November 19th, 2001


Elite Colleges Not Necessarily Best Ticket to High Earnings

News from PRINCETON UNIVERSITY Office of Communications Stanhope Hall,
Princeton, New Jersey 08544-5264 Telephone 609-258-3601; Fax

Contact: Justin Harmon (609) 258-3601

January 26, 2000

Elite Colleges Not Necessarily Best Ticket to High Earnings

Study Shows Students Attending Next Tier Gain About the Same

PRINCETON, N.J. -- Going to an academically elite college does not
necessarily boost your earnings potential compared to a less elite
college, according to a study by Princeton University economist
Alan Krueger. In his paper "Estimating the Payoff to Attending a
More Selective College," published by the National Bureau of
Economic Research, a school's selectivity, as measured by
matriculants' average SAT scores, does not correlate with
students' later income, once the abilities of the students upon
entering college are taken into account. This finding challenges
previous studies positively linking earnings to a college's
prestige. The researchers did find, however, that for a subset of
students -- those from a financially disadvantaged background --
an elite education did bring greater financial rewards.

The paper, co-authored with researcher Stacy Berg Dale of the
Andrew W. Mellon Foundation, examines College and Beyond data
which tracks 14,239 adults who entered 30 colleges in
1976. Krueger and Dale correlated 1995 income of those adults with
the SAT scores of the colleges they attended. They also examined
data on 2,127 workers who attended a broader set of colleges using
the National Longitudinal Study of the High School Class of
1972. In both data sets, Krueger and Dale, like other researchers,
find that students who attended more selective colleges tend to
earn higher salaries later on than those who attend less selective
colleges. However, the researchers not only looked at the schools
that students attended but also where they were accepted and
rejected. They found that where a student applies is a more
powerful predictor of future earnings success than where he or she

Says Krueger, Bendheim Professor of Economics and Public Affairs
at the Woodrow Wilson School of Princeton University: "It appears
that student ambition, as reflected in the quality of the school
to which he or she applies, is a better predictor of earning
success than what college they ultimately choose or which college
chooses them." The researchers refer to this phenomena as the
"Steven Spielberg Effect"; the filmmaker, who was rejected by both
USC and UCLA film schools, ended up attending a less prestigious
program but went on to achieve tremendous success.

The researchers found a different pattern, however, for students
from financially disadvantaged backgrounds, whose earning power as
a group was improved by going to a more academically elite
college. "These findings suggest that colleges that provide more
tuition assistance to children from lower income families are
pursuing the right path, since we find that these are students who
benefit the most from attending highly selective schools," says

NOTE: The working paper (PDF format) "Estimating the Payoff to
Attending a More Selective College" by Stacy Berg Dale and Alan
Krueger is available online.