How Much Value Does an "Elite" College Provide?

How far will a degree from an elite college get you? A new working paper (ungated version here) from Kevin Lang and Erez Siniver tries to answer that question by?examining labor-market outcomes for Israeli students at Hebrew University (a leading university) and the College of Management Academic Studies (a “professional undergraduate college”). The authors found that a degree from an elite college will help you get a foot in the door, but skill quickly triumphs. “Our results support a model in which employers have good information about the quality of HU graduates and pay them according to their ability, but in which the market has relatively little information about COMAS graduates,” the authors conclude. “Hence, high-skill COMAS graduates are initially treated as if they were the average COMAS graduate, who is weaker than a HU graduate, consequently earning less than HU graduates. However, over time the market differentiates among them so that after several years of experience, COMAS and HU graduates with similar entry scores have similar earnings. Our results are therefore consistent with the view that employers use education information to screen workers but that the market acquires information fairly rapidly.” [%comments]


Eric M. Jones

Another bogus study. This is not a black and white problem. It is hard to measure the relative "value" of a particular college, but it is probably best done by future earnings. It is a market of sorts, you know.

I'd bet Poupon U. vs Harvard would be no-contest.

geek

why israel, again?

matt

However, if you looked at Wall Street jobs, I would be willing to bet that you will find a larger proportion of 'elite' school graduates. And if you compare Wall Street salaries for similar jobs (at the same skill and performance level) in other industries, there's no contest who is paid better. So while I agree with the findings in the noted study, I believe there are exceptions where the right college gains you entry into a system (in my example, Wall Street) where the return on the investment is quite worthwhile.

mary

I'm not sure that I understand your article examples. Which university is supposed to be the "elite" institution? It also doesn't make sense that if one group started off at a higher income level, things would even out across the years. Why wouldn't the first group continue to have a higher income level simply because of the fact that most people don't take pay cuts when moving forward in their careers, but tend to build upon their previous salary levels?

Michael Ball

You can't get paid at all if you can't get your foot in the door. And today, that's not easy even when some have 20+ years and an advanced degree from an elite school.

Also, when factoring in the cost of elite schools (especially for undergrad), is the average aid package figured in? Because many people receive excellent packages making the cost near many (more selective) state schools. And for those who don't need aid, a good number simply just have the money to spend. I don't see how you can measure the value of something like that when the overall cost and the comparative costs to families differs so widely.

Adam

An elite university is good for "only" a foot in the door? A foot in the door is absolutely necessary. You can't lead the team if you never get to try out.

I'd be interested to see the numbers on what percentage of HU-educated applicants get an interview in the first place, versus what percentage of COMAS grads do.

jonathan

A study of academics found the prestige rating of the grad school had a 10 year effect on earnings for people going into academia. The length of the effect should vary by field - turnover, numbers of job openings, etc.

DrakeBullet

Perhaps its time to quantify what the elite college degree does:
- Shows ability to get grades and compete for them
- Places you elbow to elbow with others like you
- Allows for the creation of relationships with like-minded, ambitious people

But just as hard work (resulsts) trumps talent over time, a degree from an elite university holds its value only if paired with ongoing results.

Lawrence

This is a hard question to measure, but I think salary is the wrong metric. Job satisfaction is probably the correct one, but is that much more difficult to determine.

James

I think it also depends quite a bit on what field you're in. Those Wall Street jobs, maybe yes. (I've no direct experience.) Engineering & science, hardly at all.

EK

Let's see stats for Harvard v. U of Nowhere. I am sure the data are a lot more pointed.

di

How much of the foot in the door is through the networking that the elite college provides, such as your roommate's dad or uncle being on the board of the Suchandsuch Corp. and that gets you an interview you wouldn't otherwise get?

Joachim

Freakonomics author Steven Levitt is a perfect example of elite college advantage in action. Would an economics professor at State U get a book deal and be able to launch a mass media movement like Freakonomics? The network and prestige associated with Harvard, MIT and U of Chicago (all Ivy level private schools) are what enabled Levitt to get to where he is.

I'm a scientist and have worked at a UC (top tier state school) and an Ivy. The quality of students and education are the same, really there is no difference. The job fairs and recruiting at the Ivy are light-years beyond what was going on at the UC. I've had a much easier time placing students in both industry and academic positions from the Ivy school, even to companies and schools I "abandoned" when I left California and their "privileged" relationships with UC. I've also had an easier time recruiting research staff to my lab here, despite a lower salary compared to cost of living. That is real value, and it's a LOT of value.

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Rohan Shah

Elite college status would matter if you don't have much else going for you (at least in Engineering). Once you have some level of work experience, you cease being Mr. X from "Ivy league". You are then known by your work experience.

However, I wouldn't like other commentators discount the "getting in" capabilities of an Ivy league. Us public university graduates have to prove so much more when trying to find our first jobs.

Gary O.

As EK suggests, there may be a greater disparity between the "value" provided by an elite college in the UK or US than in Israel. The authors fail to mention two possibilities: (1) that perhaps Israelis are less obsessed than Americans or the British with attending or having their children attend elite colleges; (2) that Israelis are equally obsessed, but so much so that Hebrew University is not even in the same status universe as the US or UK elite (didn't Netanyahu attend MIT?). Without addressing these questions, all the study does is reinforce the prejudice that those that attend elite universities attain what they do based largely on merit alone (you know, like George W. Bush).

Ian Gilbert

Whether these results apply in other cultures and societies with different business values, different class structures (overt and covert), and different forms of social distinction (snobbery) is still an open question.

Are British employers, for example, as open-minded toward red-brick graduates as Israeli employers are to the graduates of COMAS?

Diana

The answer to geek's question "why Israel, again?" is pretty simple. Israel is an open society in which researchers can ask any question they want. It is a country with a large number of universities and of professors studying stuff and publishing papers. And, like professors in other small countries where few outsiders speak the language, they often publish in English. Papers published in French, Turkish or Japanese are less likely to be noticed by an American blog.

Marc W.

In fields like engineering it has been my experience that, depending on what you want to do, going to an "elite" school (like an ivy) not only might not provide a definitive advantage,it can be a hindrance. I think the prevailing opinion is that a lot of the more prestigious schools prepare their students for grad school, and not necessarily a profession. I guess it may be true that it can help get your foot in the door for the highest tier jobs, but if you're one of those just looking for a job to get started in, doing well at your state school should get you noticed by employers. If I recall there was a recent survey of job recruiters asking them to rank schools, and it was dominated by state universities.

Karin

I did not read the "ungated" version of this, but while this study may reveal some truths, what happens in Israel may not be reflected in the United States or anywhere else. To state the obvious, perhaps, there are enough variables in this type of study, that it can not be used to give a complete and accurate picture of individual experience on the market place.

Matt J

Sorry but I sense a lot of elitism in some of the earlier comments. I work at big company out here in Silicon Valley and we are interviewing people almost weekly. From my experience, it's easy to assume "Ivy" students are going to ace the interviews. "OMG, I Cannot WAIT for this MIT guy!!!" Sadly, once we get him here, he fumbles and we all walk away from him. Then out of no where, some little rock-star kid who didn't even finish state school blows us away.

I've learned to not even care about the school part. I want to see if this guy has self initiative and a personality. I want to see if he really knows what he says he knows.

Besides most schools teach the same material. At least they all have to meet the same baseline to be accredited.

Sure getting your foot in the door anywhere is easier with "Ivy" credentials. Yet, in my industry at least, it's just a foot :-).