Why America cares about elite schools

Many articles have been written about elite schools (which can construed to include Ivies, top non-Ivies, best-in-class technical schools, and what are commonly referred to more generally as “top schools”) since the birth of the university, and the post-Great Recession (GR) era is no different. It may even be that we focus more on them now than we did in the past. To some, the reasons why Americans continue to care as much as we do seem obvious. Then I read something written by what I consider an otherwise knowledgeable person— a forum post, an article — that reveals that these reasons may be less obvious than they seem. At the very least, they can be incomplete.

First, a couple of definitions. In this post I’ll use the term economic class to refer to how much wealth you have access to, which can take a number of forms: your actual income, your liquid savings and investments, how much others would be willing to give you without the expectation it’d be repaid, and similar. This first one is typically broadly understood.

I’ll also use the term social class. In America, many have long paid lip service to the idea that social class does not exist (“classless society”), but that’s a myth, which is an open non-secret at this point in our country’s history, especially after what’s happened since the GR. Social class in America is something we usually call culture, group, or subculture, but with some special properties, namely that different social classes have different requirements for entry and continued membership, some of which are related to economic class itself. Many people also belong to multiple classes at once, at different times and places, and can code-switch between them.

On one end of the spectrum, you have, for example, musical cultures. The barrier to entry for them are things like listening to a certain kind of music, knowing the names of artists associated with the music, and possibly going to online spaces or live events that showcase or celebrate them. Some have additional requirements to be spotted as a member (e.g., fashion choices); these requirements vary. With few exceptions, nearly anyone can belong to one of these.

On the other end of the spectrum, you may have something like globetrotting, elite entrepreneurs. The requirements for entering this social class will generally be things like investing in companies (often using one’s own money), understanding and performing cosmopolitan, “post-state” values, traveling and sampling various cultures, and going to global-focused events like Davos. Unpacking the requirements will show more requirements (having money, having access to elite networks, having knowledge of certain values, etc.) that are difficult to obtain for many.

In-between those two extremes, there’s a wide variety of requirements for entry and continued membership. The ones I’m interested in concern what America considers elite social classes. An important thing to point out here is the intersection and interaction of economic and social class; as is made clear by the above, many of the latter require the former. It gets more complicated than that, though, and that is where elite schools come in. You may also note that this article deals with both the human capital and signaling returns to elite schools, as I believe both are important; they are not mutually exclusive, as some supporters have posited.

What elite schools get you

Some of these items apply to non-elite schools, but for those, the question is the level of effectiveness, rather than existence of a benefit.

