation just to get into the ivies. No surprise there at all.</p>

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<p>cpt of the house - you are right. How surprised can we be when the cognitive elite does well in terms of income. And the cognitive elite appear at other schools. By way of pure anecdote, anyone think a 3.8 GPA engineer at a schools like Georgia Tech won't have plenty of good paying opportunities? They surely will.</p>

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Question of the Day. Even though graduates from all types of schools increase their earnings throughout their careers, their incomes grow at almost the same rate, according to the survey. For instance, the median starting salary for Ivy Leaguers is 32% higher than that of liberal-arts college graduates -- and at 10 or more years into graduates' working lives, the spread is 34%, according to the survey.

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<p>I found the article to be rather confusing. They talk about "liberal arts colleges" (see above) but their actual negative comparisons are with state universities.</p>

<p>Except in this excerpt, where their claim of ivy superiority fails.</p>

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Of all Ivy League graduates surveyed, those from Columbia earn the lowest midcareer median salary -- $107,000. Meanwhile, the highest-paid liberal-arts-school graduates, from Bucknell University, earn slightly more -- $110,000.

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<p>I hate articles like this that make such sweeping take-away statements that are very vague, without actually backing up their assertions with verifiable information. They quote the study, but only provide the smallest sampling that seems to support their conclusion. Except it doesn't.
Is the actual survey available anywhere? </p>

<p>And we wonder why our kids are "ivy obsessed." Thanks, WSJ. :rolleyes:</p>

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<p>Meaningless to compare salaries without knowing cost of living.</p>

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<p>One of the disappointments that I have seen repeatedly from parents who are sacrificing big $$s to send their kids to very expensive private prep schools is the realization that this huge financial move may not result in upping their kids' chances of getting into a top school. It might, in fact, lower them. A reason why so many of these kids at these schools get into the name schools is because of connections, powerful hooks like development (meaning $$s contributions), legacy, and friends in high places. Without those connections, which does not come with admission to the school, your kid is not going to have that same in as many of his classmates. </p>

<p>I bring this up because these days getting a lot of those top jobs means internships which often means connections too. And there are plenty there in the top colleges. Though I know many highly motivated kids without connections with great jobs after college, I also see top ivy grads doing min wage work, finding themselves and in trouble after graduation. It is not a sure thing. Of course by identifying oneself as one of the elite, there will be opportunities that a school in the outliers will not have. Of course it is desirable to go to HPY or the ivies. That is why people want to go there. But there are many disappointed and disillusioned folk out there when the ivy did not bear gold for their kids. In some cases, it covered some mold.</p>

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<p>Correct for family income when they first entered school and much of the differential likely fades away.</p>

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<p>I agree, mini. That probably explains the Columbia vs Bucknell "mystery."</p>

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<p>I've always felt with an Ivy degree an opportunity is yours to lose vs. grads of less prestigious schools who continually have to prove themselves. Of course, this isn't universal - if you're in Spokane, Washington or JAckson, Mississippi its not going to matter. But the best jobs are in the biggest cities, and Ivy grads tend to overperform greatly in these places.</p>

<p>I've seen my equally smart friends who went my local state schools, on average, do worse in terms of career trajectory compared to my friends who went to Ivies and other top schools. And the differences are exponential.</p>

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<p>slipper- this article doesn't seem to allow for "other top schools." It makes the case for ivies only. That's one of the problems I have with it.
I think it's safe to say that kids who go to "top schools" may have better career opportunities these days whether it is due to their own ambition, their background, or just the door opening name. But, ivies specifically? That doesn't ring true to me, at all.</p>

<p>And the idea that ivy grads don't have to prove themselves? Some would say they have a harder time because of the expectations that come with the ivy label.</p>

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<p>From the online info posted with the article-</p>

<p>[url=<a href="http://online.wsj.com/public/resources/documents/info-Salaries_for_Colleges_by_Type-sort.html%5DWSJ.com%5B/url"&gt;http://online.wsj.com/public/resources/documents/info-Salaries_for_Colleges_by_Type-sort.html]WSJ.com[/url&lt;/a&gt;]&lt;/p>

