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August 03, 2006

Comments

Actually, I'd qualify your conclusion and note that a *well-chosen* degree is an excellent investment. I'm also curious whether the returns to the 'investment' that are calculated for tuition include the opportunity cost of attending college...

One possibility: a higher percentage of the students who attend top-rated colleges come from affluent, well-connected families, and these connections are what lead to career success.

Don't confuse average results with individual ones. Anyone can go to a lesser ranked college, or not go to college at all, and do very well. Still, the expected value for the higher-ranked college degree makes it a good investment.

BTW, with regard to the relationship between SAT scores (presumably a proxy for IQ or g) and income. I suspect that a lot of higher-IQ people are relatively high systematizers and have relatively low empathy. In order to be successful financially, you need to market your ideas and/or products, and work effectively with a team to make things happen. So the people who have a higher empathy level will do better on the business side, and they make more money than pure product guys (typically).

I dont think the affluent, well-connectedness is the prime thing here; though, no doubt, thats a factor too. After all, whats the liklihood that daddy knows of my ideal job, in my field etc.
My view is that the Ivys open a door to the first great job; and thats prob the most important step - after that, you you're "in", so to speak. Noteworthy too is the fact the most paths of study are largely irrelevant to your career. Even in business oriented courses, its really the on the job training thats key. So, when you've got thousands upon thousands of students who can do the job, better to stay safe and go with school rankings. The schooling is just the signal.

Whats more, many students who attend these schools either get some kind of gov aid (either directly via state schools like Berkeley, or via gov loans, the NSF etc). My view is that state sponsorship for schools like this is a de facto subsidy to business; namely, since it makes their recruiting job far, far easier. This coupled with the fact that the middle class attend college makes the entire thing highly regressive.

I think my failure to take typing in high school ruined me.

Berg & Krueger have a more recent version of the paper in QJE:

http://www.davidson.edu/academic/economics/foley/324/Berg%20Dale_Krueger%20QJE%20(2002).pdf

It seems to be somewhat different in its conclusions. They don't seem to report the effects of the Barron's categories directly, but it sounds like they don't find an effect anymore. Higher tuition of the college does have an effect on future income.

Huh? Shouldn't this post be qualified by stating that the value of the degrees depends greatly on major as previous posts have pointed out. Without that preface, the conclusion drawn from post is misleading.

HS gets $65/hr doing ASP.NET not because he went to the "right school". There are plenty of people with Harvard degrees that don't make that kind of money.

There are two problem here.

1) Most people are ordinary. They lack the edge to distiguish themselves from the rest of the pack. This is a sorting problem that is solved by prestigiuos degrees but it does not apply to (A) famous people who have proven themselves in their field. (B) True talent.

If HS was the lawyer who successfully handle multiple history making cases, chances are that he gets a shot at securing a tenure professorship sometimes down the road at Harvard Law even if he graduated from Arizona State. The fame will get him in the door, and the talent lets him keep the job.

The truly talent is too hard to ignore. If you can consistantly throw a baseball at 110 mph, some major league scout will find you. If you know how prove the unified theory, Stanford/MIT/etc will hire you as full professor even if you never finished high school.

2) Most jobs are ordinary. They don't need the super high IQ employees because they don't add any value to the job. Perception is that many of these high IQ people think too highly of themselves and is hard to work with. Would you want a employee who constantly look down at you?

I think that people like to believe talent is more natural and inevitable than it really is. I call this the "Good Will Hunting" fallacy. In reality, whoever proves unified field theory will not only have graduated from an extremely good high school and college, his father and grandfather will have taught at MIT.

Most people with natural talent never refine it sufficiently to meet their potential because they lack the resources and guidance. A big part of becoming excellent is consistently observing excellence up close, IMHO.

tc, thanks for the link, it seems that the newer verion of the paper is the older version of the paper with the finding inconsistent with what everyone wanted to read about were removed.

To everyone else who brings up college major, yes, I'm in complete agreement that major is extremely important.

I think this only applies to people who got in on merit. I got into Reed College for (geographic) diversity. I was not smart enough or hard-working enough for the school. I did take a serious major, chem, and then switched to biochem, and then failed out. After a few years of feeling too stupid to return to school, I went to a local, not-highly-rated-at-all school. Maybe only because I was more serious about school than my first try, I definately stood out more and had more opportunities than Reedies smarter than me, because they didn't stand out.

On SAT and income, maybe people are trading money for fulfillment?

HS,

I think "fit" is more important that you think. I will give you a case study.

