Until recently, economists believed Ivy League colleges weren’t necessarily worth the price tag, in terms of the additional income their graduates earn. A seminal report in 2002 found that good students at non-Ivy League colleges went on to earn on average the same salaries as students who graduated from the “Ivy plus schools”—the eight Ivy League schools plus Stanford, MIT, Duke, and the University of Chicago.
However, a report released Monday re-examines the value of an Ivy League education, factoring in prestige and career achievement. Conducted by researchers from Harvard and Brown, the study finds that while an Ivy League degree may not always result in higher earnings than other schools, it improves a graduate’s chances of getting into a prestigious firm or eventually becoming a power player in their industry.
The study surveyed over 2 million students from Ivy Plus schools and state schools, and compared students who were similar based on their GPAs, test scores, and nonacademic credentials. For people with similar academic and extracurricular achievement, they determined that an Ivy Plus student’s chance of getting hired by an elite firm was 17.6 percentage points higher than if they had a state school degree.
“Do you become a highly paid professional at a very good company? For those kind of outcomes, the school you go to matters a little but not a ton,” Raj Chetty, a Harvard economist who co-authored the study, told the Wall Street Journal. “Where it matters enormously is reaching the upper tail, the path to becoming a CEO, leading scientist at a top graduate school, political leader.”
For example, 25% of U.S. senators attended Ivy Plus schools, and eight of the nine Supreme Court justices attended the Ivy League. Some of this may be attributed to the schools’ reputation of prestige influencing hiring, but also their powerful alumni networks and the mentorship of top professors.
It’s important to note that the nation’s top schools are disproportionately populated with the children of the wealthiest and most powerful families. The same study also found that children who were already in the top 1% had over double the chance of getting into Ivy Plus schools than those from the middle class, with comparable credentials.
The Ivy League, according to the study, perpetuates privilege that’s not necessarily earned, as its name brand gives its alums a noticeable boost compared to their equally qualified peers from non-elite institutions. In addition to helping get its students into top firms, the Ivy League boosts its graduates’ chances of admission to elite graduate schools by 5.5 percentage points.
So while the schools’ hefty price tags—Harvard’s annual tuition and fees are $79,000 annually, and Stanford’s are $82,000—don’t translate into higher salaries, they’re an investment in social cachet that opens guarded doors. Students can become wealthy and ascend the professional ladder coming out of any college, but elite institutions allow their graduates to hop over a few rungs.