Search This Blog

Monday, March 18, 2019

The Elite College Premium

Many posts have discussed inequality in higher education

Christopher Ingraham at WP writes about the college admissions fraud scandal.
Federal data on post-collegiate earnings underscore why some people might be willing to risk a possible felony to get their children into the “right” schools: Graduates of the nation’s elite universities enjoy a significant wage premium relative to the typical college grad. This is particularly true at the top end of the income spectrum, where the richest graduates of the nation’s top-tier colleges can earn more than double what their peers at other schools typically make.
Graduates of the nation’s four-year colleges and universities can expect a median annual salary of about $44,000 by the 10th year after they first enrolled in college, according to a Washington Post analysis of data from the Department of Education. By comparison, that number jumps to $84,000 for the top 10 percent of college grads.

But if we look only at a select group of elite colleges — say, the eight schools reportedly targeted by the defendants in the Department of Justice’s Operation Varsity Blues investigation — those numbers change dramatically. The median graduate of those schools (which include Georgetown, Stanford, UCLA, the University of San Diego, the University of Southern California, the University of Texas at Austin, Wake Forest and Yale) can expect to earn about $73,000 a decade after they first enroll. And those who finish in the top 10 percent at those schools typically earn about $161,000 — nearly double the income of the top 10 percent of graduates of the rest of the nation’s colleges.
One important caveat is that the data are derived from students who received some form of federal financial aid during their undergraduate years. The roughly 15 percent of students who don’t need assistance aren’t included in the calculations. If those students were included, it would likely shift these distributions upward, although it’s unclear whether that would result in a larger or smaller earnings gap between graduates of top schools and everyone else.