A kid from suburban DC has 1400 on his SAT and good grades. The kid wants to go to medical school. The kid could apply for Georgetown and possibly get in. The kid will be in bottom half of his class and attending a school where over half the freshmen attended private schools. The kid will probably pay full tuition and probably not finish with a degree in science and could be on of the 10% who drop out instead of the 4% of Georgetown students who go to medical school.

http://www.princetonreview.com/college/research/profiles/admissions.asp?listing=1023791&ltid=1&intbucketid=

The same kid can easily be admitted to George Mason and probably get a Presidential Scholarship (free tuition and fees), get access to more professors and fewer TA's, special dorm space, and have a built in path to Virginia College of Medicine.
http://www.gmu.edu/departments/usp/vcumedicine.php

You would tell the kid to jump at
Georgetown University because of the name and probably finish with a degree in international studies and a huge debt load. I would tell the kid to take the George Mason deal and come out of college debt free and with admission to medical school.

"I would tell the kid to take the George Mason deal and come out of college debt free and with admission to medical school."

Med school's kind of a weird example due to the relatively high value of a nonprestigious medical degree. (compared to, say, law or business).

I would tell the kid to take the George Mason route aswell. Something happens psychologically to people when they are in the bottom of their class no matter how hard they try. They become lazy because the reward is out of reach.

Med school's kind of a weird example due to the relatively high value of a nonprestigious medical degree. (compared to, say, law or business).

It's not that weird of an example. School prestige is relatively unimportant for fields with good job opportunities - pharmacy, electrical engineering, nursing, special-education teaching, and I'm sure many others. School prestige is vitally important in law not because of anything unusual about law school, but for the simple reason that it's a glutted field.

Business school is hard to categorize because many MBA students are somewhat older people with post-college work experience, often attending on a part-time basis while working, rather than 21- or 22-year-olds who go straight through from college.


Notice that, with the exception of medicine, the non-glutted fields cited by Peter tend to be less presigious.

"the relatively high value of a nonprestigious medical degree": fasacinating, this may be international. I've heard my daughter's friends discussing universities in Britain. For the Humanities, you should go to Oxford or Cambridge - not just more prestige, but far higher standards and more work expected - but for medicine it matters much less - all medical schools are viewed as pretty good, with high standards.

Notice that, with the exception of medicine, the non-glutted fields cited by Peter tend to be less presigious.

Does it matter? I'd rather make $60K as a "low prestige" nurse or pharmacist than $30K as a "high prestige" journalist.

"Does it matter?"

Just an interesting observation. It surely matters to all the people who eschew practical lower prestige college majors.

Half Sigma: In the 2002 version of the Krueger/Dale paper which tc linked to, the authors state that "the effect on earnings of the average SAT score of the school the student attended is indistinguishable from zero" (top of p. 21 of the .pdf file). They sure seems to be endorsing the popular interpretation of their paper which you criticize. Also, see their conclusion on p. 33 of the .pdf file.

How do you respond?

(BTW, the link to the original paper in your original post did not work for me.)

"the effect on earnings of the average SAT score of the school the student attended is indistinguishable from zero"

Yup, that's exactly what HS said! SAT score doesn't matter, prestige does. If Harvard's SAT score dropped to 400 tomorrow, it would still be worth going there. Or, as in that old chestnut, it ain't what you know, it's who you know.

I wonder how "nonlinear" the effects are. I can understand why everyone would want to go to Harvard if possible, but how many other places have as big a "name" as Harvard? Maybe a good state school would be comparable to a not-quite Ivy League private school.

SFG: But see p. 19 (2nd full paragraph of 2002 version), where the authors use the Barron's selectivity criteria. This paragraph is dense and not clearly written but it indicates to me that selectivity rankings different from SAT scores does not affect the result or the conclusion.

tc: good question. I don't like the constant references to Harvard either. Let's start using Haverford instead.

Jult52

http://www.princetonreview.com/college/research/profiles/extracurriculars.asp?listing=1023306&ltid=1&intbucketid=

I looked up Haverford. 80% graduation rate (I guess 20% did not fit), top majors are History and English but only 3% to Law School. No real science, technology, or engineering. Looks like about a 1400 SAT score school. Tuition at $31,000 and also has no greek organizations. Looks like the kind of place that political interns come from but does not seem the place to become BIGLAW or InvestB. Might be the place if you want to become a college professor down the road or a Wonk.

However, I would tell virtually anyone to not major in history or english at a state university unless they are going into private school teaching.

Peter, one quibble: A "high prestige journalist", like say an NYT reporter, makes more than $60K. There just aren't many of them. The people in those jobs went to either Ivies, or non-Ivy Eastern and midwestern private schools known for J-programs, like Northwestern. The $30k reporters, the unwashed 95 percent, did not.

