NCPA - National Center for Policy Analysis

Ivy League Schools Confer No Income Advantage

November 1, 1999

Students are not only under increased pressure to go to college, but to get into selective institutions -- where competition for admission is more intense (and the financial burden on families may be higher). After all, they have been told that there is an income premium enjoyed by graduates of elite schools -- higher than the premium placed on having a college degree from any public or private school.

But what everyone knows to be true just isn't so, according to a new study by Alan Krueger, an economist at Princeton University, and Stacy Berg Dale, a researcher at the Andrew W. Mellon Foundation.

Previous studies had found that elite colleges lifted their graduates' incomes beyond their natural abilities, by about 3 percent to 7 percent of income for every 100 points of difference in average SAT scores between schools.

  • Dale and Krueger examined the 1976 freshmen of 34 colleges -- ranging from Yale, Bryn Mawr and Swarthmore (highest in average SAT scores) to Penn State and Denison University (lowest in scores) -- with a gap between top and bottom schools of about 200 points.
  • They knew which colleges had accepted and rejected these students, and that by 1995, male graduates with full-time jobs earned an average of $89,026; women earned $76,859.
  • Comparing graduates who had been accepted and rejected by the same (or similar) colleges and comparing their earnings, they found that regardless of where they went, there was no difference in average incomes.

The result held for both blacks and whites. The only exception was poorer students, regardless of race; they gained slightly from an elite school.

The conclusion is that elite schools have little comparative advantage.

Source: Robert J. Samuelson, "The Worthless Ivy League?" Newsweek, November 1, 1999.


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