Making serious amounts of money after graduation is a typical goal at Penn. It’s the answer to “Why are you interested in that class?”, “What do you plan to do after college?” and, most of all, “Why did you come to Penn?” Unfortunately for all these students looking for a life of riches, they can’t expect much support from economists for this belief, despite how it is taken for granted in the halls of this institution.
Still, I can’t blame the students too much for viewing Penn as a pathway to financial success; this myth is parroted repeatedly by media outlets, especially U.S. News & World Report. Despite all the hits to its ranking machine for law schools and medical schools, it still found the time to produce a song of praise to the prestige of the Ivy Leagues. Not only that, the Daily Pennsylvanian picked up on this same story, stripping it of what little nuance was in the original.
To understand what’s wrong with these articles, it’s important to first look at the actual economic research about the value of going to prestigious colleges. The crown jewel of this is Krueger and Dale (2011). This paper takes a look at a vast body of data about how much students earned based on where they received their undergraduate degree from and concludes that there is no monetary benefit for the average student in receiving a degree from a university like Penn. In other words, a student who turns down Penn, or even didn’t get in, isn’t going to earn less because of that decision.
The study also has a caveat: prestigious schools matter more for Black and Hispanic students, as well as for students whose parents had less formal education. Furthermore, there’s room to quibble with how well-regarded the so-called less prestigious colleges, such as Penn State, in the sample are. Even so, the takeaway for many Penn students should be earth-shattering: all the Penn diplomas in the world can’t assure somebody enters the world of the super-rich.
Instead, Penn students are fed a contrary stream of information from everywhere around them. For instance, that U.S. News & World Report story spends the middle of the piece with Georgetown’s Jeff Strohl, discussing the exact same paper that I summarized earlier. Still, instead of trying to rebut the extensive evidence against its main point, it switches back to an overly optimistic message about how students who go to Penn and its ilk earn more.
The DP, unfortunately, does no better and somewhat worse than the U.S. News & World Report. Strohl’s critique of the money mythos is cut down to some of his less damning quotes. In a greater disappointment to me, the story cites only Krueger and Dale’s conclusion that going to a school like Penn benefits “students from disadvantaged backgrounds.” This is more or less factual (although there’s no benefit to schools like Penn for women, despite the gender pay gap) but misses the main point of the study.
The solution to this ever-present belief of Penn as a route to money is two-fold. To start, students at Penn should pay less attention to the über-hyped US News & World Report ranking and more attention to rankings like Washington Monthly. In contrast with the prevailing money-mania, this ranking, which, for the record, rates Penn quite highly, instead tries to measure social mobility — i.e., how much a given college helps students from poorer backgrounds earn more. This is far from perfect, but it’s an improvement in terms of thinking about money in ways that actually matter more for people.
This should also remind Penn students to reflect on whether they really should buy in to Penn’s get-rich-quick mentality. Net worth isn’t a perfect measure of happiness, and it’s certainly not a perfect measure of making a difference in the world. Obviously, there is an extent to which earning enough to live on actually matters, but it’s not the difference between entering the 1% from a job with Goldman Sachs and a more normal post-college career. Instead, students should take the time to reflect on what they can find, besides a stack of cash, with the advantages of a Penn education.
BENJAMIN McAVOY-BICKFORD is a College first year from Chapel Hill, NC. His e-mail is bmcavoyb@sas.upenn.edu.
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