Whether it's a glutted field depends where you come from. The Ivy person has a good shot at that top 5 percent; the Podunk State person, virtually none. Only the Podunk State student is better off in nursing or K-12 teaching. Assuming equal pay, most people would prefer NYT reporting.

I looked up Haverford. 80% graduation rate (I guess 20% did not fit), top majors are History and English but only 3% to Law School. No real science, technology, or engineering. Looks like about a 1400 SAT score school. Tuition at $31,000 and also has no greek organizations. Looks like the kind of place that political interns come from but does not seem the place to become BIGLAW or InvestB. Might be the place if you want to become a college professor down the road or a Wonk.

The college where I attended, Trinity in Connecticut, was similar to Haverford in many respects. It has long been popular among pre-meds, despite its reputation as a liberal arts college and the absence of a formal pre-med program. Medical school admissions committees supposedly look favorably upon applicants from smaller liberal arts college. In fact, as of about 15 years ago - I have no idea if it's changed - Trinity had a higher medical school acceptance rate than Yale!
It wouldn't surprise me, therefore, if Haverford attracts a number of pre-meds. Note that most colleges will offer enough science courses to satisfy pre-med requirements even if they're not science-oriented institutions.

peter,

Pharmacist can easily make much more than $60K. Starting pay at Wal-Greens, Rite-Aid, CVS would probably start around $80K and if you are willing to live in a small town (the $30K journalist kind of town), a pharmacist can make over $100K.

Nurses can also make much more by specializing into things likeNurse Anesthesist and make $100K.

I think the problem with comparing careers is that some careers have a normal distribution of wages (nurses, pharmacist, engineers) and some career fields (lawyers, journalist( have a log-normal distribution of wages. A full time pharmacist is never going to make millions but they can all find work and the pay is good without being great. A lawyer can make millions but many never find work and many do not make that much.

"The Ivy person has a good shot at that top 5 percent; the Podunk State person, virtually none."

Because of an optimism bias, 90% of students think they're going to make the top 5% of their chosen profession.

Optimism, outdated information, unrealistic fictional portrayals, and flat-out lying by professors and flaks who profit off misguiding the young.

I think the problem with comparing careers is that some careers have a normal distribution of wages (nurses, pharmacist, engineers) and some career fields (lawyers, journalist( have a log-normal distribution of wages. A full time pharmacist is never going to make millions but they can all find work and the pay is good without being great. A lawyer can make millions but many never find work and many do not make that much.

Which brings up the question of why the careers with normal wage distributions aren't considered as prestigious as those with log-normal distributions. My guess is that people who choose the former type are seen as playing it safe, unwilling to take risks, while those who go into log-normal careers are admired for their courage. Of course, it's also likely that many people don't realize just how risky high-prestiage careers can be, for example there's still a popular perception that going to law school is a sure ticket to affluence.

Optimism, outdated information, unrealistic fictional portrayals, and flat-out lying by professors and flaks who profit off misguiding the young.

Hmmm, how about a realistic fictional portrayal ... here's a idea, let's have a TV series about some poor schmuck who's five years out of (a nonprestigious) law school and is trying desparately to eke out a lower-middle-class living while paying off student loans that'll choke an elephant? Somehow, I don't think the TV networks will be interested.

*tsk* Peter, I wasn't clamoring for shows about the dreary, homely and poor. Just pointing out that American fiction confuses kids by portraying people who start in a disadvantaged position, and work their way up to the big time. Makes for a comforting backstory. But in real life, the successful Madison Avenue exec does not have coal-miner parents, or even government worker parents, and we should not give their kids the idea that if they study hard, behave, and are plucky, they can take Manhattan. Or even live in Manhattan.

The unwritten rule in reporting is that every personality profile must include something a successful person "overcame." Sometimes the contortions are painful, but it's what people want to hear. To the point where Bill Gates gets held up as an example of an underdog dropout near-loser who turned his life around. No wonder there's an optimism bias.

Peter, many people don't even know about the good jobs with normal wage distribution, unless someone in their family does it. I had no idea how much pharmacists make.

Most people don't think of law as risky at all, but a stable boring way to make money. Most people don't even think of journalism as risky, just as vaguely lower-paid until you "work your way up."

The main reason people don't want to be nurses or special ed teachers is probably not lack of prestige, but not everyone has what it takes to care for the sick or troubled.

I also suspect guidance counselors and schoolteachers are a big part of the problem, because kids get their career ideas from them. They only know about a handful of jobs (mainly the "helping professions"), except what they see on TV, and nothing about business.