• High-quality instruction. Due to their abundant resources (Ex. 2015 Endowments: MIT 13.5B, Stanford 22B, Yale 25B), they can afford to pay the most for teaching staff, materials, lab equipment, and other things that cost money. Money does not guarantee quality (there are many talented instructors at non-elite schools, and likely some poor ones at elites), but it does help provide a baseline of quality, and assures that teachers will never want for those resources (and won’t have to spend as much time thinking about how to get them, as they would at less well-funded schools.) There are proposals to make teaching effectiveness more transparent via assessments, for example, which are efforts worth supporting, but we’ll likely find that these schools do just about as well as they are believed to. Even if they were to fall short, they have the resources to fix the problems, and would likely not have an issue trading on their legacy in the time needed to make said fixes. In any case, it’s hard to argue that elite schools, on the whole, don’t provide excellent educations.
• Resources to ensure you graduate. It’s semi-conventional wisdom that elite schools, for the most part, are harder to get in to then to fail out of. They have money, and hence staff resources, to help you with material, help you navigate the various systems with the school, and help you stay on track generally (counseling, for example.) Lesser-resourced schools may not be able to do this.
• Access to networks of intelligent, well-connected, highly ambitious people, many of whom are already elites. The already-elite in attendance will have access to networks of other powerful people, through whom introductions can be made, which may lead to previously unavailable opportunities; and money, both their own and potentially that of relatives, which may be used to fund businesses or other projects. It also means access to people who turn out to be future employers, employees, or co-workers, who, due to the fact that they will go on to work in powerful organizations, can grant access to the most desirable, higher-status, better paying jobs through personal recommendations and alumni networks, often an important part of getting hired. Meetup groups and similar things cannot replace this.
• Immersion in what might be termed corporate-inflected, cosmopolitan, liberal meritocratic culture. Knowledge of, and the ability to perform, the mores, likes, dislikes, expectations, shared values, and behaviors associated with this culture is incredibly valuable when it comes to getting high-status, high-paying jobs, and allows one to function well within many modern organizations (it can also be challenging to acquire, reinforcing its importance.) Organizations and departments doing the hiring sometimes, perhaps often, favor those of similar cultural backgrounds (which is something that has a host of well-known problems associated with it, but that’s not immediately relevant to this article), which means that when it comes to actual hiring decisions, those who are steeped in this culture are going to be favored; they’ll already know what’s expected of them.
• In the hierarchy of degrees, these are the most respected. In our ever more competitive society, bars continued to be raised and filters continued to be tightened. Credentialism creep is only likely to worsen with cognitive jobs and the the continued rise of automation; when employers are getting dozens of resumes for an each open job, using degree level and school makes cutting down that pile easier. We’ve had “Bachelors Degree is the new High School Diploma” and “Masters is the new Bachelors”; that is not going to be the end of it. Community college will give way to mid-level non-elite schools; mid-level non-elite schools will give way to top-level non-elites; top-level non-elites will give way to elites; and elites may have to give way to top-level elites.
• Now for arguably most important reason, the one that too rarely gets articulated directly: in America, going to elite schools is how you join the elite. There are other ways to join the elite, of course, but they are often much harder. You can be born into it (Gates and Zuckerberg are frequently cited as “dropouts” who became successes, but should better be thought of as people who did not need college because they already had access to family money, elite networks and culture, and had already gotten a high-quality education at the lower level [in the case of Zuckerberg, you can add elite prep school]); you could build a business that has wild success (Mark Cuban); or you could be incredibly talented at something, and manage to leverage that into elite status (Superstar Effect), which applies to a small number of artists and modern artisans. Barring those three, attending an elite school is the most well-understood, most direct route to getting there. More difficlut and obscure routes exist, but almost by definition, those aren’t going to work for most people.

Perception is reality

The belief that those who went to elite schools are inherently more qualified, more talented, more likely to succeed, more worthy helps create self-reinforcing cycles of success, regardless of whether or not that’s true (as Hayes points out in Twilight of the Elites, it does not guarantee competence when things are on the line, but that’s less relevant to more “everyday” questions like getting jobs, getting support from others, and receiving investment capital.) If a cultural belief is as powerful and embedded as this one, it’s not something individuals have much power to work around. Here are some examples:

I’m just being really honest, it [an application] pretty much goes into a black hole. And I’m pretty open about that with the students I talk to. It’s tough. You need to know someone, you need to have a connection, you need to get someone to raise their hand and say, “Let’s bring this candidate in.” … Look, I have a specific day I need to go in and look at … the Brown candidates, you know, the Yale candidates. I don’t have a reason necessarily to go into what we call the “best of the rest” folder unless I’ve run out of everything else. … Unfortunately, it’s just not a great situation. There’s not an easy way to get into the firm if you’re not at a target school.

“There is an enormous threshold effect once you hit the “elite” level of colleges, because it’s where many industries heavily recruit. It’s relatively easy to sleepwalk from Harvard into a career in finance or consulting, very difficult from even a very good state school. “Qualification” has nothing to do with it.”

There is a reason for that bias — and that is credibility of the candidates. Imagine, in a pool of potential hires, having to shuffle through 90% chaff to get to the 10% grain in a humanly impossible timeframe. Elite institutions solve this filtering or shuffling problem to a large extent — which is why people who are after credible talent go to elite institutions, pay whatever they heck the institution demands and get the required candidates.

I had nightmare of a interview experience with AirBnb in 2012. They asked me take 2 days off from work and fly all the way to SFO after I wasted couple of hours doing their coding homework. The first interviewer started with “your degree is not from a good school” like the very first sentence right to my face. He then asked me a string matching question, and insisted that I code up his brute force solution (with terrible insert complexity) and second interviewer asked me to code up a binary search tree and . After which the recruiter walked in asked me to leave the building saying the interview was not going well and walked me out of the office.

Its all too common. Probably for the usual reason — it works so well. Many candidates from a ‘good school’ have been filtered for ability, so essentially come with an endorsement. Those from other schools don’t have that endorsement. They may be equally capable, but then again they may not. In fact, often not.

