Source: WSJ, Feb 2016
Diplomas from prestigious schools boost future earnings only in certain fields, while in other fields they simply don’t make a difference.
Specifically, for business and other liberal-arts majors, the prestige of the school has a major impact on future earnings expectations. But for fields like science, technology, engineering and math, it largely doesn’t matter whether students go to a prestigious, expensive school or a low-priced one—expected earnings turn out the same. So, families may be wasting money by chasing an expensive diploma in those fields.
For STEM-related majors, average earnings don’t vary much among the college categories. For example, we find no statistically significant differences in average earnings for science majors between selective schools and either midtier or less-selective schools. Likewise, there’s no significant earnings difference between engineering graduates from selective and less-selective colleges, and only a marginally significant difference between selective and midtier colleges.
What’s going on? For potential employers, the skills students learn in these fields appear to trump prestige—possibly because curriculums are relatively standardized and there’s a commonly accepted body of knowledge students must absorb. So, a student may not need to attend the best possible school to ensure a good salary after graduation. (It’s important to note that we controlled for numerous other factors that might influence postgraduation earnings, such as family income, race/ethnicity, gender, marital status, SAT score, postgraduate degree and age at graduation and more.)