The optimal SAT is 1100?? This score is way too low for Ivies, unless you are a stud hockey or football player, and likely even then. If Ivy League grads make more than state school grads, shouldn't the optimal SAT be like 1400? Almost no one goes to an Ivy with an 1100, or even a 1250. Although if the 1100 is before recentering, it could be similar to an 1150-1200 now. As a high-IQ person in a job which I am overly bright for, I am curious what kind of jobs HS would recommend for the very bright. I was thinking law, but, well, you know...

nobody,
Most jobs are ordinary. They don't need the super high IQ employees because they don't add any value to the job.

In almost all jobs, IQ predicts performance better than anything else, often better than tests designed for the job. Of course there are diminishing returns.

"As a high-IQ person in a job which I am overly bright for, I am curious what kind of jobs HS would recommend for the very bright. I was thinking law, but, well, you know..."

Study hard for the LSAT and see where you get in. If it is not a top 14 law school, don't go.

If you don't mind working really hard for 10 years, you could try for medical school.

There is the personality issue, which hits you at the point of med school admissions and (I assume) law firm job interviewss. I was unable to get into a top-tier med school despite being junior phi beta kappa from an ivy, but did get into a mediocre one. I then worked hard again, got AOA (the med school equiv. of phi beta kappa...about top 15%, probably =coif), good medical board score, published a paper or two ...and wound up with a mediocre radiology residency!

But I'll still probably be able to pull $200K...if they don't ship my job to India. You could still try for anesthesia or one of the surgical subspecialties that are harder to outsource, you can crack 200K in one of those if you can sneak in. Something to think about. Good money, even if interviewing at Hopkins and winding up at a state school, TWICE, is kind of demoralizing.

If you are in fact charming, you might try for business, but be aware your high IQ is not going to get you anywhere.

I disagree strongly about high IQ not helping in business. It won't help you to get in, get customers, or stay in, but it will help you to recognize opportunities well, manage well, etc.

Half-Sigma: I'm hoping you'll get back to me on my very specific comments on the interpretation of the Dale/Krueger paper. The paper is dense and complicated but it looks to me like you've misinterpreted it.

Half-Sigma:

Apparently one of the people who misinterpreted the study was the author himself. Here's the opening bit of an article he wrote for the NYT in April, 2000, stating in quite clear terms exactly the popular impression that attribute to the media.

In fact, the accompanying chart in the Times actually shows that selecting a "Highly Selective" school over a "Moderately Selective" school results in an income PENALTY of $1,100.

What gives? Is Krueger misinterpreting his own study?

-Steve Clymer

http://partners.nytimes.com/library/financial/columns/042700grads-econoscene.html#offsite
=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+
New York Times April 27, 2000
Better Pay for a Better College? Not Really
By ALAN B. KRUEGER

Your son or daughter has just been accepted to both the University of Pennsylvania and to Penn State. The deadline for decision is May 1. Where should he or she go?

Many factors should be considered, of course, but lots of parents and students are particularly interested in the potential economic payoff from higher education. Until recently, there was a consensus among economists that students who attend more selective colleges -- ones with tougher admissions standards -- land better paying jobs as a result. Having smart, motivated classmates and a prestigious degree were thought to enhance learning and give students access to job networks.

But is it true?

A study that I conducted with Stacy Dale of the Andrew W. Mellon Foundation, "Estimating the Payoff to Attending a More Selective College" (available online at http:// papers.nber.org/), has unintentionally undermined this consensus.
[...]

In the NY Times article, he writes "College selectivity is based on the average College Board score of the freshman class."

He is cherry picking the means to determine the rating of the college in order to get the results that everyone wants to read about.

Half-Sigma:

1) You're ignoring the point I made in my Aug 4 12:50 post. Please respond. If I am right, you're misinterpreting the study.

2) Does anyone really believe that a college's prestige exists independent of the avg SAT score of its entering student?

So you do think the author is misinterpreting his own study! Interesting, I don't think so.

In fact, it appears to me that the study actually uses all sorts of convoluted syntax and selective emphasis to avoid the obvious conclusion detailed in the NYT article. For example, it highlights the advantage of selective schools for students with low parental income with no mention of the corresponding penalty that must exist for students with high parental income.

In any case, you can hardly fault the media for misinterpreting the study if the author is doing the same.

-Steve

I have to confess it could take me hours to figure out everything Krueger is talking about, but it seems relatively clear that in the later paper he simply left out the finding that prestige, independent of average SAT, is correlated with future earnings.

A person is better off going to a school with the same prestige but lower average SAT because that person will get higher class rank against easier competition.

