Is college all about the money? Really?

The College Scorecard championed by the Obama administration has had generated some interesting commentary. Of course, the data is about US colleges and US graduate earnings, so we’re not comparing apples with oranges for drawing any lessons for the New Zealand situation, but it is interesting data nonetheless.

The NYT article points out how you can conflate college attended with other factors like innate intelligence and work ethic, which is problematic because if you have a pool of talented high school students applying for spots at selective universities then in the case of the US you get very talented pools of graduates coming from predominantly high socio-economic backgrounds. There is some implication that they were always going to be economically successful – see studies that look at father’s earnings etc for a broader review.

The obsession with college rankings and graduates’ earnings “is just the most recent example of a larger phenomenon, which is that the gathering of numerical information acts as a kind of wish fulfillment,” Professor Muller said. “If you have enough metrics and benchmarks, somehow people believe that’s going to solve a major problem. It rarely does.”

But the selection of what college to attend is merely the first hurdle for students from poorer backgrounds in achieving some level of social mobility. In the excellent book “Pedigree”, Lauren Rivera points out how the highest paying jobs out of college predominantly hire students who have similar socio-economic backgrounds. It’s practically inevitable because of the way different hiring systems are set up to function.

This means that even if all of the data in the world is available to the high future-time orientation high school student whose parents are also aware of all of these factors and how they affect lifetime earnings, there are still many myths and misconceptions around the less transparent ways in which desirable jobs are allocated after completing your degree or during your degree in the form of work experience, internships, scholarships or part-time work.

Perhaps people who care about these sorts of issues could explore this issue in more detail. Take the lifetime earnings of Harvard graduates for example – if the pool the undergraduates are coming from is predominantly from a wealthy background, is it really surprising that higher lifetime earnings will arise in aggregate for the graduating class but not necessarily on an individual basis? There has been a lot of work about how students from poorer backgrounds don’t apply to colleges that would give them almost 100% a free ride on financial aid because no one in their entire social circle or any of their high school advisers even understands how the most elite universities award financial aid!