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$3,000 lifts a family's income fivefold
Smart kids on farms
India has more than a billion people, and many of the very intelligent ones live in rural areas with no access to good education or a pathway to better their lives. Most of them end up on a farm. Monish Pabrai, an investor who likes single-player number games, wanted to find where a philanthropic dollar produces the highest economic return in impact anywhere.
The math schools
His answer was to find the smart kids and put them in competitive math schools that prepare them for the Indian Institutes of Technology. Those institutes feed graduates into some of the best jobs in the world and let them get visas. They are harder to get into than any US college.
The fivefold jump
For a family, one year of that training costing about $3,000 can raise earning power from $10,000 a year to $50,000, a fivefold jump that continues year after year.
Why are the IITs so hard to get into?
Admission to the Indian Institutes of Technology runs through the Joint Entrance Examination, which more than a million students sit each year. Only a small fraction of them earn a seat. The first IIT opened at Kharagpur in 1951, and the government built more across the country in the decades after. A competitive coaching industry grew up around the exam, especially in the city of Kota.
Why does so much talent go unnoticed?
Economist Raj Chetty and his coauthors studied patent records and tax data in a 2019 paper. They found that children from families in the top 1 percent of income were about ten times as likely to become inventors as children from families below the median, even when their math scores in third grade were the same. They called the missing inventors lost Einsteins. Access to schools, role models, and networks, rather than ability, explained most of the gap.
How do IIT graduates reach jobs abroad?
Graduates of the IITs are recruited by technology and finance firms in India and overseas, and many have gone on to graduate programs at American universities. Visa pathways such as the US H-1B program sponsor skilled workers with specialized degrees. Alumni networks then make it easier for later graduates to find roles and sponsors. Several leaders of major technology companies are IIT graduates.
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