And yes, bogus schools with high average SAT scores like Illinois Institute of Technology or Davidson College won't help you as much as a more prestigious school.

Why are they bogus schools? I've often thought that a school could climb crazy high by giving lots of very bright kids scholarships and forcing everyone to play sports.

Have any schools tried something like that?

I can't believe that many years after graduating from college and understanding that people take various paying jobs for a variety of reasons, you all are still arguing about colleges and SAT scores. There are so many fields to make good money in, outside of your obsession with credentialism, that I am having a hard time believing you live in the same country I do.

I also think you should resign from the Half Sigma Club. It might do you some good by lowering your hat size and perhaps put a dent in your aforementioned devotion to credentialism. Perhaps you should also get a substantive hobby, and interact with those whose talents are substantial, real, and unrecognized through standardized testing and college graduate programs, like musicians, singers, actors, painters, novelists and playrights, golfers, yachtsmen, etc. I think you get the picture.

Or you can continue to compare diplomas and 1978 SAT scores. Have a great week!

Li,

I believe that HS really started the credentialism idea when he lived in Washington, DC. If you look at Money Magazine's most educated cities, you find Arlington, Virginia at the top of the list. In a place like DC, if you do not have credentials, you cannot find a job.

Li: You're completely missing the point. A lot of readers are actively thinking about whether it's worth it to pay in excess of $40k annually for a "prestige degree" for their children. This paper from Krueger and Dale is a very interesting piece of evidence in this debate and is worth understanding correctly.

"Why are they bogus schools? I've often thought that a school could climb crazy high by giving lots of very bright kids scholarships and forcing everyone to play sports.
Have any schools tried something like that?"

Dunno about the sports, but as I recall the U of Chicago didn't engage in the anti-semitic quotas of the 20s and wound up with a lot of Nobel laureates and a steep decline in prestige.

Still, they're considered top-tier nowadays, so it must have kind of worked.

"interact with those whose talents are substantial, real, and unrecognized through standardized testing and college graduate programs, like musicians, singers, actors, painters, novelists and playrights, golfers, yachtsmen, etc."

Yeah, if I were in a position to hang with "yachtsmen" I might not give a hoot about inequality, either.

As for the rest, I know too damn many -- all parental leeches. Especially the "actors ... novelists and play[w]rights." Yeesh, they're what got me pissed in the first place.

Why is IIT a "bogus" school? Because people thing that you went to the India Institute of Technology when you say that you went to IIT?

I'm an IIT grad (the Illinois one). I might as well have gone to the one in India. All the students and most of the profs were Indian.

Still curious as to why IIT is "bogus". It is not a high prestige school, that's for sure. I got a graduate degree there because they have the best distance learning program I've found. It was easy to get a graduate degree in engineering from there.

By "easy", I mean "able to get a degree while working full time as an engineer at a private company". Not "easy", as in "easy". It was actually a lot of work and took me 5 years to complete, one course at a time.

IIT has a very high proportion of foreign students. I suspect that they all got 800 on the math portion of the SAT or GRE. The rest of the student population is commuters.

Most of those students would be better off if they lived with their parents for 4 years, earned $20,000/yr working full time (or more than full time), and investing the other $160,000. How many kids have a quarter of a million invested free and clear by the time they are 22? What if two of these intelligent types married, with $500,000 in the bank, and started having kids in their early 20's instead of spending the next 5-10 years in big city bars and late nights at the Oriface, trying to pay off their debts being taxed to death for the benefit of idiot minorities? How many have half a million by the time they are 42, or 52? Usually they start out at 22 with tens of thousands of dollars of debt, four years of ridiculous hoop jumping, interspersed with ridiculous irresponsibility that does little to make them responsible adults.

I know plenty of artistic types Spungen. I like them. I don't live like them, but of course, in order to miss the point that there are talents outside of passing standardized tests, you must focus on their lifestyles or bank accounts. Make sure that when you come home from work, you don't watch TV, listen to music, open a book, go to a movie, museum, etc. Just watch the grass grow.

Hey, in terms of making money, has anybody here ever heard of anyone starting their own business, rather than trying to out-credentialize the next guy and worm their way up a corporation or bureaucracy? You might start thinking about that, as your corporate credential-lovers outsource you into oblivion, and hire a bunch of minority idiots because the highly intelligent test takers don't have the balls to stop them. The timid Upper Crust of Cowards, all hoping to somehow run away rather than to organize and stand up. Myabe you learned that in college.

Li: "Most of those students would be better off if they lived with their parents for 4 years, earned $20,000/yr working full time (or more than full time), and investing the other $160,000."

