New college ranking by The Economist: based on Alumni earnings ABOVE EXPECTATION

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The Economist has published its first-ever college rankings. It’s based on how much money graduates earn above expectation. Its ranking methodology attempts to separate outcomes due to the school’s influence, instead of due to the students already being rich and/or smart before entering the college.

For a school like Caltech, the logic goes: your students have scary-high SAT scores; you produce engineers; and you’re in a high cost of living city with high median salaries. So why aren’t your graduates earning more?

The ranking of 1,283 four-year American colleges
http://www.economist.com/blogs/graphicdetail/2015/10/value-university

…our statistical software produced an estimate for each college based exclusively on these factors of how much money its alumni would make. Its upper tiers are dominated by colleges that emphasise engineering (such as Worcester Polytechnic) and attract students with high SAT scores (like Stanford). The lower extreme is populated by religious and art-focused colleges, particularly those in the south and Midwest. This number represents the benchmark against which we subsequently compare each college’s alumni earnings to produce the rankings. The bar is set extremely high for universities like Caltech, which are selective, close to prosperous cities and teach mainly lucrative subjects. If their students didn’t go on to extremely high-paying careers, the college would probably be doing something gravely wrong.

…colleges like Caltech and Yale, whose graduates earn far more money than those of an average university but significantly less than their elite test results would indicate, sit at the very bottom of The Economist’s list.

…the scorecard data suffer from limitations. They only include individuals who applied for federal financial aid, restricting the sample to a highly unrepresentative subset of students that leaves out the children of most well-off parents. And they only track students’ salaries for ten years after they start college, cutting off their trajectory at an age when many eventual high earners are still in graduate school and thus excluded from the sample of incomes. A college that produces hordes of future doctors will have far lower listed earnings in the database than one that generates throngs of, say, financial advisors, even though the two groups’ incomes are likely to converge in their 30s.

…we hope that our numbers do in fact represent the economic value added by each institution, there is no guarantee that this is true. Colleges whose alumni earnings differ vastly from the model’s expectations might be benefiting or suffering from some other characteristic of their students that we neglected to include in our regression: for example, Gallaudet University, which ranks third-to-last, is a college for the deaf

The Top & Bottom 50 schools are listed in my next 2 posts:

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The columns show EXPECTED earnings for the school (as per The Economist’s algorithm) vs ACTUAL median earnings by its graduated 10 years after graduation.