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<p>First, any such study as this that doesn't compare students from one school type versus the other school type with matching or similar SAT and GPA numbers is useless as you have a self-selected different "average" if you don't do that and so should expect the top schools to have graduates <em>as a whole</em> with higher incomes based on that. The studies I've seen that match the stats going in note that the stats 10 years out are remarkable similar rather than that the top school prepared the person in such a way that gave them an edge or even that helped them to network in such a way that gave them an edge.</p>

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<p>And this could also be due to people who go to Harvard having, in general, more of a "lust" for prestige and money than those who go to Ohio State (I have a step-mother who went to Ohio State and became a social worker - I can assure you that money was not a big interest for her...caring for people was, including poor people, where the pay isn't so high). Ambition plays a much larger factor, I suspect in income than does the school attended. If a person is happy not having a lot of money, the urge to take a higher stress job (the kind that tend to happen more at the higher income levels) isn't going to be so strong as for someone who feels, "If I only had a bigger house/more prestigious car/yacht/whatever, then I'd be happy" and so while many people see ambition in a positive light, as the offspring of a parent with high ambition and a parent with low ambition (guess which one earned more and guess which one died at 52 while the other one is still alive at over 30 years a more advanced age?), I actually am not so sold on ambition being all so great a characteristic (though I am also not advocating everyone choose the lazy bum lifestyle I have - I am glad the world has a mix or nothing would get done in the world and I wouldn't be nearly so happy).</p>

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<p>Several full charts -- including salaries by major -- and article are online "free" (to non-subscribers) at WSJ.com/Careers</p>

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<p>Excellent point! People often work and permanently reside in the area where they went to college. Harvard is located in a <em>far</em> pricer place to live than is Ohio State. Take the price of living into account, and the Ohio State people might have larger homes, more vacations to more expensive locales, etc. despite having the lower annual income.</p>

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<p>Re: Columbia vs. Bucknell...
The survey is of people with terminal Bachelors degrees only. I'm guessing that a much higher percentage of Columbia graduates go on for PhDs, MBAs, Law and Medical Degrees, etc., than Bucknell grads. The survey likely compresses the differences between all graduates of each school, depending upon the percentage of grads at each school pursuing further education.
I wouldn't say that the Columbia grads who don't go on for more education are necessarily those at the bottom of Columbia's class (there are plenty of people who find lots worthwhile to do without adding degrees), but the thought does occur...</p>

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<p>Is it just me or are they listing some schools twice - adding "party" for some of the schools? Wow. Did this study also compare "party" schools against other types of schools, I am guessing? </p>

<p>And how is it that Randolph-Macon College is listed as <em>both</em> a party school and a LA school? I've never been there, but didn't consider it a party school (and my having never been there and being a party girl leads me to believe that had to be an error!).</p>

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<p>It crossed my mind, as well, in thinking, "Well, a Harvard bachelor's will get your farther than a state U bachelor's right out of college in general, so plenty of smart Harvard grads likely go right into the work force, get paid well, so see no need to go back to school, while the people at the state U's who aren't being paid quite as well might not be from the top of their graduating class and not think they could even get into graduate school (which few Harvard grads would likely think) and there are just a lot of "lower level" graduates pulling down the figures, as I am thinking the percentage of people who never get a degree past the bachelor's is far higher at the state U's than the Ivy colleges. It's just not matching "quality of student going in" in seeing how things turned out down the road, and that is truly the important thing to do, seems to me.</p>

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<p>danas, im not sure the issue is as much the percentage of students who pursued advanced degrees as what those who didnt are doing with their lives. in the case of bucknell (and many other schools that also performed very well), a very significant percentage of graduates pursued the most lucrative bachalors-only career fields: computer science and engineering.</p>

<p>as a result, mit, caltech, harvey mudd, carnegie mellon, cooper union, rpi and polytechnic all made the top 20. brown did not.</p>

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<p>And how many o those firms that really pay well recruit at HYP? That's the biggest advantage.</p>

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<p>I think you are right, ericatbucknell.</p>