It sounds nice, but I don't think they'd find a job paying $20K, and after taxes there'd be a lot less to invest.

Furthermore, there's a lot more money than that to be made by going into the right career track. Being able to earn $60K/yr instead of $20K/yr is worth a lot more than $250K.

"in terms of making money, has anybody here ever heard of anyone starting their own business"

It's not likely that many people without real work experience are going to be able to start successful businesses. Statistically most businesses fail.

Li,

Let's take the white kid (male or female) going to school in Credential rapid DC area. What kind of business should he start and what competitive advantage would that business have. The white kid cannot compete for government contracts because those are left for 8a contractors. The white kid cannot start a hair salon, a cleaners, a restaurant, painting, dry wall, landscapping because those businesses are dominated by immigrant with large extended families that can support their efforts.

Also, as HS as discussed before, who is going to marry a 24 y/o white male without a college education or great career prospects?

One of the causes of credentialism is that it is one thing that middle and upper middle class whites are better at than blacks, hispanics, or most immigrants. Only Korean, Chinese, or Indian immigrants can compete with whites when it comes to credentials.

Half Sigma and Superdestroyer,

Lots of smart kids could easily get a job in an office at 20k per year. Remember, we're talking about the top kids here, ones that would get into $40k/yr schools. Most already have taken and passed college courses in high school! And a woman of the same mindset would marry a guy like that. Remember, its only 20k/yr to start. After all, they would have hundreds of thousands in the bank!

Lots of people start their own businesses. I thought about making a list, but then I realized how futile that would be because I would have to list hundreds of jobs. All you have to do is look around. You guys are offering excuses for your undying faith in the big college rip-off, and you know that most kids would be better off if they did what I described above. Our nation would too.

I'll give you a great example. I'm an engineer. I can tell you for a fact that I might have needed only a year or two (probably only a year and a half)of training outside of what I got in high school to do my job. Ninety-five percent of what I have learned to do my job I have learned on the job. You want a couple of jobs that require little schooling, yet pay fairly well? How about being a CADD operator (35-40k plus benefits), or a surveyor or assistant surveyor? Or how about the salesman who was trying to sell me a GPS unit last year? I bet they make more than I do. All they need is some survey experience and some people skills. The world is wide open for those bright kids, and yet all they are told is to go to school and bankrupt themselves in a silly credentalism race which funds a vast socialist enterprise bent on destroying white western culture and bankrupting and corrupting its best and brigthest. I don't think that's very smart, do you?

Statistically most businesses do fail. And that's your entire mindset right there. You all want to avoid risk! This country was built by small businessmen, for Christ's sake! Everybody who learns encounters failure--that's how they learn! I mean real world learning, not book learning. And the vast majority of those who do succeed in business failed before they were successful.

One last example. I like to paint (realistic images). I'm pretty good at it. But in order to get there, I had to fail may times and keep going. How does one learn otherwise?

Also, very quickly, Superdestroyer, I think race-quota jobs tend to seriously negate your last point. Also, I used to know 5-6 white women who ran a hair salon and did fairly well for themselves about 40-60k per year. Not bad for just a year or two of school. Also they get a bunch of tax breaks. I have a hard time believing you really know your neighbors--I get the feeling you only hang out with others of the over-credentialed crowd. A pity.

Some big assumptions here which set high standards for American parents:

1) Parents have $160,000 saved for your college (most kids take out loans for at least part of tuition/costs).

2) Parents will happily turn this saved money over to you to "invest" instead of going away to school.

3) Parents will be just thrilled to let their adult kids live rent-free with them for another four years or so while the kids practice failing.

4) Adult American kids can live at home with their parents and still progress socially and sexually, rather than ending up lonely and screwed up (while college students are building networks in the dorms, Greek systems, etc.).

I've known plenty of young people who live at home, work full-time -- *especially* at jobs like hairdressing and clerical -- and still barely get by. There are many other expenses, even assuming the parents don't mind preparing all their meals and covering the mortgage/utilities on their own.

Not to mention, abusive parents don't get any less so when one turns 18.