** The Top 50 **

# | expected | median | over/under
1 | $55,223 | $77,600 | $22,377 | Washington and Lee Univ , VA
2 | $65,170 | $85,500 | $20,330 | Babson College , MA
3 | $60,455 | $73,700 | $13,245 | Villanova Univ , PA
4 | $74,466 | $87,200 | $12,734 | Harvard Univ , MA
5 | $62,327 | $74,900 | $12,573 | Bentley Univ , MA
6 | $29,562 | $42,000 | $12,438 | Otis College of Art and Design , CA
7 | $64,559 | $76,800 | $12,241 | Lehigh Univ , PA
8 | $31,766 | $43,400 | $11,634 | Alderson Broaddus Univ , WV
9 | $33,692 | $45,200 | $11,508 | Texas A & M International Univ , TX
10 | $37,025 | $48,100 | $11,075 | California State Univ-Bakersfield , CA
11 | $39,408 | $49,900 | $10,492 | Holy Family Univ , PA
12 | $56,477 | $66,400 | $9,923 | Univ of the Pacific , CA
13 | $39,824 | $49,700 | $9,876 | Univ of Saint Joseph , CT
14 | $59,354 | $68,800 | $9,446 | Bucknell Univ , PA
15 | $68,813 | $78,200 | $9,387 | Univ of Pennsylvania , PA
16 | $74,095 | $83,300 | $9,205 | Georgetown Univ , DC
17 | $46,901 | $55,700 | $8,799 | Drake Univ , IA
18 | $73,062 | $81,700 | $8,638 | Rensselaer Polytechnic Institute , NY
19 | $44,361 | $52,900 | $8,539 | California Lutheran Univ , CA
20 | $36,379 | $44,900 | $8,521 | California State Univ-Stanislaus , CA
21 | $45,863 | $54,300 | $8,437 | Duquesne Univ , PA
22 | $47,565 | $56,000 | $8,435 | Univ of Scranton , PA
23 | $70,532 | $78,900 | $8,368 | Rose-Hulman Institute of Technology , IN
24 | $38,944 | $47,300 | $8,356 | Rhode Island School of Design , RI
25 | $41,650 | $49,900 | $8,250 | Wilkes Univ , PA
26 | $83,416 | $91,600 | $8,184 | Massachusetts Institute of Technology , MA
27 | $43,120 | $51,300 | $8,180 | Linfield College-McMinnville Campus , OR
28 | $52,957 | $60,900 | $7,943 | Cal Polytechnic State Univ-San Luis Obispo , CA
29 | $68,893 | $76,700 | $7,807 | Duke Univ , NC
30 | $44,251 | $52,000 | $7,749 | Gwynedd Mercy Univ , PA
31 | $61,341 | $69,000 | $7,659 | Fairfield Univ , CT
32 | $53,754 | $61,400 | $7,646 | Pepperdine Univ , CA
33 | $50,858 | $58,500 | $7,642 | Davidson College , NC
34 | $38,018 | $45,600 | $7,582 | Woodbury Univ , CA
35 | $75,344 | $82,800 | $7,456 | Stevens Institute of Technology , NJ
36 | $56,346 | $63,700 | $7,354 | College of the Holy Cross , MA
37 | $35,582 | $42,900 | $7,318 | East Stroudsburg Univ of Pennsylvania , PA
38 | $30,796 | $38,100 | $7,304 | Mansfield Univ of Pennsylvania , PA
39 | $35,153 | $42,400 | $7,247 | SUNY Oneonta , NY
40 | $49,801 | $57,000 | $7,199 | George Mason Univ , VA
41 | $47,940 | $55,100 | $7,160 | Western New England Univ , MA
42 | $41,355 | $48,500 | $7,145 | Albright College , PA
43 | $35,923 | $43,000 | $7,077 | Georgetown College , KY
44 | $35,766 | $42,800 | $7,034 | Bluefield College , VA
45 | $37,791 | $44,800 | $7,009 | Texas Woman’s Univ , TX
46 | $24,399 | $31,300 | $6,901 | Blue Mountain College , MS
47 | $43,531 | $50,400 | $6,869 | Ithaca College , NY
48 | $37,136 | $44,000 | $6,864 | Univ of Vermont , VT
49 | $42,073 | $48,900 | $6,827 | Baker Univ , KS
50 | $31,206 | $38,000 | $6,794 | Sul Ross State Univ , TX

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The columns show EXPECTED earnings for the school (as per The Economist’s algorithm) vs ACTUAL median earnings by its graduated 10 years after graduation.

