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Same pay at 40, Harvard or not
Why Ivy grads look better
Kids who attend Ivy League schools do look better on money and status. They also come from far wealthier families and cared about status and money to begin with, which is part of why they went there. Comparing them with students at the local college mixes the school's effect with everything that came before it.
What matched pairs show
Controlled studies pull those apart. They hold economic class and innate ability steady as well as they can, creating matched pairs where one attends Harvard or its equivalent and the other attends the local state college. By 40, the two earn the same amount.
Harvard has an edge at the recruitment stage. The lesser school has its own, the big fish in a little pond effect: students stand out, collect great recommendations, and get invited by a professor into the laboratory.
Happiness
Nobody has shown that the prestigious school makes people happier, either. Measured by whether someone is happy, content, and comfortable in their own skin, there is no benefit to the more expensive college.
How do researchers compare Ivy students fairly?
In a study published in 2002, economists Stacy Dale and Alan Krueger compared students who were admitted to highly selective colleges with students who applied to similar schools and were admitted but chose a less selective one. The comparison was built so that the two groups started out alike in ambition and ability. Their earnings later in life came out similar.
What is the big fish little pond effect?
Psychologist Herbert Marsh, who named the effect in the 1980s, found that equally able students rate their own academic ability higher when they study among less accomplished peers. In a school full of top performers, the same student ranks near the middle and judges themselves more harshly. Marsh and later researchers have documented this pattern in dozens of countries.
Why do employers still value elite degrees?
Economist Michael Spence described job-market signaling in a 1973 paper, which later helped earn him a Nobel Prize in 2001. In his model, a credential tells an employer something about a candidate when the employer cannot observe ability directly. An admissions office that rejects most applicants does part of the sorting before a student ever applies for a job.
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