Spungen,

I think #3 and 4 of your arguments are silly, but of course, you can believe that if you want. The real facts are that there are a lot of parents who have saved up a lot of money, or will devote most of their incomes in those years to hand over to the socialist training grounds. The figure of hundreds of thousands is really quite accurate. We can quibble about the exact amount, but is has little to do with the alternate scenario I was talking about. The money would be better spent buyinga a house outright. Do you know how much money you would save on interest alone by using that dough to buy a house outright for the kids? As far as the post-college temp workers you cite who "can't make enough to move out", who are straddled with student loan debt and a liberal arts degree which they can't market, or who can't afford to move out because they can't move out and party and buy stuff like they'd wish, I'm not really talking about those types. You know, the 28 year old live at home type. You guys were talking about the kids who can get into $40k per year schools, not people who barely made it out of high school. Also, I mentioned getting married early, and having kids early--if you have hundreds of thousands in the bank, its not too hard to move out buddy! Out of the house by 22, financially set up, as opposed to 24 or 26 or 28, living in debt in the big city/high housing cost blue state liberal dumping grounds, like their big college peers.

Sheesh, the lack of imagination you guys show is truly amazing! I guess IQ tests don't measure creativity now, do they? In case you hadn't noticed, the middle class is shrinking. Somethings's going wrong in a big way. Where is all the money going? What can you do to keep hold of it, rather than hand it over to those who are actively destroying the country? You keep thinking that the answer you have is the ONLY answer there is--waste a lot of time and money trying to outcredentialize the next guy and work in some big corporation. I'm sorry if this is a surprise to you, but a lot of people, in fact most people, become wealthy by starting their own businesses, or by making money outside of that system. Keep playing the yuppie game if you want, but that's the facts. I'm just trying to point that out. Run some numbers and let me know what you think after you do that. Tell me what you would pay in interest over the life of a 30 year loan for a $200,000 to $300,000 house. Then we'll talk about opportunity costs.

you all know how someone becomes highly intelligent: he reads, studies, learns, ...no friends, no connections. how logical would it be to expect him to earn a lot of money? he might win some prizes for his works, but what are the odds that someone will win the nobel prize? someone with less intellegence and more connections (therefore better communication skills)hires him, pays him his salary, and makes a lot of bucks exploiting his intelligence

I'm a senior at Harvard, and want to put in my few cents. I think HS's early point about options and choice are very important.

I came to H from a lower class background, with pretty good credentials (1600, val of avg public HS), and am now about "average" in the class here (3.4 gpa in biochem, 36 MCAT). I've had to work my ass off for that gpa (grade inflation's a myth, btw), but the upshot is that I now have great options coming out of Harvard. I worked last summer in ibanking and got a FT offer, and have also been accepted to a decent medical school, which I plan on deferring so I can try out banking.

Harvard definitely covered my optionality in both directions (i.e. if I failed to get a banking offer from my summer employer, I would still be confident of getting into med school; if I had decided I had no interest in medicine, I could just continue on in banking). This was true of my classmotes too. The ones who want to (even if they have 3.0s) still get banking jobs, and the 5% of Harvard kids who don't get into medical school don't because they never *shadowed* or only applied to the *top* schools. So choice is key in this discussion; kids from the "bottom" of the class to the "top" who want to can and will do well. However, many people at H forego lucrative careers and choose grad school, teaching, public service, etc.

The difference with public schools, "second-tier" privates like Tufts and BU, and even the "lower" Ivies is that kids at those places LACK OPTIONALITY. They don't have the choice of hedging their bets between med and banking because the few banking spots available go to very top econ majors, and a 3.4 from those schools will drop them from consideration at most med schools.

So IMHO, if you or your kid can get into an HYP, do whatever you can to make it so. it'll pay off, bigtime.

Comically, that's exactly what I did. I was at a lower Ivy and had impressive GPA...applied to banking, couldn't pass the interviews...applied to med school, did poorly on the interviews but went to a mediocre med school and got a mediocre radiology residency. (Radiology is a fairly competitive residency but not the most.) I am quite mindful of HS's points about personality, and may be the only person I know of who can honestly say they screwed up their career by partying too _little_.

I didn't really screw up as much as underperform. Still, it is incredibly humiliating to fight your way to the Hopkins interview, get dropkicked to a mediocre med school, fight your way back up to a Hopkins (and MGH, UCSF) interview AGAIN from a MEDIOCRE school, and get dropkicked to a mediocre program again!

Again, I'll probably do OK in life, but you can understand my lack of enthusiasm.

if you are mediocre, ivy league is worth it.

if you are smart, it isn't.

reason: companies hire *smart* people (or like to!). ivy league etc. is a good way of covering up your mediocracy and signaling you are smart.

Otherwise, you will have to prove it in different ways. but it can be proved and you can be successful. But you need to be the top of the pack at your 2nd-tier!

I'm 23 and just signed an offer for 70k+bonus as an engineer...graduated from 2nd tier school (60-70 ish).

I would like to say that prestige is only important if there is no other way to distinguish yourself otherwise.

