Should You Compare Colleges Based on Future Earning Potential?

By Sam Coren Staff

compare colleges earning potentialThe economists who broke the news that graduating from an elite college doesn’t guarantee you to earn more money are at it again. Stacy Dale and Alan Krueger have updated their study with a decade’s worth of new data that suggests ambitiousness in the college applications process can be a stronger indicator of future earnings potential than an actual Ivy League diploma. Since running their first study, Dale and Krueger have expanded their resource pool to include social security records to measure the earnings of 19,000 college graduates who were freshman in 1989.

Dale and Krueger’s updated study included a new variable beyond SAT scores and grades. The new study collected information on the colleges that students applied to. The economists found that with SAT scores and grades as a constant, students who applied to more selective schools were likelier to have a higher income regardless of whether they were accepted or not.

However, for high school seniors this doesn’t mean that when you go to compare colleges and mail off your applications you should have your future paychecks as your primary concern. Even Krueger admits that choosing colleges based on what you think your future earning potential might be is a bit shortsighted:  “Recognize that your own motivation, ambition and talents will determine your success more than the college name on your diploma.”

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