Thursday, January 13, 2011
Only Graduates of 'Top 5' Schools Land the Best Jobs
If you want to get a job at the very best law firm, investment bank, or consultancy, here’s what you do:
1. Go to Harvard, Yale, Princeton, or (maybe) Stanford. If you’re a business student, attending the Wharton School at the University of Pennsylvania will work, too, but don’t show up with a diploma from Dartmouth or MIT. No one cares about those places. ... That’s the upshot of an enlightening/depressing study about the ridiculously narrow-minded people who make hiring decisions at the aforementioned elite companies. ... These firms pour resources into recruiting students from “target schools” (i.e., Harvard, Yale, Princeton) and then more or less ignore everybody else. Here’s a manager from a top investment bank describing what happens to the resume of someone who went to, say, Rutgers: “I’m just being really honest, it pretty much goes into a black hole.”
Lauren Rivera (Northwestern University, Kellogg School of Management), Ivies, Extracurriculars, and Exclusion: Credentialism in Elite Labor Markets, in Research in Social Stratification and Mobility:
Although a robust literature in sociology and economics has demonstrated a positive relationship between education and socio-economic attainment, the processes through which formal schooling yields enhanced economic rewards remains less clear. Employers play a crucial role in explaining the economic and social returns to formal schooling. Yet, little is known about how employers, particularly elite employers, use and interpret educational credentials in real-life hiring decisions. In the following article, I analyze how hiring agents in top-tier professional service firms use education to recruit, assess, and select new hires. I find that educational credentials were the most common criteria employers used to solicit and screen resumes. However, it was not the content of education that elite employers valued but rather its prestige. Employers privileged candidates who possessed a super-elite (e.g., top 5) university affiliation and attributed superior cognitive, cultural, and moral qualities to candidates who had been admitted to such an institution, regardless of their actual performance once there. However, attendance at a super-elite university was insufficient for success in resume screens. Importing the logic of elite university admissions, firms performed a secondary resume screen on the status and intensity of candidates’ extracurricular accomplishments and leisure pursuits. I discuss these findings in terms of the changing nature of credentialism and stratification in higher education to suggest that participation in formalized extracurricular activities has become a new credential of moral character that has monetary conversion value in labor markets.
https://taxprof.typepad.com/taxprof_blog/2011/01/only-graduates-of-top-5.html
Comments
Not to go all philosophical - what really is the best jobs? Most money does not always equal best.
Posted by: Liz | Jan 14, 2011 7:43:36 AM
The only thing that's changed is the recession has narrowed the criteria to the top 5. The people in 6 to 10 have noticed what has been a reality for the rest of us mongrels since "Personnel" became "Human Resources".
Posted by: Jerry | Jan 14, 2011 3:57:42 AM
"Are the authors suggesting that the market is somehow failing to select for the best candidates?"
Two of the three industries mentioned, law firms and banking, hardly quality as "the market" any longer. Law firms exist as a business only because the (government) courts can compell you to respond to lawsuits, and more significantly compell you to operate according to their rules, which the law firms essentially sell access to. If the government mandated everyone buy buggy whips, and buy them from government-approved buggywhip makers, the buggy whip industry wouldn't be much of a free market. Law firms are the same way.
Banking isn't a free market enterprise anymore either, considering that banks have gone hat-in-hand to the government for a bailout. Absent government intervention, most of the banks hiring Ivy Leaguers would have gone belly-up in the last two years and those Ivy League mediocrities would be out of a job with no one interested in hiring such spectacular failures.
Now, I'm not necessarily saying we should do away with courts or that the bailout shouldn't have happened (though I do think we should reduce the power of courts and think the damage of bailing the banks out might be worse than the damage letting them fail would have caused). But the key point is, these are industries where results are not all that important any more, so the critical element of feedback is missing. Markets can't work without feedback. Government intervention removes feedback.
So this isn't a case of market failure. It's a case of, basically, Crony Capitalism.
Posted by: JMH | Jan 13, 2011 10:35:08 PM
Eagle asked:
"Are the authors suggesting that the market is somehow failing to select for the best candidates?
This sounds like the screed of some marxist public sector academics."
Note a condition markets need to work. They need a flow of accurate information. That is not available on the subjects of competence and class in academia. Indeed, it seldom has been, completely. Both customers and "elite" hiring officials are likely to get their first information about who is most worth doing business with from the same sources-academic sources.
They are often unable to break free of the academic focus on class and credentials after schooling is done. In such case, neither will have the information needed to participate competently in a market for competent legal services, investment, or much else. Once that becomes sufficiently generalized throughout an industry, people cease questioning those assumptions. Eventually, questioning those assumptions becomes a threat to those already at the top of a corporate hierarchy, who were themselves selected under the class and credentialism criteria. At that point, it becomes worth the job of a Human Resources officer to suggest breaking the pattern.
When the information in the market networks for housing finance began to be poisoned by requirements of the Community Reinvestment Act, it took 30 years for those networks to collapse, but it happened. It is not surprising that we are seeing similar results in investment and legal services industries to what we were seeing in finance by 2004.
Markets only work when their information is not poisoned, and academia has had growing incentive to poison the information flows in business since gramscian political strategies became a new norm in the 1970s. In less direct ways, such influence towards business has always been there, given the attitudes academia has had towards business since its beginnings in Medieval Europe.
Posted by: Tom Billings | Jan 13, 2011 7:57:30 PM
This goes a long way toward explaining the economic performance of the US over the last 5 years.
