ivy league admissions vs. ivy league job prospects
Two conflicting themes about elite institutions:
1. Many Ivy League students are selected on political grounds – legacies, athletes, and various “well rounded” kids:
Researchers with access to closely guarded college admissions data have found that, on the whole, about 15 percent of freshmen enrolled at America’s highly selective colleges are white teens who failed to meet their institutions’ minimum admissions standards.
This report is about minimum standards. Lots of other kids probably meet minimum requirements but probably wouldn’t be competitive if it weren’t for being children of alumni.
2. Recruiters from elite law, consulting, and investment banks exclusively focus on about three or four elite colleges. See Caplan’s review of Lauren Rivera’s ethnography of elite firm recruiting for details. The take home points:
- Elite firms have no time to sort through people.
- Nearly all applicants from low status schools (e.g., the “public Ivies” like Michigan or Berkeley or any other non-HYP school) are tossed in the trash without review.
- There’s a signalling of habitus – applicants need the right interactional skills, the right major, the right extra-curriculars, showing similarity to the recruiter
- There’s modest amount of evaluation based on performance (SAT or GPA), but not a lot.
So what gives? Are elite firms stupid? Do they not know that a huge chunk of Ivy league graduates simply don’t have what it takes to get into Ivy League colleges without the help of mom and dad? If they do know, why do they keep hiring these people?
A few answers:
- These firms are selling legitimacy. Buyers want the comfort of the Ivy League brand, so there’s a premium. For this story to work, you need to believe that these services – investment banking, consulting – can be easily taught to people who aren’t geniuses.
- Heterogeneity. Yes, Ivy League schools have dim kids, but they do accept lots of brilliant people as well. So just hire a bunch of them and fire those that fare poorly, which is the strategy for many investment firms.
- Opacity. It’s hard to assign credit to specific people in these industries. So the whiz kid math majors who do the mental heavy lifting have to share credit (and paychecks) with the legacy kids. That allows the system of hiring by college to survive.
Add your own explanations.
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4. Having the right friends and family connections is itself one of the assets that is valuable to elite firms (this would especially explain why they wouldn’t be troubled by legacy kids, but anybody who went to an elite college has valuable contacts in the form of fellow students from that college).
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Protagoras
December 1, 2011 at 1:49 am
5: satisficing. Minimum (published) standards at Ivies are set so that they balance two potentially competing needs: maximum enrollment and maximum selectivity. These standards are higher than the standards one would impose if the only goal was to identify students who have the “raw” — pre-BA — potential to graduate with the skills necessary to work at an elite firm. (In other words, the 15% or whatever that don’t meet published standards may still smart enough to learn how to be a consultant at an elite firm.) Given this, the added cost to the firm of identifying “the best” graduate exceeds the added returns of this person relative to an almost randomly chosen Ivy graduate.
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krippendorf
December 1, 2011 at 6:46 am
None of these business models are “rocket science”: one is a form of legitimate gambling, one repackages and repurposes research for their clients, and one relies on manpower and resources to win legal cases for the clients. What makes or breaks any of them is their ability to woo clients through their well connected rainmakers, whom they need to constantly replenish, which is probably best done by hiring competent young people from wealthy and connected families. I’m surprised they don’t explicity go after the legacies.
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Anon
December 1, 2011 at 2:03 pm
In the case of investment firms, I believe economists have shown that they pick stocks no better than if they were to select them at random. So perhaps “stupid” is an explanation :) Or, maybe Anon is right.
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Charles Seguin
December 1, 2011 at 3:56 pm
Are elite firms stupid?
Good question. I think a big part of the story is that firms are hiring people as much for their “cultural fit” as they are for their particular skills and intelligence. Another paper of Lauren’s (which isn’t yet published) uses the same set of interviews to show that once an applicant makes it to the interview stage the interviewees heavily weight their assessment of applicants based on how culturally similar they are to other members of the group for which they’ll be hired. Ivy League schools, in this sense, culturally prepare their students to fit into these organizations by giving them exposure and familiarity with the right kinds of extracurricular activities and developing the right sorts of personal interests.
