Every year, many students compete to gain admission to a relatively small group of selective colleges. Going to one of these top-tier colleges may carry with it the promise of good prospects after graduation, but when Chicago Booth’s Jack Mountjoy and Washington University in St. Louis’s Brent Hickman analyzed the value in attending one college in Texas over another, they find that going to a more selective school provided only a small, temporary earnings premium. What seemed to matter more was a student’s preexisting individual potential. Among high schoolers who applied to and were accepted by the same set of colleges—a useful signal of ability, ambition, and other unobserved advantages—earnings were fairly similar regardless of where they ended up enrolling, the researchers find. Even so, some colleges do add more value than others. While a school’s selectivity may not significantly affect how much its graduates make, other factors such as instructional spending and faculty characteristics tend to. See our article “Is That College Worth the Price Tag?” to learn more.

Academic equation showing how a combination of student and college attributes affect post-graduation earnings outcomes, with chalkboard-style illustrations of student and graduates

Illustration by Peter Arkle

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