** The Bottom 50 **

# | expected | median | over/under
1234 | $42,265 | $36,300 | ($5,965) | Universidad Politecnica de Puerto Rico , VA
1235 | $43,768 | $37,800 | ($5,968) | Benedictine College , KS
1236 | $42,784 | $36,800 | ($5,984) | Gardner-Webb Univ , NC
1237 | $42,904 | $36,900 | ($6,004) | Lenoir-Rhyne Univ , NC
1238 | $37,759 | $31,600 | ($6,159) | Crown College , MN
1239 | $44,059 | $37,900 | ($6,159) | Beloit College , WI
1240 | $41,999 | $35,800 | ($6,199) | Becker College , MA
1241 | $42,035 | $35,800 | ($6,235) | College of Saint Mary , NE
1242 | $52,770 | $46,500 | ($6,270) | Univ of Georgia , GA
1243 | $50,806 | $44,500 | ($6,306) | Saint Peter’s Univ , NJ
1244 | $44,471 | $38,100 | ($6,371) | Nyack College , NY
1245 | $49,380 | $43,000 | ($6,380) | Whitman College , WA
1246 | $46,216 | $39,800 | ($6,416) | Montana Tech of the Univ of Montana , MT
1247 | $42,668 | $36,200 | ($6,468) | Reed College , OR
1248 | $44,258 | $37,700 | ($6,558) | Olivet Nazarene Univ , IL
1249 | $59,302 | $52,600 | ($6,702) | Pomona College , CA
1250 | $43,612 | $36,700 | ($6,912) | Lesley Univ , MA
1251 | $42,118 | $35,100 | ($7,018) | Johnson & Wales Univ-Providence , RI
1252 | $48,424 | $41,300 | ($7,124) | Loyola Univ New Orleans , LA
1253 | $39,466 | $32,300 | ($7,166) | Mount Marty College , SD
1254 | $36,908 | $29,600 | ($7,308) | North Central Univ , MN
1255 | $38,709 | $31,400 | ($7,309) | Maryland Institute College of Art , MD
1256 | $54,933 | $47,500 | ($7,433) | North Carolina State Univ at Raleigh , NC
1257 | $60,063 | $52,400 | ($7,663) | Tulane Univ of Louisiana , LA
1258 | $45,764 | $38,100 | ($7,664) | Siena Heights Univ , MI
1259 | $53,993 | $46,300 | ($7,693) | Manhattanville College , NY
1260 | $50,946 | $43,200 | ($7,746) | Univ of Tulsa , OK
1261 | $48,714 | $40,900 | ($7,814) | Morehouse College , GA
1262 | $37,656 | $29,800 | ($7,856) | Mitchell College , CT
1263 | $36,235 | $28,200 | ($8,035) | Saint Augustine’s Univ , NC
1264 | $45,257 | $37,200 | ($8,057) | AIB College of Business , IA
1265 | $46,279 | $38,200 | ($8,079) | Sewanee-The Univ of the South , TN
1266 | $42,204 | $34,100 | ($8,104) | Dakota Wesleyan Univ , SD
1267 | $52,213 | $44,100 | ($8,113) | Clark Univ , MA
1268 | $82,126 | $74,000 | ($8,126) | California Institute of Technology , CA
1269 | $37,082 | $28,800 | ($8,282) | Point Univ , GA
1270 | $47,900 | $39,400 | ($8,500) | Universidad Politecnica de Puerto Rico , NY
1271 | $44,199 | $35,500 | ($8,699) | McPherson College , KS
1272 | $58,112 | $49,400 | ($8,712) | Swarthmore College , PA
1273 | $51,390 | $42,600 | ($8,790) | Ohio State Univ-Main Campus , OH
1274 | $64,369 | $55,500 | ($8,869) | Univ of Rochester , NY
1275 | $51,885 | $42,600 | ($9,285) | Wheaton College , IL
1276 | $35,309 | $25,800 | ($9,509) | Kansas City Art Institute , MO
1277 | $41,729 | $32,200 | ($9,529) | Drury Univ , MO
1278 | $75,590 | $66,000 | ($9,590) | Yale Univ , CT
1279 | $70,167 | $59,900 | ($10,267) | Rice Univ , TX
1280 | $42,902 | $32,300 | ($10,602) | Earlham College , IN
1281 | $36,549 | $25,600 | ($10,949) | Gallaudet Univ , DC
1282 | $47,400 | $34,300 | ($13,100) | St John’s College , MD
1283 | $69,487 | $53,700 | ($15,787) | Cooper Union , NY

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Here’s the accompanying Economist article:
http://www.economist.com/news/united-states/21677231-new-federal-data-reveal-which-colleges-do-most-their-graduates-pay-packets-they-are

two vaunted names, MIT and Harvard, rise to the top of the earnings rankings. Yet most students who get into such places end up well-paid no matter what. Two economists, Alan Krueger and Stacy Dale, have found that graduates of selective universities do not out-earn those who were accepted by the same colleges but chose a “lesser” institution. To measure a university’s economic value, you need to compare the salaries of its graduates with the wages they might have earned had they studied elsewhere.

[jackrabbit14]

I see little value in any ranking based on earnings. The earnings are from the government score card right? Not self reported?

[whatthewhat]

I am also skeptical of lists, but this is interesting. I like that these lists have an unusual mix of schools at the top and bottom. Harvard is in the top 50, but Yale in the bottom 50. Davidson is in the top 50 and Pomona in the bottom 50…

It definitely is not your typical HYPMS list.