I had my MBA students read this paper, and I was surprised to hear how comfortable they were with the idea that cultural fit is (and should be, in their minds) one of the primary drivers of elite hiring selection. Some of them responded like, ‘duh, you can’t introduce people with the wrong fit into a consulting group and expect they’ll work out.’ Some students expressed concern that this practice was ignoring a lot of qualified people, but most were content that cultural selection probably led to enough performance advantages to justify the practice.
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brayden king
December 1, 2011 at 5:05 pm
@brayden: I don’t this area well, but is there research showing that cultural fit/cultual capital actually does lead to better performance?
My bet is that in fields where much is interactional, then the answer may be yes.
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fabiorojas
December 1, 2011 at 5:40 pm
Fabio – There’s a huge literature on groups and much of it shows that groups with diversity have performance advantages. Keith Sawyer, Scott Page, and Kathy Phillips have all written on this.
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brayden king
December 1, 2011 at 5:51 pm
@brayden: Duh! Thanks for reminding me. If we believe that literature, then it suggests that your MBA students are wrong. “Cultural fit” decreases performance. Maybe the most charitable argument is that certain types of jobs (like law) are exceptions where uniformity are good.
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fabiorojas
December 1, 2011 at 5:53 pm
@brayden: Bonus round question from the economists – if elite firms are acting stupidly, why don’t other firms compete by hiring qualified non-ivy league people? There’s a huge amount of money at play and it’s a plausible strategy. My answer would be that people in those industries are buying image rather than other traits (like knowledge of the law/investment skills).
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fabiorojas
December 1, 2011 at 5:56 pm
@brayden: If I remember Laumann/Heinz’/et al analysis of Chicago lawyers, the answer is opacity. People can’t evaluate quality of legal services (e.g., how do I know if a merger was done in the best possible?) so we go with easier signals.
The general argument was that transparency decreases the importance of symbolic and cultural capital. Law, investment, and consulting are all markets where outsiders have a notoriously tough time evaluating the work of insiders.
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fabiorojas
December 1, 2011 at 6:00 pm
Such firms are reminding me of an acquaintance’s interview at Google: “It’s like everyone you hated in high school works there.”
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elizp
December 1, 2011 at 6:38 pm
I guess it depends on how you define “elite.”
Myself, I would look at successful innovation and profitable entrepreneurship that finds inefficiencies and reduces them by navigating uncertainty and risk. But, as is famously known,the Forturne 500 churns. Here we sit at our computers, none of which came from investment banks, law firms, or consultancies. CAT scans, MRIs, the most recent Mars probe, the human genome and genetically modified organisms, it is pretty easy to point to the truly eilte. As for those others, the great philosopher of capitalism called them “moth-eaten turrets and tenth-hand unicorns.” Back when my wife, daughter and I were playing “Rogue” and “Moria” on our IBM-PC/XTs, we visited the Cleveland Museum of Art. I took my daughter to the Armor Room, to see the weapons we gamed about. There was a breastplate with a large bullet hole. “Elite” is such a transient idea…
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Michael E, Marotta
December 1, 2011 at 6:42 pm
Replication. A lot of the literature on biglaw hiring suggests that partners are looking for people just like them. I imagine most partners would agree that they are missing some qualified candidates this way–but after all, if the partner was successful, they would expect their Mini Me to be successful too.
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Mikaila
December 1, 2011 at 7:01 pm
A part of the reason why firms recruit from Ivy League schools is because of networks. As a raw percentage of the Ivy League class, many go on to do work in large Fortune 500 corporations and large NGOs — who are typically the clients of a law firm. Chances are an Ivy League graduate knows someone that works in industry that may be a potential future client.