Nowadays, at least for their engineering internships, they have a pre-filled list of top schools to choose from followed by an “other” option (at least when I tried applying a couple years ago).

That told me exactly what I needed to know. I’d be instantly rejected because of not going to a “good school”.

This is sadly common in the supposedly meritocratic startup land. Two large startups I recently worked with didn’t even bother recruiting new grads outside of about ten universities, and also placed overly high importance on the universities of even experienced hires. Their reasoning was that they only wanted “the best” employees. I understand that college admission boards already act as a sort of pre-recruiting filter to select competitive students, but it just seems absurd to exclude 95+% of available employees based on a single credential.

I worked at a startup where we had a few people from MIT and Stanford.

When investors came visiting they would be introduced “this is Mike from MIT” where other people who were at least as qualified as the ivy leaguers would get ignored. The VCs seemed impressed. They didn’t even need a network. The name of the school was enough to stand out.

Result is that the Stanford and MIT guys would often start their own VC funded companies.

VCs are risk-averse pattern matchers. Their training patterns include knowing that startups with a high percentage of MIT and Stanford grads do well. Despite the fact that correlation isn’t causation, they live off of that fallacy, so they would rather invest in a bunch of MIT and Stanford grads than not.

It actually makes a lot of sense for a VC to do that. They have a huge incentive to have a lot of false negatives and avoid false positives, so it’s much better for them to use criteria that will eliminate good companies than allow bad ones.

I know for fact that engineering students who attend universities like Carnegie Mellon, Waterloo and Stanford, receive way more opportunities to work for major companies early on versus their peers at other public and private universities. This is purely built on the reputation of these universities and there history as feeder schools to Microsoft, Apple and Google. Its a self fulfilling prophecy kind of because the top students only want to go to these universities, keeping them the best.

That’s just a tiny tip of a very large iceberg. In terms of startup founders, where do people go to school?

• Twitch: Yale, MIT
• Cruise: MIT
• OMGPOP: Princeton
• Heroku: UCSD
• Airbnb: RISD, Harvard
• Dropbox: MIT
• Zenefits: Harvard

How about top technology companies (that hold coveted, high-paying jobs) like Twitter, Facebook, and Google? Where do most of their employees come from? Stanford, MIT, CMU, and UC-Berkeley.

Of course there are exceptions to the above. Some went to non-elite schools. Others don’t even have a degree. It remains true, however, that those that do attend elite schools have enormous advantages in those areas.

The state of the ladder and hidden advantages

The ladder leading to higher economic and social classes — the metaphor we use for social mobility — is rickety, and the distance has between each rung has grown. In some quarters, there exists a desire or tendency to downplay the advantages of elite schools and what they get one in terms of the ladder. Here’s one example:

But students shouldn’t panic if they don’t get a spot — it is still possible to be successful: A well-known study from Mathematica Policy Research economist Stacy Dale and Princeton University economist Alan Krueger found that students with similar academic characteristics who applied to elite schools such as the Ivy institutions had similar earnings levels later in life, regardless of whether or not they ultimately attended an elite institution.

Earnings are obviously important, but that’s not all people are looking for, or receive, by attending elite schools.

In the excellent piece “Shut up about Harvard” (one of the inspirations for writing this article), Mr. Casselman states:

Those who attended public colleges often went to a handful of top research universities such as the University of Michigan or the University of California, Berkeley. FiveThirtyEight is just as bad: The vast majority of our editorial staff, including me, went to elite, selective colleges. (I went to Columbia.)

In the process of admonishing the media to “Shut Up” about elite schools, Mr. Casselman reveals exactly why we’re obsessed with them in the first place. A respected organization having desirable jobs has stated that its employees are almost uniformly from elite schools. So while it has discussion of other extremely important issues like ballooning student debt, the underfunding of state colleges, and a variety of others, the piece, and by extension, the organization, cannot escape the fact that the obsession exists for a completely valid reason: if you want to work at a respected organization like FiveThirtyEight, you’ll probably need a degree from an elite school.