Dude, this didn't start 5 years ago.
Posted by: snork | Jan 13, 2011 7:33:22 PM
I'd like to see the company list as I'd expect they're not in the midst of transformation, but rather are coasting in neutral, recruiting "kids born on third base thinking they hit a triple."
As an enterprise risk professional who created and oversees a program for a global financial corporation, my background, that of my peers, senior executives and my team is more akin to Rudolph's Island of Misfit Toys than any pedigree puppy mill. We certainly encounter a sufficient amount of those cookie cutter folks with our audit firms -- the PWCs, E&Y, KPMG, etc. -- but they're all static specialists we bring in to examine a fixed aspect. None have the complexity management skills and multidisciplinary expertise to transform in highly volatile, extreme velocity and exceptionally political environments. We've certainly hired a few, but they burn out and flee within a year.
It's my somewhat anthropic perspective that an over-optimized educational program that emphasizes compliance to a rigid, narrow norm in order to stamp out a continuous, predictable product from the academic institution, tends to fail. It neither delivers adaptive, creative professionals capable of architecting and managing through chaos, nor does it develop the necessary epistemological orientation to recognize the various structural centerings in the metaphysical traditions inherent within the modern corporation. Transcending to global enterprises increasingly requires cognition of post-structural and post-modern thought, but the traditional elite institutional regime has become increasingly associated with a bastion of the defense of modernity's institutional legacy.
Posted by: Risk Perspective | Jan 13, 2011 7:30:27 PM
That's funny, because there's a fatuous piece by Michael Medved in today's WSJ about how people from fancy schools deserve to rule, and people from second tier universities like Sarah Palin should accept their natural inferiority.
Posted by: y81 | Jan 13, 2011 6:45:08 PM
The article strikes me as curiously provincial. I suppose if one lives on the east coast and desires to stay there, it would be relevant. But, for the vast majority of the country it doesn't seem to have much application, and I suspect much of the salutary effect of having attended these super-elite schools comes down to geography. I'm not sure one get as much mileage from such a diploma in, say, Denver.
Posted by: Dana | Jan 13, 2011 6:42:05 PM
Some of it is undoubtedly snobbery. But some of it is also probably CYA on the part of the hiring managers. "How was I supposed to know he'd turn out to be such a total flop? He went to Harvard!"
Hiring via super-elite status *seems* so much more objective, and less time-consuming, than doing the often considerable work of fine-tooth-coming resumes and scheduling extra interviews.
Posted by: sal | Jan 13, 2011 6:34:30 PM
However, it was not the content of education that elite employers valued but rather its prestige.
This would be tolerable if the upper castes were doing a great job on behalf of the overall society. Needless to say...
The growth of anti-intellectual populist politics is alarming in this technology-based 21st century country, but some of the reasons for it are legitimate.
Posted by: gs | Jan 13, 2011 6:07:54 PM
Are the authors suggesting that the market is somehow failing to select for the best candidates?
This sounds like the screed of some marxist public sector academics.
Posted by: aynonymous | Jan 13, 2011 5:55:42 PM
The corelation between the most successful entrepreneurs, and an Ivy League degree pedigree, is rather small.
Posted by: Eagle | Jan 13, 2011 5:49:04 PM
"the ridiculously narrow-minded people who make hiring decisions at the aforementioned elite companies"
I have no doubt that this is true. Er... now, what shall we do about the ridiculously narrow-minded admissions officials at the aforementioned elite schools?
Posted by: Mister Snitch | Jan 13, 2011 5:43:37 PM
Jobs are passe in the new, collective America. Now we all are helpless, so we turn to the government for our wants. (Needs, too, are passe.)
Why grow up?
Why work?
Who needs freedom?
After all, most everyone else seems to be doing better than Americans. Just read the mainstream media, if you doubt.
Posted by: PacRim Jim | Jan 13, 2011 5:34:05 PM
This goes a long way toward explaining the economic performance of the US over the last 5 years.
Posted by: MikeC | Jan 13, 2011 5:33:14 PM
I think the real story is why the process is setup this way. This type of recruiting is a recipe for massive fail in a sector where the it is easier to define a concept of merit. Its worth noting that very few, if any, of the biggest tech entrepreneurs of the last two decades went to the "right" schools. Merit is easier to define in the technology. You can either build a better search engine or you can't. You can either design a faster process or you can't.
Law and business sell images, more so than expertise. When you go to work in these environments, you're real job is to bring in clients. Since clients are essentially clueless on matters in these fields, and have no way of figuring if they are indeed getting high quality service, the ability to impress clients and make the sale is what these firms prize. Until clients stop going gaga over an AB from Harvard, don't expect things to change. Nor should it.
Posted by: Nolo Contendre | Jan 13, 2011 10:29:50 AM
This actually makes sense as the firms are "buying" relationships. If you look at the people who can afford to go to these schools it is statistically significant that they come from families who have relationships with large companies or large net worth-and they are generally more intelligent and they are hard workers- hence you get the "complete package". Now you may hear about the 'disadvantaged" student who makes it into these schools, but it is difficult for them to obtain these jobs and they end up working for some social cause firm in Chicago-even if they were law review-sometimes these anaomolies even make to to become President of the U.S.-a lower paid job.
Posted by: Nick Paleveda MBA J.D. LL.M | Jan 14, 2011 8:10:13 AM