On Campus

Want to be a billionaire? Go to Harvard

That's what a study of America's ultra-rich suggests. But read the fine print

A recent study by Forbes magazine shows that more than one out of ten American billionaires received a degree from Harvard. According to the publication, 50 of America’s 469 billionaires graduated from Harvard. Stanford came in second among American universities, with 30 billionaire alumni. Rounding out the top five were the University of Pennsylvania (27 grads), Yale (19) and Columbia (15). In fact, Forbes found that a mere 20 universities and colleges accounted for 52% of America’s billionaires.

The interesting question is whether Harvard, Stanford et. al. delivered these results because they offer such a superior education. That would be the easy take away from the Forbes survey.

But let’s not settle for the easy answer. Harvard, Stanford & co’s great numbers must to some extent be a reflection of selectivity bias: the most selective universities in the U.S.A. only admit the most successful high school students; given those inputs, it would be a surprise if they didn’t also produce the most successful graduates. For example, New York University can count 10 billionaires among its alumni. But five billionaires are also NYU drop-outs. NYU has more drop-out billionaires that all but a handful of U.S. schools have graduate billionaires.

All of which supports the point made a few years ago in this study by economists Stacy Berg and Alan Krueger: that while attending university is an important contributor to future career success and high incomes, where you go university matters little. Berg and Krueger looked at students who had been admitted to and attended highly selective Ivy League universities in the 1970s, and compared them to students who had been admitted to those same selective schools during the same period, but who for whatever reason chose to attend a less prestigious, less selective American university. When the economists looked into the incomes of these people two decades later, they found no meaningful difference in earnings. In other words, having good enough grades to get into Harvard will have an influence on your future career success but actually attending Harvard may not. (For what’s it’s worth, however, if given the opportunity to attend Harvard, I suggest you take it. Even if Krueger and Dale are right on the narrow point about long-term earnings, what have you got to lose? It’s like the higher ed equivalent of Pascal’s wager.)

Other things to nitpick with on the Forbes list? They appear to be counting graduates of both undergraduate and graduate programs. (Or at least that’s what I understand from the explanation in the above article, as well as the information in this interactive map.) That means we’ve got several different kinds of fruit tallied up in the “apples” column. For example, a fair number of Harvard’s billionaires appear to be Harvard MBA grads (or at least that’s how i read the interactive map….) It doesn’t undermine the argument that a Harvard education contributed to their success, but neither does it support the notion that a Harvard college education contributed, since many of those in the Harvard tally appear to have never attended Harvard college.

The Forbes interactive map also shows how each of these people made their money. And guess what? More than a few of them inherited it. Which also somewhat attenuates the argument that the particular university they attended contributed to their becoming a billionaire.

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