Now, some may protest that simply attending an elite school does not mean you’ve joined the elite, and this is where the American conflation of social and economic class obscures the truth: going to an elite school puts you in the social elite, even if only on the first rung of that section of the ladder, and even if it does not automatically or immediately put you into the economic elite. So while you may be an “elite newbie” (and may be in mounds of debt), you’re still there. Having that name on your resume alone gives you large advantages, many of which have been enumerated above. There are a few more, though they are more obscure, and may be unrealized even by those that (now) possess them:

• A job/organization quality floor. Having an elite school name virtually guarantees that you’ll be able to get access to decent or better organizations, and that, generally speaking, you will not ever have to work in “bad” jobs. It may not guarantee you a top job, a great job, or a top organization, but it at least ensure that you’ll avoid the worst ones.
• Relationship flexibility. Assortative mating has been a hot topic for years. Part of the discussion of the topic involves the question of direction: “dating an equal,” “dating up,” or “dating down” (but this could just as easily apply to platonic friendships “friending up” and “friending down.”) Even if you find the topic crude, even crass (I do), it’s hard to escape the reality that having an elite degree means maximum flexibility in who one chooses to be in any kind personal of relationship with. There are plenty of people who defy these standards (which is wonderfully open-minded, and I heartily approve of), but “birds of a feather” mean that many will only associate with those that they consider at least their educational equals, or, more benignly, that those will be the only kinds of people they actually know.
• Automatic respect / being listened to / taken seriously. Unlike lesser-degreed or un-degreed members of an organization, those with a (known) elite school degree are more likely to be respected, listened to, and taken seriously right off the bat. These schools not only confer the degree holder a patina of competence and respectability, they may also ensure that the holder gets first crack at promotions, higher raises, and may imbue the holder’s work with an implicit seal of quality (somewhat less true in technical fields, where measures can be more objective.) That seal of quality also applies to hiring itself (“No one ever got fired for buying IBM” could easily be “No one ever got fired for hiring from Stanford.”)

Who’s the audience, and should we really shut up?

An interesting thing I noticed while reading pieces and papers on this topic was the expectation of who the audience is. Unlike many of these articles, Casselman addresses it directly:

Of course, the readerships of the Atlantic and Washington Post probably don’t mirror the U.S. as a whole. Many readers probably did attend selective institutions or have children they are hoping will. It’s understandable that media outlets would want to cater to their readers, particularly in stories that aim to give advice to students or their parents.

It’s one of those obvious statements that actually isn’t all that obvious. The pieces are often targeted at anxious, possibly precariously upper-middle economic class parents and young potential students. There are a few things to say about this. First, a quote:

You may get a better bang for your buck elsewhere: If you look at return-on-investment (ROI) tables compiled by organizations like PayScale, not all of the colleges that are hardest to get into land at the top of the list. And as MarketWatch noted earlier this week, the degrees that usually rank best on ROI lists are STEM-focused credentials from private institutions. But if you take into account the rate of return — or, as financial-aid expert Mark Kantrowitz describes it, the net price of the school versus the outcome — degrees in the same fields from public colleges are a better investment.

Buried in these statements is a tautology: if you’re elite or near-elite, you will not benefit as much from attending an elite school. The wealthy, for whom these schools serves some additional purposes (it’s simply expected, it acts as a finishing school) are largely unaffected by these concerns; they’ll do fine either way. When it comes to those who are not in that class, something different happens:

It’s important to note, though, that a few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college. “For them, attending a more selective school increased earnings significantly,” Mr. Krueger has written. Why? Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home.

Which weakens the case for “Shutting Up” considerably. The benefits for the above are so large, that, if anything, we should be focusing more on ways to get them into these institutions. I’d go so far as to say these schools should consider not only providing a full-ride (including living costs), but that they should actively court people in these classes both as high school students and adults, and that they should also consider (or be incentivized, or forced) to accept promising “academically unprepared” people who are enthusiastic and intelligent, even if that essentially means redoing high school (well) for a year in college. If a low-income person who is very bright and driven, but attended a horrible high school and/or has a poor academic record, isn’t it in the interests of society, the student, and (arguably) the institution to step up assistance? So far, that has not been happening.

