The paper, by Stacy Dale of Mathematica Policy Research and Alan B. Krueger of Princeton University, builds upon an earlier study of theirs that suggested, about 20 years ago, that graduating from an elite college (versus a less prestigious institution) doesn’t significantly improve your earning potential in the course of your career. A potentially disturbing thought for those of us still paying interest on student loans for private college educations.
This more recent paper digs into that hypothesis further and with better data, and emerges with a subtle yet fascinating result.
Discrepancies in income can almost entirely be explained by the colleges you applied to, rather than by the one you graduate from. That is, all else being equal (in this case, controlling for SAT scores), if you apply to a selective institution and end up being rejected, your future earning potential should be no different from that of someone who actually graduated from that more prestigious institution.
The likely reason for this is that the key determining factor in success (in this case financial success), more than anything else, is ambition. If you are the sort of person who applies to an elite school, whether or not you get in, you are likely to be successful in the future.
As Mr Krueger told The New York Times, “Even applying to a school, even if you get rejected, says a lot about you.”
Not that we would ever advocate measuring your success in financial metrics alone. Career success can come in several forms, even at the expense of monetary income.
However, we do think that this paper has a great message for anyone applying to selective school programs, MBA or otherwise: that win or lose, accepted or rejected, the fact that you tried and aimed high already means that the future has good things in store for you.
And that’s a good reason to be cheerful!