How your alma mater affects your salary

The Wall Street Journal today had an article about a recent survey by PayScale Inc. on the salaries of college graduates from 300 major universities in the United States. The survey is unique for in addition to recording the starting salaries of recent graduates, it also measures the salaries of graduates who are currently in their mid-career (which it defines as 10 to 20 years post graduation). Schools are divided into four categories, liberal arts, state, party, and Ivy League and respondents do not include those who have gone on to receive a more advanced degree such as an MBA.

 

“Even though graduates from all types of schools increase their earnings throughout their careers, their incomes grow at almost the same rate, according to the survey. For instance, the median starting salary for Ivy Leaguers is 32% higher than that of liberal-arts college graduates -- and at 10 or more years into graduates' working lives, the spread is 34%, according to the survey.

 

One reason why Ivy Leaguers outpace their peers may be that they tend to choose roles where they're either managing or providing advice, says David Wise, a senior consultant at Hay Group Inc., a global management-consulting firm based in Philadelphia. By contrast, state-school graduates gravitate toward individual contributor and support roles. "Ivy Leaguers probably position themselves better for job opportunities that provide them with significant upside," says Mr. Wise , adding that this is the first survey he's seen that correlates school choice to a point later in a career.

 

Also, more Ivy League graduates go into finance roles than graduates of other schools, and employers pay a premium for them, says Peter Cappelli, a professor of management and director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. "Dartmouth kids get paid more for the same job than kids from Rutgers are [doing]," he says.”

 

One interesting finding is that how much a professional in his mid-career gets paid has less to do with his choice of undergraduate major but more to do the industry choice and career direction that he chooses to pursue.