Via Steve Hsu, a GNXP post about the benefits of elite college educations, based largely on a graph of income vs. US News ranking. While the post text shows some of the dangers of taking social-science data too literally (the points on the graph in question are clearly binned, so I would not attribute too high a degree of reality to a statement like “The marginal benefit of getting into the next highest ranked school is actually higher the higher the rank of your current school. In other words, Yale grads should really really want to go to Harvard”), the apparent effect is pretty significant. And Hsu reposts the text of a comment he left at GNXP, in which he identifies a likely cause: grads of the really elite schools are highly over-represented in the world of finance, and that over-representation is perpetuated by selective recruiting. If you’re not a student at one of the places where Goldman Sachs actively recruits, you’re not that likely to get into that world, or even to know that it’s an option. (See also Timothy Burke on similar issues related to the class background of students.)
Continuing in this vein, Hsu even offers an alternate metric:
To see the elite / non-elite divide most starkly, look at the probability of (earned) net worth, say, $5-10M by age 40. This cuts out almost all doctors and lawyers and leaves finance, startups and entertainment (i.e., movies or television; let’s ignore sports). Even after controlling for SAT, I would guess elite grads are 3 or maybe even 10 times more likely to achieve this milestone.
He’s almost certainly right about the distribution of wealth. But when it’s put that way, I’m not certain this should be seen as a Good Thing. I mean, maybe it’s just the third straight day of dreary rain getting me down, but when I look at the news of the day, I see a political and economic system that is pretty thoroughly broken. And it’s broken in ways that can be laid directly at the feet of the finance industry, the members of which have been handsomely rewarded for breaking, well, pretty much everything they touch.
So, while I am the product of a highly elite school, and teach at a moderately elite school, Hsu’s argument actually makes me question my support of elite-college education. While finance is the surest path to personal wealth (entertainment and startups have a greater element of luck to them), I can’t help thinking that we’d be a whole lot better off as a society if we had more doctors and fewer high-finance types. If not sending your kids to Harvard means they’re less likely to end up at Goldman Sachs, then not sending your kids to Harvard might be the responsible thing to do.