What's an elite education worth? (Part II)

A decade ago, two economists -- Stacy Dale and Alan Krueger -- published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a ton of attention. Ms. Dale and Mr. Krueger have just finished a new version of the study -- with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates -- and the new version comes to the same conclusion. ...

Ms. Dale -- an economist at Mathematica, a research firm -- and Mr. Krueger -- a Princeton economist and former contributor to this blog -- added a new variable in their research. They also controlled for the colleges that students applied to and were accepted by. Doing so allowed them to capture much more information about the students than SAT scores and grades do. Someone who applies to Duke, Williams or Yale may be signaling that he or she is more confident and ambitious than someone with similar scores and grades who does not apply. Someone who is accepted by a highly selective school may have other skills that their scores didn't pick up, but that the admissions officers noticed.

Once the two economists added these new variables, the earnings difference disappeared. In fact, it went away merely by including the colleges that students had applied to -- and not taking into account whether they were accepted. A student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.

That's David Leonhardt, though note the caveat:

A few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college. "For them, attending a more selective school increased earnings significantly," Mr. Krueger has written. Why? Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home.

My previous post on this subject is here.