Now, these elite firms aren’t expecting their new analysts to bring in clients, but that’s a criteria for those on the partnership-track. And there’s always large movement — “up or out” — and also a lot of movement out into industry. This is why the alumni status of someone who leaves an elite firm to go elsewhere (such as a Fortune 500 corporation) is of immense importance — they could potentially be a future client when they are, say, VP at Microsoft one day.
Thus, a lot of hiring through Ivy League is due to EXPECTED behaviour from their alumni. The revolving door at these firms make the nature of the job necessary to depend largely to translate social capital into profit. That’s why in Rivera’s article it was mentioned that the law firm went head over heels to hire the Yale Law School graduate, even though they knew she would undoubtedly leave after two-three years. What business would hire an employee that they knew would want to leave after two years, and have to train another one? That’s because a large chunk of their FUTURE business depends on their alumni and connections — their social capital. Especially since there may not exactly be any loyalty to a service provider.
You don’t get this sort of benefit by hiring Public Ivy graduates. The fact that schools like Harvard have such weight in the business world means that Harvard alumni get pipelined into high positions at large corporations. Firms want those kind of people working for them not because of their technical expertise from Harvard’s schooling (Harvard’s education is in fact quite the opposite), but because one day they will be a Fortune 500 CEO and will call on their law firm or management consultancy for services. How else do large corporations “choose” what law firm or management consultancy to call upon for help when they need it?
That, and of course, the prestige/status that comes with such exclusive recruiting doesn’t hurt.
Simply put, people at these firms are hired never on their technical expertise, but on expectations. A monkey could do their job.
That a school like Harvard has such name recognition and that a large chunk of their alumni end up wildly successful means firms are being rational to hire them to ensure future business. Firms, in this case, are actually no different from admissions committees — they want to hire future leaders. Harvard students only stay for four years. At these elite firms, they may stay for even less. The payoff comes in the future.
Firms get connections from former employees, and Harvard gets alumni donations for the largest endowment in the world.
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keith
December 1, 2011 at 7:45 pm
The most interesting of all is that these companies are unable to produce even a button.
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Danilo
December 3, 2011 at 4:02 pm
@Brayden and Fabio:
I think the literature Brayden mentioned deserves two caveats: First, diversity is not likely to improve performance outcomes when the tasks involved are repetitive or simple. This is probably the case in the three industries mentioned to varied degrees, but as other commenters noted, none are “rocket science” and in some cases “a monkey could do their job.”
Secondly, even if diversity does enhance performance (and I believe it does), it might also reduce collaboration or employee satisfaction by increasing the likelihood of conflict. This could in turn impact performance (the time scale you use is important here).
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Zach
December 4, 2011 at 12:17 am
ROFL at these earnest attempts to rationally explain lazyness. I’ll offer another. Some firms who hire grunts do bait and switch team consulting. A knowledgeable guy or gal closes the sale. Grunts executing it charge high per-hour rates but may have few skills. They might go longer before clients object, if they have elite diplomas. Or the client may already know what they should say, but will want the elite diplomas to back them up, in which case experience from the team is not too necessary anyhow.
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Tony
December 4, 2011 at 7:46 am
False propaganda put out by someone attempting to shield Ivy League institutions from responsibility for graduating the economic masterminds of our time.
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Fred Slocombe
December 8, 2011 at 5:59 am
“Do they not know that a huge chunk of Ivy league graduates simply don’t have what it takes to get into Ivy League colleges without the help of mom and dad?”
These students can be weeded out by looking at their grades and major, or in an interview.
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Alex T
December 9, 2011 at 6:21 pm
@fred slocombe. “False propaganda put out by someone attempting to shield Ivy League institutions from responsibility for graduating the economic masterminds of our time.” Yes they are masterminds, considering how extremely well they’ve done (for themselves).
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Alex T
December 9, 2011 at 6:24 pm
@Alex T: this is unclear to me given the extreme grade inflation at Ivy League schools. There is very little variance in GPA compared to other schools.As far as major, it’s possible, but I’d like to see more systematic evidence.
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fabiorojas
December 9, 2011 at 6:26 pm