I am one of the smart kids (1400 SAT). Went to a state school (U of Idaho). I did poorly because all of my time went into beer and girls (GPA 2.7). After graduation I became a firefighter for a mid sized city ($65k/yr). After four years I have applied to medical school and have been accepted to the best primary care medical school and top 10 in research (UW), and I expect to be accepted at the only other medical school that is a top 10 school in both research and primary care (UCSF). My MCAT was good but not the best (36), but I found a way to distinguish myself. While neither of these programs are "prestigious" to the lay public, both are top ranked, and known as the best within the medical community.

I have been fortunate to be able to play both games, the invest young and have no debt (no student loans, I own the majority of my home, I do not come from money but have some invested), and the prestige games. If I was unable to get into medical school, I still have a job that will peak at a salary of about $100k/yr, I will have a decent portfolio of investments, no debt, and have a job that while not "prestigious", gets a lot of "wow, that is so cool!" Now I am looking at ending medical school with no debt, having a job that pays ~$200k/yr, and is prestigious.

In summation, optionality is available from other sources than Ivy league schools, creativity is more important than undergraduate prestige, and differentiating ones self makes more difference than credentials.

Look dude.

1400 is not "smart". Its probably several SD's above the mean at UIdaho, but it's an SD below the mean at HYP. IN light of that, your performance in college was truly atrocious.

As a result, your option was Firefighting. A kid at HYP (who has worked hard to get in there; legacies and athletes are still pretty damn good) can choose between Ibanking, Law school, Consulting, and Medicine, roughly speaking, irrespective of UG performance at graduation. Big difference.

Second of all, you were pretty lucky to get into med school, if you did at all and aren't bs'ing here. It's hard for me to see how you were accepted to good schools, unless your firefighting experience made for a great story (and combined with your decent MCAT, told them you had some aptitude for medicine). The average HYP kid is not gonna throw away 4 years of his life as a firefighter, bc he has other more lucrative options. Frankly I don't think you deserve to have been accepted into med school, considering the # of people in this world who do work their asses off in college and never get in. What has happened to you can be roughly described as "serendipity" - most kids in the world w. 2.7's from UIdacho will do very poorly in life, while HYP kids w/ 2.7s will still do banking, still probably get into med school, etc.

also, as i recall, UW has an admissions linkage w/ idaho since the state has no med school. They had to fill their annual quota of Idahoans, and you probably had the highest MCAt coming from a state like ID, despite having among the lowest GPAs.

This post shows the importance of frame of reference and thus expectations in happiness. For a kid from Idaho, an OK med school is pretty good. For a Manhattanite, it's horrendous.

Frankly I don't think you deserve to have been accepted into med school, considering the # of people in this world who do work their asses off in college and never get in. What has happened to you can be roughly described as "serendipity" - most kids in the world w. 2.7's from UIdacho will do very poorly in life, while HYP kids w/ 2.7s will still do banking, still probably get into med school, etc.
Deserved? The dude spent four years of his life fighting fires. Some people might say that makes you a lot more deserving than some Harvard guy born with a silver spoon in his mouth.

Second of all, from what I recall about Ivy League grade inflation very few people at HYP actually get 2.7s.

i respect all work, but it is what it is. its firefighting, and for a lot of people (myself included), doing physical stuff would actually be more fun than studying, which is a hell of a lot more relevant to medicine. simply put, this guy dicked around in college, but in the eyes of the med school, has made up for it. I don't think this is appropriate. You can win the Medal of Honor, but how the hell would that make you better master the academic material relevant to being a good doctor, physicist, lawyer, etc?

60% of kids at H are on finaid. personally, im from the deep south and on need based aid (w/o divulging too many details).

anyways, i never said one couldnt succeed from a top school. my point was and is that one can do anything out of HYP, and also has a safety net if something bad happens (gets a sub 3.0), and will ultimately have a higher income (relate back to thesis of OP). Cases like this guy are more examples of serendipity and isolated luck, so for a kid that gets into a top school, he should go.

so for a kid that gets into a top school, he should go.

Now that, my friend, we can agree on.

Really, really high IQ people tend not to have making the most money as their primary motivation. Instead they want high status among those they consider their peers -- i.e. other brainiacs. This is particularly true in subcultures that encourage this, as in at least some corners of many IVY's and technical universities (e.g. MIT, CalTech) do.

Making a whole lot of money probably depends first upon having an IQ comfortably over a threshold depending upon the field (as will be the case with most IVY admittees), and then having a combination of really high drive and charisma. High levels of testosterone are involved in both, but I think charisma requires some additional factor beyond drive and intelligence. Maybe it's as simple as self confidence, I'm not sure.

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