This brings me to the second point: elite school and status anxiety is moving downward from the economic upper-middle class, fueled by (correct) perceptions of economic precariousness. A job market where software is eating the world, automation is on the march, cognitive skills are in ever more in-demand, and workers must train non-stop (and often on their own dime) just to tread water is a market where every advantage counts. Credentialism, as described above, means that people who previously wouldn’t have dreamed about going to college (because they didn’t need to in order to make a good living), must now think not only about their major, but about where they attend. As the economy continues to bifurcate, this problem only reinforces itself; winners keep winning, losers keep losing. In a winner-take-all system, if you’re not a winner, you’re a loser. This may seem overstated, even harsh, but is an idea that many have (in my opinion, correctly) come to believe:

Hierarchical rankings in higher education have become far more important than ever, because the economic reward for elite educational credentials has jumped sharply in recent decades. Underlying these changes is the spread of winner-take-all markets, in which small differences in performance (or even small differences in the credentials used to predict performance) translate into extremely large differences in reward. Robert Frank, Goldwin Smith Professor of Economics, Ethics, and Public Policy at Cornell University, describes the evolution and the effects of the winner-take-all trend in higher education.

People at elite institutions are generally not going to be found in the low-wage service sector, which is where much of the job growth since the GR has occurred. The employment stats as of this writing look better than they have in years (though the employment-to-population ratio is not looking as good), but if they’re creating low-wage jobs, who is doing those jobs? As of March 2016, the underemployment rate is 14.5 percent. That means those positions are likely going to be filled with people from non-elite schools, and those without degrees, as per the hierarchy of degrees. If, as scholars like Autor have stated, that job polarization will only continue to increase along with routinization, who is likely to be part of the largely zero sum remaining-job-scraps arms race? It’s not likely to be elite school grads. Our collective “obsession” with elite schools, in a world of increasing economic precariousness and heightening levels of competition, starts to look less like its borne of unwarranted panic or overblown media narratives, and more like rational economic calculation about our future prospects.

Objections

There are standard objections raised to some, or all, of the above. None of them affect, or will affect, actual facts on the ground.

• “Exclusivity is their thing! That’s why they’re prestigious! If we open them up to much they lose all their value!” Putting aside the argument that admitting more students (particularly disadvantaged students) would devalue these institutions, this objection is a non-response. Non-elites are not going to stop wanting to join the elite just because one raises this as an objection.
• “You shouldn’t work at places like that. They’re probably terrible” is another non-response. Desirable jobs are desirable for a reason, and “their filters are too strict and probably reflect a bad culture” is not going to dissuade people from wanting to work at those organizations.
• “I got a great education at Some U. No one needs an elite school. It’s all hype.” This objection is predicated on an incomplete understanding of what elite schools confer; it rests solely on the idea of human capital development being the important property of an education. This objection ignores the significant resource advantages elite schools bring to bear, the networking advantages, cultural transfer, and systematic biases in favor of elite school graduates that I’ve described.
• “What matters is intelligence, autodidactism/willingness to learn, being widely read, hard skills, and the elements enumerated in the Character Hypothesis (things like grit, persistence, ability to delay gratification, etc.)” This one has considerably more merit than the “Some U” objection, as these qualities do allow one to “hack around” some of the structural disadvantages of not having an elite school degree (or in some cases, not having a degree at all), but also underweights the advantages just as the previous objection does.
• “We should obviate the whole thing by fixing some other thing (like inequality, etc.)” is an argument that has a good deal going for it, and I agree completely that many of those things should be done, but as long as we have a competitive society with a shrinking number of non-cognitive jobs / growing number of cognitive jobs, none of this goes away. We should do all we can to ameliorate the effects of not being on the better-off side of the divide (GBI, UHC, you name it), but cannot eliminate this as an issue. Liberal meritocrats have many blindspots and hypocrisies, but they understand the desire for elite status. (Even highly egalitarian Germany has elite schools.)
• “I went to an elite school / have hired elite school grads. It / they are not all that” is not a very good response. As shown above, top companies employ, and are often run by, people from elite schools. In addition, this objection ignores the signaling theory, and the “hidden advantages” completely. You can argue (and Hayes does in Twilight of the Elites) that our elite school admission system ignores or is systematically biased against the intelligent and underprivileged (which I wholeheartedly agree with) and that legacy admissions distort campus makeups, but neither of those change the advantages of going.

Closing thoughts

If some of us seem envious of those who’ve had the privilege of attending an elite school (particularly if they did so without going into [much] debt), it’s because we are. We understand well the advantages conferred by attending these institutions, and we wish we had them, too. We understand that our competitive society is only getting more competitive, and that we need every tool at our disposal to stay in the game. Some of us even understand, can perform, and even have an affinity for the few non-odious parts of elite, liberal meritocratic culture. I think it’s unlikely that we’re going to just shut up about it.