Ivy Leaguers' Big Edge: Starting Pay

[Evo]

I thought this was interesting.

Where people go to college can make a big difference in starting pay, and that difference is largely sustained into midcareer, according to a large study of global compensation.

In the yearlong effort, PayScale Inc., an online provider of global compensation data, surveyed 1.2 million bachelor's degree graduates with a minimum of 10 years of work experience (with a median of 15.5 years). The subjects hailed from more than 300 U.S. schools ranging from state institutions to the Ivy League, and their incomes show that the subject you major in can have little to do with your long-term earning power. PayScale excluded survey respondents who reported having advanced degrees, including M.B.A.s, M.D.s and J.D.s.

Even though graduates from all types of schools increase their earnings throughout their careers, their incomes grow at almost the same rate, according to the survey. For instance, the median starting salary for Ivy Leaguers is 32% higher than that of liberal-arts college graduates -- and at 10 or more years into graduates' working lives, the spread is 34%, according to the survey.

Continued...

http://finance.yahoo.com/college-education/article/105499/Ivy-Leaguers'-Big-Edge-Starting-Pay

 

[mgb_phys]

There are a couple of selection effects:
School career services tend to only track those grads in traditional (=well paid) jobs, they don't average in anyone travelling, working as an artist or flipping burgers.
It's probably also only true for general business type jobs, ie those not related to their degree, where who you know is more important. I don't know that there would be such a discrepency if you only looked at aerospace engineers or physicists.

Chemical engineering depts in particular used to make a big thing that their graduates earned twice the average - because 100% of their grads went straight into jobs.

 

[uman]

Also, top schools only take successful people, so it's no surprise that these people end up, well, succeeding.

 

[Choppy]

But is the material covered for a particular degree any different? Or is it taught in a more effective manner?

 

[will.c]

Also, top schools only take successful people, so it's no surprise that these people end up, well, succeeding.

I think this is a pretty solid explanation. We're looking at statistical data - not everyone who comes out of an ivy league school makes 34% more than anyone from a state university; that's silly. Rather, the Ivies have a rich tradition of taking in students that are ambitious and already have a plan for their future. Sure there's some who probably didn't deserve it (they usually end up in Congress) but for the most part it's gold in, gold out.

At an individual level, it doesn't matter where you choose to get a degree from. Out of an ensemble of people good enough for Harvard though, many of them are going to choose to go to Harvard.

 

[mgb_phys]

Also, top schools only take successful people, so it's no surprise that these people end up, well, succeeding.

They take only rich people ( or those with rich parents ) this tends to be a good predictor of future wealth.

 

[hubris]

Keep in mind that when you enter the work force (business cycle) and if you *could* get acceptance to an Ivy are significant factors, with the first being the stronger for prediction of earnings over one's life time and the latter showing up in mid career (iirc).

Edit: Of course this was starting pay, but what about starting debt?

 

[JoeTrumpet]

They take only rich people ( or those with rich parents ) this tends to be a good predictor of future wealth.

I can't really tell if this is a joke.

Of course this was starting pay, but what about starting debt?

My guess is it's rather low: Princeton, which is #2 on this list, has often the lowest debt upon graduation of any undergrad school. Their need-based financial aid, along with more recently Harvard's and Yale's, are the most exhaustive in the nation.

Princeton actually did a recent study on this topic. Their results showed that the strongest predictor of future wealth was not if one attended a "top-tier" school or if one was even accepted, but if one bothered to apply to one at all. The ambition and drive of students who apply to these schools make the difference, regardless of acceptance.

 

[RufusDawes]

They take only rich people ( or those with rich parents ) this tends to be a good predictor of future wealth.

Agree, something like 40% of a persons earnings accounted for by their parents.

 

[Vanadium 50]

They take only rich people ( or those with rich parents ) this tends to be a good predictor of future wealth.

I can't really tell if this is a joke.

It must be. I went to a top school, and my family was not rich. Not even close. While I was not in the first generation of my family to go to college, I was the first to go full-time and immediately after graduation.

 

[Topher925]

At an individual level, it doesn't matter where you choose to get a degree from.

Agreed. I have met/worked with many students and professionals from top level schools, UofM, Purdue, etc and while some of them have been very intelligent others have been, well not. I like to believe its the person that makes the professional and not the degree.

 

[mgb_phys]

It must be. I went to a top school, and my family was not rich. Not even close. While I was not in the first generation of my family to go to college

Yes - so was I, but both of us decided to go and do technical subjects, that's not the average ivy league graduate, if you compare the salaries of physics grads from ivy league and not there won't be much difference.

But if you compare the 'average' grad then you incude a lot of people who do the ivy league equivalent of PPE and immediately get a job on Wall st/Washington because of family connections. Apparenlty even if you a complete moron you can still take over your father's job.

 

[las3rjock]

But if you compare the 'average' grad then you incude a lot of people who do the ivy league equivalent of PPE and immediately get a job on Wall st/Washington because of family connections. Apparenlty even if you a complete moron you can still take over your father's job.

One need only consider the sitting U.S. President to realize that this is the case.

 

[GCT]

I am a little skeptical about Payscale ; in the past their data on entry level chemists was substantially different from that of the ACS data . Also it seems that their data on these average salaries are inflated which may mean that people who fill out their surveys are more eager then those who are deprived . Just go to their site and browse through the salaries that are listed for your job .

 

[las3rjock]

Princeton actually did a recent study on this topic. Their results showed that the strongest predictor of future wealth was not if one attended a "top-tier" school or if one was even accepted, but if one bothered to apply to one at all. The ambition and drive of students who apply to these schools make the difference, regardless of acceptance.

I think you're referring to http://www.nber.org/papers/w7322" . As you mention, that study accounts for some important selection effects that are ignored by the PayScale study.

 

[JoeTrumpet]

I think you're referring to this National Bureau of Economic Research working paper, which was eventually published in the Quarterly Journal of Economics. As you mention, that study accounts for some important selection effects that are ignored by the PayScale study.

Yes, that's it! Thank you for posting the link.

One need only consider the sitting U.S. President to realize that this is the case.

Haha!