[Zinhead]

“A college that produces hordes of future doctors will have far lower listed earnings in the database than one that generates throngs of, say, financial advisors, even though the two groups’ incomes are likely to converge in their 30s.”

Probably the reason why Rice does so poorly on this list.

[GMTplus7]

I see little value in any ranking based on earnings.

The Economist’s scorecard normalized for choice of career. It didn’t simplistically compare petroleum engineer salaries with that of gender studies majors:

Finally, to avoid penalising universities that tend to attract students who are disinclined to pursue lucrative careers, we created a “Marx and Marley index”, based on colleges’ appearances during the past 15 years on the Princeton Review’s top-20 lists for political leftism and “reefer madness”.

[ucbalumnus]

The earnings are from government reporting, but only of earnings of students who received federal financial aid. At some schools, this may be only a small sample of students (e.g. only 32% of W&L students borrowed, presumably federal direct loans, and only 10% of W&L students received Pell grants).

[ucbalumnus]

@whatthewhat

I am also skeptical of lists, but this is interesting. I like that these lists have an unusual mix of schools at the top and bottom. Harvard is in the top 50, but Yale in the bottom 50. Davidson is in the top 50 and Pomona in the bottom 50…

The most useful part of this is to show that the differences are mostly based on characteristics not unique to an individual college (e.g. high/low achieving entering students, mix of majors, location, …).

[GMTplus7]

The Economist conceded the shortcomings of its methodology, which is a helluva lot more than what USNWR admits.

I like how the Economist list highlights colleges that are actually achievable to get admitted into. It doesn’t help 99.99% of students to be told that HYPMS are good schools, if the schools are not remotely realistic.

[Erin_s_Dad]

I appreciate them being up front with the limits on the analysis and bringing in the comparison to the Brookings report.

[ucbalumnus]

Note that most colleges do not fall too far from their expectations based on the characteristics used to determine the expectations. I.e they are not that unique in effect on post graduation income.

Where a college is an outlier compared to the expectations, one may want to check what other factor is at work, and whether it would apply to a given student. E.g. if the school has a fast track to Wall Street, but the student is not interested in that, then the income outperformance due to going to Wall Street would not apply to that student.

[Daddio3]

The single biggest problem with this list is it does not compare salaries, but compares expectations of salaries to salaries. So Yale, with a $66k median salary and an $75k median expected salary based on how amazing its accepted students are, takes a big hit on the list. Maybe less of their kids went there specifically to get a higher salary compared to Harvard. I have seen this same analysis of high schools – the schools that do the best are the ones whose kids perform pretty well despite not fitting the demographics of kids who perform well (2 college educated parents). High schools where many kids have two college-educated parents are SUPPOSED to do the best, so when they do, that is still only mediocre.

If my kid gets into Yale, graduates, and only gets a $66k job coming out of school, I am NOT going to complain that I should have sent the kid to Alderson Broaddus Univ where they would have made $43k instead of the $34k expected. This type of analysis is just NOT useful.

[Erin_s_Dad]

But it may be useful if the alternative school is Duke where an expected $69K salary turns into a $77K actual.

[marvin100]

In my view, it’s a good thing if a lot of wealthy students at a college wind up choosing to be social workers or teachers. One of the great values of a well-rounded education is the devalorization of lucre and material wealth.

[ucbalumnus]

@marvin100

In my view, it’s a good thing if a lot of wealthy students at a college wind up choosing to be social workers or teachers. One of the great values of a well-rounded education is the devalorization of lucre and material wealth.

It is often the students from wealthy backgrounds who are most able to afford to look beyond post-graduation earning power, as opposed to worrying about student loan payments or other personal or family financial stress immediately after graduation.

[cappex]

Really it just comes down to schools that have the most STEM students end up at the top, not an accurate ranking system IMO

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@cappex
Did u not read the article or any of the posts in this thread? The schools are normalized for the types of majors/careers it typically produces. Caltech even ended near the bottom of the ranking.

[Jssaab1]

@cappex Umm, really?? Villanova, Washing and Lee are at the top- STEM??? not at all, both make more lawyers than anything…Babson/Bently make business people…

as both of my kids heard me say time and time again, exceptional people go to every school and all will do exceptionally well regardless…