Does it Matter Where You Go to College? It Depends on Who You Are

Does it Matter Where You Go to College? It Depends on Who You Are
Imed Bouchrika by Imed Bouchrika
Chief Data Scientist & Head of Content

Students have been conditioned to think that going to a top school will lead to better chances of employment and higher pay. As such, the pressure to get into these elite institutions is intense for students and parents. One only has to look at the college admissions scandal dubbed Operation Varsity Blues, where Hollywood celebrities and leading business figures were charged with bribing school officials for their children to be admitted into elite colleges in the United States.

With all the fuss about college admissions, it’s only fair to ask, “Does it matter where you go to college?” In this article, we revisit the traditional advice of going to a top school by taking a look at studies that relate college selectivity with graduates’ income, job prospects, and workplace performance. With this information, parents and prospective college students can decide whether it’s worth going to an elite school.

Does it matter where you go to college? Table of Contents

  1. The Impact of College Selectivity: Clashing Views
  2. College Selectivity and Income Gain
  3. Impact of Attendance in Top Schools by Major
  4. Elite School Attendance: Outcomes for Men vs. Women
  5. University Pedigree and the Hiring Process
  6. Elite School Graduates’ Work Performance
  7. No Easy Answer for the Million-Dollar Question

The Impact of College Selectivity: Clashing Views

Traditional wisdom holds that going to selective colleges entails better pay-offs for students than going to non-selective colleges. One study that supports this was done by the National Center for Education Statistics (NCES) in 2000. In this study, researchers found that obtaining a degree from a selective institution was associated with an 11% to 16% increase in earnings for men. On the other hand, attending selective institutions was associated with an increase of 12% in earnings for women. Moreover, women benefited by attending a selective liberal arts college, which led to 24% higher earnings than they would have had if they would have attended another kind of school (Fitzgerald, 2000).

However, a study by Dale and Krueger (1999) found that where you go to college doesn’t matter in terms of income. They concluded that “students who attended more selective colleges did not earn more than students who were accepted and rejected by comparable colleges but attended less selective colleges.” They found that students who attended colleges with higher average tuition tended to earn higher income years later. Lastly, they found that income gains are highest for students who come from a disadvantaged background who study in elite schools.

College Selectivity and Income Gain

Dale and Krueger followed up their findings with another study on college selectivity and earnings in 2011. They collected data from the College and Beyond Survey (C&B) on students who attended college in 1976 and 1989. They then compared self-reported earnings from the C&B survey to data from the Social Security Administration (SSA). They measured college quality using average SAT scores, net tuition, and the Barron’s index, which measures school competitiveness. The researchers formulated a “self-revelation” model, which assumes that the choice of schools that students apply to reveal their potential ability, motivation, and ambition.

Under the self-revelation model, the researchers found that the return to college selectivity “falls dramatically” and becomes “generally indistinguishable from zero” for both the 1976 and 1989 group of students. For the group of 1989 students, they found that there was a positive return to attending a more selective school for black and Hispanic students and students from educationally disadvantaged family backgrounds. For instance, the data suggests that going to a college that requires a SAT score of 200 points higher would yield a 5.2% in earnings for students in 2007 for students with parents who had the equivalent of high school education. Conversely, there was no return in attending a more selective college for students with parents who had an equivalent of a college education. The researchers hypothesized that attending selective colleges may be beneficial to these groups of students because it gives them access to valuable job networking opportunities. In contrast, most students who apply to selective colleges can turn to friends and family for the same opportunities (Dale & Krueger, 2011).

women, education and labor statistics

Impact of Attendance in Top Schools by Major

Eide, Hilmer, and Showalter (2016) explored the relationship of college selectivity and chosen major aside from income. They discovered that college selectivity matters more to those who major in business, social science, education, and humanities. They found that business graduates from schools with top selectivity earned 12% more on average than schools with middle selectivity. In turn, graduates from middle selectivity schools earned 6% more than graduates from bottom selectivity schools (Eide et al, 2016). They hypothesized that institutional prestige gives business majors access to alumni networks and connections to employers for jobs and internships.

