How much are elite universities worth?

Will you do better if you attend a selective college?

If you are Caucasian (white) and from a middle class or better background… you will not: “Our estimates of the return to college selectivity (…) are generally indistinguishable from zero” (Dale and Krueger, 2014)

It is important to keep the facts straight. Kids who attend college, especially elite colleges, tend to have an excellent background and to be quite smart. So we know that they will do well. But they won’t do better if they have the name of an elite college on their resume. Having the ambition and the grades to get into an elite school is enough.

Further reading: What Is an Elite College Really Worth?

4 thoughts on “How much are elite universities worth?”

  1. Not quite what they say: “We find that the return to college selectivity is sizeable for both cohorts in regression models that control for variables commonly observed by researchers, such as student high school GPA and SAT scores. However, when we adjust for unobserved student ability by controlling for the average SAT score of the colleges that students applied to, our estimates of the return to college selectivity fall substantially and are generally indistinguishable from zero.” So, another possible conclusion is that adjusting for unobserved characteristics is pretty darn tricky, and easy to get wrong.

    1. @Antonio

      Let me rephrase their result in simpler terms.

      If you have two students with great grades that both applied to a top school and to a local state school… but one went to the top school whereas the other one went to a local state school… they will both end up with the same financial outcome in statistical terms.

      1. This has been a point of discussion for a while. A top college can provide better opportunities in terms of startups, companies that are spun off etc (e.g. Google out of Stanford and many others) which might increase one’s financial outcome tremendously if the startup is successful. So, if the top student got stuck in the local state away from all the opportunities, then he can have a disadvantage over the other one.

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