Many of our best and brightest high-school seniors know what most of our higher-education leaders have been reluctant to admit: An increasingly small number of colleges and universities have become the gatekeepers for society’s top- paying jobs.
Look at the legal profession. Lawyers who deal with mergers and business acquisitions, for example, receive just a small percentage of the money involved in the transactions that they negotiate, but their fees can amount to millions of dollars in multibillion-dollar deals. Not surprisingly, many bright and ambitious young people ask themselves, “How can I get a job as a Wall Street lawyer?”
Wall Street law firms typically are inundated with applications for each entry-level position and will not grant interviews to graduates of any but the top law schools. And how does one gain admission to such a school? The surest route is to have been an outstanding student at one of a handful of prestigious colleges and universities.
In past decades, many of our best students attended state universities close to home, where they often received an excellent education at reasonable cost. Today, such students are likely to be vying for admission to the nation’s most elite colleges and universities. Does this widening of the “prestige gap” between elite and lower-tier institutions, this “tracking” of students into educational institutions by their ability, raise matters of public concern? Or are these shifts simply of interest to institutions at or near the top? We think they raise issues of general social importance.
The increased interest of top students in attending the most- prestigious institutions is easily documented. During the 1980s, for example, 59 per cent of the finalists in the Westinghouse Science Talent Search (one of the nation’s premier academic contests for high-school students) chose to enroll at one of just seven institutions -- Cornell, Harvard, Princeton, Stanford, and Yale Universities, the California Institute of Technology, and the Massachusetts Institute of Technology. The same seven institutions led the list in the 1970s, but enrolled only 48 per cent of the Westinghouse finalists.
Further, by 1990, about 43 per cent of students scoring above 700 on the verbal section of the Scholastic Assessment Test chose one of the 30 “most competitive” colleges listed in Peterson’s Guide to Four-Year Colleges, up from 32 per cent in 1979. And Richard Spies, vice-president for finance at Princeton, has estimated that from 1976 to 1987, the probability increased by about half that a student with a combined S.A.T. score above 1,200 would apply to one of the 33 elite private institutions belonging to the Consortium on Financing Higher Education. This trend in applications has continued into the 1990s.
The quest for a high-paying job is clearly not the only cause of the increased concentration of top students at prestigious colleges and universities. Travel costs are lower now, and elite institutions have increased their efforts to attract talented students from outside their traditional applicant pools. Even more important, demographic and economic trends have made elite institutions increasingly affordable and therefore attractive to more families.
Households headed by well-educated, older workers -- which provide a disproportionate share of the top students -- have enjoyed substantial growth in income since the early 1970s. This period also has witnessed a steep decline in the average number of children in the families of college-age youths. Thus, despite a doubling of tuition (in constant dollars) since 1979 in the Ivy League, for example, an elite private education has actually become more affordable for a substantial share of the relevant market.
But we cannot escape the conclusion that the growing economic payoff of obtaining a degree from an elite college is driving the concentration of top students at such institutions.
In our recent book, The Winner-Take-All Society (The Free Press, 1995), we document a large increase in inequality of earnings within every white-collar profession. The number of Americans earning more than $120,000 a year (in 1989 dollars) doubled during the 1980s. While median earnings were stagnant in most of the white-collar professions during that time, more than 60 per cent of the increased number of Americans earning more than $120,000 a year had incomes at the top end of the salary scales for executives, physicians, lawyers, sales representatives, and other professionals. Thus, people in those occupations had a greater chance of earning a six-figure income not because of general growth in earnings in their profession, but because of increased compensation for those at the top. A degree from an elite college long has helped graduates gain high-status jobs -- and the payoff of those jobs has grown sharply.
A self-reinforcing process of the “rich get richer” sort also underlies the concentration of top students at a few institutions. Athletics directors understand this process well, knowing that a successful football season one year will make it easier to recruit top players the next. On the academic side, as more and more top students have chosen elite institutions, the gap in academic prestige between Ivy U. and State U. has widened. This, in turn, has provided an even more compelling reason for students to choose an elite college.
As Thomas Ehrlich, provost of the University of Pennsylvania during the mid-1980s, has put it: “The wonderful thing is that the more successful you are, the more successful you are. The more you hear Penn is the institution of choice, the more you want to come.”
This process is strengthened by the now-ubiquitous rankings of undergraduate colleges, and by the fact that the quality of an institution’s students affects its ability to recruit the best faculty members. Further, the amount of income earned by alumni affects the amount of alumni giving, reinforcing an institution’s desire to attract students likely to earn high incomes.
But we should recognize that the increased concentration of top students at elite institutions entails both benefits and costs. Perhaps the most important benefit is that gifted students have access not only to the best faculty members, but also to one another. To the extent that society’s top jobs always have been filled through networks of contacts that originate in elite universities, such jobs now are more likely to be filled by our most able students. If so, America’s standing in the global economy will benefit.
But obvious concerns about equity remain. If America aspires to be the land of the second chance, we lose something important when so many top jobs are closed to students unable to attend a prestigious institution. Able youths who do not grow up in an environment conducive to academic excellence or who bloom intellectually after high school are at a greater disadvantage now, when a degree from the local state university leaves them economically further behind Ivy League graduates than would have been the case a generation ago. We are troubled by the image of an “overclass” of high achievers propelled by their elite credentials, while graduates from other colleges find it increasingly difficult to compete.
Concerns about equity will be mitigated as long as many elite institutions retain their commitment to “need-blind” admissions, offering financial aid that meets the needs of all admitted students, while generally avoiding merit-based scholarships. If a college admits students without regard to their financial standing and provides them with whatever aid they need, no top student will be prevented from attending an elite institution because of financial concerns. On the other hand, if such institutions use financial aid to compete with one another for the very best students -- regardless of family income -- little money may be left for the poor or middle- class students of slightly less academic merit who nonetheless qualify for admission.
Will elite institutions continue to follow need-blind policies and to shun merit-based awards? To attract better students, a number of public and private second-tier institutions already have modified their approach to financial assistance, increasingly awarding aid based on academic merit rather than financial need. We doubt that the top-tier institutions will stick to their democratic commitment in the face of this competition. We may see some of them reduce financial aid to needy students who are not of star quality, in order to put more money into merit scholarships.
Just as a college or university can improve its standing by bidding for star faculty members, so can it improve by bidding for top students. Indeed, sought-after students already have begun to negotiate with competing institutions over the terms of their financial-aid packages. At the nation’s leading business schools, for example, financial aid for non-minority students already is based almost totally on merit.
It is highly likely that the increased concentration of the most-talented students at prestigious institutions will continue. Look at the case of Jim Besaw. In the spring of 1994, as a top senior at a Minnesota public high school, he turned down a full scholarship to Carleton College, a small, highly selective liberal-arts college in his native state. Although his father was retired and his mother earned only $8,000 a year, he enrolled at Yale.
“I’m willing to lose some money now and take out a loan,” he explained, “because I feel I might get a better job if I go to one of the more prestigious schools.”
Many other students apparently agree; Yale’s applications rose 21 per cent that year and continued at the same level in 1995.
What can we do about this situation? No easy solutions suggest themselves, because what we’re experiencing grows out of a complex mix of economic, demographic, and social factors. But we at least need to begin talking openly about the fact that it is occurring -- and about its social costs.
Philip J. Cook is a professor of public policy at Duke University, and Robert H. Frank is a professor of economics at Cornell University.