However, going to an elite school made no difference in income for graduates with majors in science, technology, engineering, and mathematics (STEM). The researchers found no statistically significant earnings differences for science majors across schools with top, middle, or bottom selectivity. Engineering graduates from the top and middle selectivity colleges only had “marginally significant” earnings while there was no significant difference for engineering majors from the top and bottom selectivity colleges. The researchers hypothesized that the skills a student learns in STEM courses are more important than the college they attended (Eide et al, 2016).

For social science majors, the researchers state that there is a premium for going to a top selectivity college over a middle or bottom selectivity college. However, there is no advantage for going to a middle selectivity college over a bottom selectivity college. For humanities majors, there is a significant premium to attending a top selectivity college over a bottom selectivity one. However, there is no advantage to attending a top over a middle selectivity college (Eide et al, 2016).

Elite School Attendance: Outcomes for Men vs. Women

Ge et al (2018) built on Dale and Krueger’s work by exploring how attending a selective college affects later-life outcomes. Like Dale and Krueger, they found that attending an elite college does not significantly improve earnings for full-time, full-year workers for both men and women. This finding supports earlier studies, which concluded that where you go to college doesn’t matter. This is especially important when one considers the reasons why college is expensive in the U.S.

In addition, they were able to uncover novel findings, particularly on the effects of college selectivity on women. For one, they found that going to a college with a 100-point higher average SAT score boosts the probability of women’s participation in the labor force by 2.3 percentage points. Ge et al point out that this could possibly be due to increased labor supply or labor demand, such as gaining access to job opportunities that women find meaningful or that fit their schedule (Ge et al, 2018).

Secondly, the researchers found that a 100-point increase in a school’s average SAT scores increases the probability for women to earn an advanced degree by 4.8 percentage points. It also decreases women’s chances of getting married in their late 30’s by 3.9 percentage points but increases the likelihood that a woman’s spouse has an advanced degree by eight percentage points (Ge et al, 2018).

University Pedigree and the Hiring Process

Despite data suggesting the contrary, employers still continue to hire graduates from elite colleges. According to an Indeed survey on the costs of a top college, 29% of senior-level and executive managers said that they preferred to hire candidates only from top institutions. The majority of survey participants (48%) said that where the candidate graduated is a “somewhat important” consideration in the hiring process. Only 4% said that it doesn’t matter where they obtained their degree as long as educational requirements for the role are met (Indeed, 2016).

Source: Indeed Survey

However, the same survey also found out that the preference for graduates from elite schools is most likely the result of managers’ own biases. Forty-seven percent of managers surveyed who self-identified as coming from a top school agreed with the statement “I believe that employees from top education institutions are on par with the rest of the top performers.” Meanwhile, 55% of managers who agreed with this statement did not self-identify as coming from a top school.

When asked about the qualities of top performers, 72% of managers surveyed said that what matters most is that the candidate has the ability to work well with others. In addition, 71% said they must have strategic thinking and 66% mentioned that they should be self-directed. Managers ranked the college name on a degree as the least important for top performers (Indeed, 2016).

The survey also noted that degrees from elite colleges matter more to managers looking to fill entry-level positions or executive roles. However, it is not as important when hiring for middle management jobs (Indeed, 2016).

In another survey about data talent, Correlation One (2019) found that tier two and three colleges had “significantly more elite data science and analytics candidates than the top 30 schools.” In fact, 75% of such candidates came from tier two and three institutions. They also found them to be “significantly more skilled than average students from tier one schools.” Correlation One warns that when large companies focus on candidates from top colleges, they only reinforce the bias in the hiring process, skew the competition for talent, and do not maximize hiring outcomes for most firms.

Elite School Graduates’ Work Performance

Like the Indeed survey, Taras et al (2019) found that an employee’s university pedigree is not a reliable indicator of performance in the workplace. In the study, researchers looked at the performance of 28,339 students in global virtual teams as they worked on an international business consulting project. The students came from 79 countries and 294 universities, which figured in the top 10 to 20,000 positions in the Webometrics global university rankings.

