The Ivy League elite of America

The Ivy League elite of America

The Impact of Highly Selective Colleges on American Students

The ruling by America’s Supreme Court in June that, in effect, banned universities from using racial preferences in admissions sparked two lively debates. Although the argument over the decision representing an advance or a setback for equality of opportunity gained more attention, another intriguing debate arose – whether the admissions decisions of a handful of selective institutions deserve so much attention in the first place.

The Select Few and the Majority

Just 6% of American undergraduates attend colleges that accept less than a quarter of their applicants, leaving the vast majority unaffected. Moreover, most academic analyses of the socioeconomic impact of a bachelor’s degree from highly selective colleges have failed to quantify just what it is that they add. Although these universities’ alumni do have unusually high incomes after leaving college, they also had unusually strong high-school qualifications before they went.

One study, conducted by Stacy Dale and Alan Krueger of Princeton, found that those who attend higher-ranked universities do not, on average, wind up earning more money than those who go to lower-ranked ones. This suggests that institutions like Harvard and Yale do not actually improve their students’ earning prospects, but instead admit bright, ambitious applicants who are destined for success regardless of which college they attend.

However, a working paper by Raj Chetty and David Deming of Harvard, along with John Friedman of Brown University, released on July 24th, refutes this interpretation. They linked data on tax returns, tuition subsidies, standardized test scores, and universities’ internal admissions records, tracking the lives of 2.4 million students who applied to top colleges between 2001 and 2015, from high school to their early 30s. The researchers’ findings suggest that pupils have good reason to burnish their résumés in the hope of securing admission to highly selective colleges because they are the most surefire route into America’s economic and professional elite.

The Elitist Bias

The study focused on three groups of universities: “Ivy-plus,” consisting of the eight members of the Ivy League (including Harvard, Yale, and Princeton) plus Duke, the University of Chicago, Stanford, and MIT; “other highly selective private colleges,” such as Caltech and New York University, and “highly selective flagship public colleges,” like the University of California, Berkeley, and the University of Michigan.

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Simple data on the number of Ivy-plus alumni who reach positions of unusual wealth or power highlight that graduates of these universities exercise an influence that is vastly disproportionate to their small numbers. Since 1967, two-thirds of Supreme Court justices have been Ivy-plus alumni. Ivy-plus alumni also represent 12% of current ANBLE 500 CEOs and a quarter of sitting senators.

The challenge lies in separating the effect of attending these colleges from the selection effects that attract the cleverest applicants. The new study presents various ways to address this, with one particularly ingenious method involving examining the 10% of Ivy-plus applicants who were wait-listed—those who admissions offices neither thought were strong enough to admit outright nor weak enough to reject. Of these wait-listed students, 3.3% eventually gain admission.

The authors note that while selective colleges tend to reach the same decision (acceptance or rejection) about students who apply to more than one of them, there is no such correlation for wait-listed students. Those who get in via a wait-list are no more likely to be accepted by other colleges than those who are rejected. This implies that all wait-listed applicants at a given college are equally strong, and comparing the outcomes of those who get in and those who do not provides a natural experiment.

When examining average earnings, this approach confirms that Ivy-plus attendance does not seem to make much of a difference. However, this broad average disguises a significant difference at the upper “tail” of the distribution: the most successful subset of Ivy-plus alumni fare far better than the most successful graduates of other colleges. Among wait-listed students with similar test scores and similar parents’ incomes, those who attended Ivy-plus universities were 60% more likely to be in the top 1% of earners by age 33 than those who attended leading public universities. Furthermore, they were three times as likely to work for “prestigious” but not necessarily high-paying employers, such as highly ranked hospitals.

The Preferential Treatment

If Ivy-plus universities indeed improve their students’ chances of reaching the pinnacle of professional success, then their admissions criteria merit close scrutiny. The study’s second central finding is that three factors heavily weighted by admissions offices bias decisions in favor of applicants whose prospects for post-college success are relatively weak but have extremely wealthy parents.

Students whose parents earn more than 95% of Americans are no more likely than the average student with the same test scores to attend an Ivy-plus college. In contrast, those at the 99th percentile of family income are nearly twice as likely to go to one, and those in the top 0.1% three times as likely. If admissions were solely based on test scores, 7% of students at Ivy-plus colleges would come from families in the top 1% of the income distribution. In reality, this share is 16%, approximately similar to the effect of racial preferences for African-Americans and Hispanics.

While not all the responsibility lies with admissions offices, students from the richest families are unusually likely to apply to Ivy-plus schools and enroll if accepted. Out of the total nine-percentage-point difference, around six points occur because such applicants are unusually likely to be admitted.

The primary advantage lies in the preference given to legacies. On average, children of alumni are four times likelier to get into an Ivy-plus college than non-legacies with equivalent academic records. Legacies are no more likely to get into Ivy-plus colleges that their parents did not attend. Nearly 15% of Ivy-plus applicants from the wealthiest 0.1% of families are legacies.

Wealthy families also benefit from the selective colleges’ emphasis on fielding teams in dozens of sports, many of which are upper-class pastimes like rowing or lacrosse. Just 5% of Ivy-plus students whose parents are in the bottom 60% of the income distribution are recruited athletes. Among those from the richest 1% of households, this share is 13%.

The study also identifies a third, less well-known variable that benefits the wealthy: non-academic ratings. These scores measure extracurricular activities like theater, debating, or writing for student newspapers, which are most common at private schools attended by privileged children. Among applicants with equivalent test scores, admissions offices assign significantly higher non-academic ratings to students from families in the top 1% of income. Students from non-religious private schools are twice as likely to be accepted to Ivy-plus universities as students from good state schools with similar academic qualifications.

Private colleges have the right to select applicants based on any lawful criteria. They may view a class with strong family ties to the university, a varied range of intercollegiate sports, and numerous students with strong extracurricular accomplishments as preferable to one solely composed of the most academically qualified applicants. Although the fact that all three of these factors boost attendance by students whose parents are most capable of making large donations could be an unintended benefit, these preferences affect American society as a whole and not just perpetuate inequality.

The study’s analysis of wait-listed applicants found that, after considering academic qualifications, parental incomes, and demographic factors, Ivy-plus graduates who were legacies had a worse chance of reaching the top 1% of the income distribution than those who were not legacies. The same applied to their odds of attending elite graduate schools or working for prestigious employers, as well as for athletes and students with high non-academic ratings.

However, students who benefited from these preferences still had better odds of achieving these measures of professional success than similarly qualified and privileged students who did not attend an Ivy-plus school. In other words, these universities are channeling comparatively underqualified legacies, athletes, and private-school graduates into positions of unusual influence. A greater emphasis on academic merit would yield not only a fairer society but also a brighter elite.

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Source: “Diversifying Society’s Leaders? The Causal Effects of Admission to Highly Selective Private Colleges”, by Raj Chetty, David Deming, and John Friedman, working paper, 2023