They found that for every increase by 1,000 positions in the Webometrics rankings, overall performance improved “only nominally” by 1.9%. The performance differential jumps to 19% when comparing graduates from a top university versus a “global average” university. However, the researchers explained that this seemingly significant increase was for graduates from colleges that were 10,000 university rankings apart. Considering that new hires will be most likely hired from a more narrow pool of candidates, the researchers estimate that the realistic difference is closer to 1% (Taras et al, 2019).

Moreover, they observed that while graduates from top colleges had a slightly better performance than other graduates, they tend to focus more on accomplishing instrumental tasks and less on interpersonal relationships. The researchers also noted that graduates from elite schools tend to stir more conflict, held fewer non-instrumental conversations, and showed less commitment and identification with their teams (Taras et al, 2019).

No Easy Answer for the Million-Dollar Question

The answer to “Does it matter where you go to college?” is hardly a black-and-white matter. On one hand, a study circa 2000 shows that yes, it does matter as college selectivity was shown to increase incomes for men and women. However, more recent studies have cast doubt on these findings. Based on these studies, college selectivity only matters to students from certain backgrounds and for select majors. Specifically, attending an elite college is more beneficial to Black and Hispanic students and those that are economically disadvantaged and whose parents did not achieve a high level of education. It also appears to matter more to students with business, humanities, and social science majors but not for students with STEM majors.

Attending a selective college also benefits women more than men. Doing so makes them more likely to participate in the labor force or get an advanced degree. When it comes to job type, a candidate’s college pedigree has more weight in entry-level or executive positions but not in middle-management jobs. While it may help graduates get their foot in the door, there are studies and surveys, which suggest that college selectivity is not an indicator of stellar performance in the workplace.

 

References:

  1. Correlation One (2019). Future of Data Talent. 2019 Annual Report. New York, NY: Correlation One.
  2. Dale, S., & Krueger, A. (1999, August). Estimating the payoff to attending a more selective college: An application of selection on observables and unobservables. NBER Working Paper 7322https://doi.org/10.3386/w7322
  3. Dale, S., & Krueger, A. (2011 June). Estimating the return to college selectivity over the career using administrative earnings data. Working Paper 17159https://doi.org/10.3386/w17159
  4. Eide, E., Hilmer, M., & Showalter, M. (2016 January). Is it where you go or where you study? The relative influence of college selectivity and college major on earnings. Contemporary Economic Policy, 34 (1), 37-46. https://doi.org/10.1111/coep.12115
  5. Fitzgerald, R. (2000 August). College quality and the earnings of recent college graduates. NCES 2000-043. Washington, DC: National Center for Education Statistics.
  6. Ge, S., Isaac, E., & Miller, A. (2018 November). Elite schools and opting in: effects of college selectivity on career and family outcomes. NBER Working Paper 25315. https://doi.org/10.3386/w25315
  7. Gunkel, M., Taras. V., Assouad, A., Jimenez, A., Tavoletti, E., Lei, W., Svirina, A., Shah, G., & Kraemer, J. (in press). The predictive power of university pedigree on the graduate’s performance in global virtual teams. European Journal of International Management. https://doi.org/10.1504/EJIM.2021.10031657
  8. Indeed (2016, August 17). Is the cost of a top college worth it? It depends. Indeed.com.
  9. Nadworny, E. (2020, September 30). Lies, money, and cheating: The deeper story of the college admissions scandal. NPR.
  10. Shamsian, J., & McLaughlin, K. (2020, September 2). Here’s the full list of people charged in the college admissions cheating scandal, and who has pleaded guilty so far. Insider.
  11. Taras, V., Shah, G., Gunkel, M., & Tavoletti, E. (2020, September 4). Graduates of elite universities get paid more. Do they perform better? Harvard Business Review.

Newsletter & Conference Alerts

Research.com uses the information to contact you about our relevant content. For more information, check out our privacy policy.