Family is destiny - evidence from college admissions in the US

I have blogged many times on the ovarian lottery, the disproportionate importance of family connections in determining life outcomes. Family is destiny.

Raj Chetty, David Deming, and John Friedman have just released a new Opportunity Insights study (pdf here and NYT illustration here) using college admissions data from 1999 to 2015 from 12 elite colleges (Ivy League, MIT, Duke, U Chicago, and Stanford) that illustrate the outsized nature of preferential treatment that children of alumni (legacy applicants) enjoy in Ivy League undergraduate admissions. The authors used detailed anonymised internal admissions assessments data, SAT and ACT scores, and incomes of parents and post-graduation incomes of students. A summary of their findings

Children from families in the top 1% are more than twice as likely to attend an Ivy-Plus college as those from middle-class families with comparable SAT/ACT scores. Two-thirds of this gap is due to higher admissions rates for students with comparable test scores from high-income families; the remaining third is due to differences in rates of application and matriculation. In contrast, children from high-income families have no admissions advantage at flagship public colleges. 

The high-income admissions advantage at private colleges is driven by three factors: (1) preferences for children of alumni, (2) weight placed on non-academic credentials, which tend to be stronger for students applying from private high schools that have affluent student bodies, and (3) recruitment of athletes, who tend to come from higher-income families... we show that attending an Ivy-Plus college instead of the average highly selective public flagship institution increases students’ chances of reaching the top 1% of the earnings distribution by 60%, nearly doubles their chances of attending an elite graduate school, and triples their chances of working at a prestigious firm. Ivy-Plus colleges have much smaller causal effects on average earnings... Adjusting for the value-added of the colleges that students attend, the three key factors that give children from high-income families an admissions advantage are uncorrelated or negatively correlated with post-college outcomes, whereas SAT/ACT scores and academic credentials are highly predictive of post-college success. 

We conclude that... highly selective private colleges serve as gateways to the upper echelons of society in the United States. Because these colleges currently admit students from high-income families at substantially higher rates than students from lower-income families with comparable academic credentials, they perpetuate privilege across generations.

The graphic below captures the admissions advantage enjoyed by legacy students

That the legacy status is large is borne out by the finding that the legacy advantage enjoyed over other non-legacy applicants is much higher than the same students' admission prospects in other elite colleges 

They also compared legacies’ chance of admission at the colleges their parents attended versus similarly elite schools. They found that they were slightly more likely to get in to the other colleges than applicants with the same test scores. But that was dwarfed by the advantage they got at the school their parents attended.

The study goes further and examined the income tax records of graduates of these colleges and analysed their post-college outcomes. 

They estimated that legacy students were no more likely than other graduates to make it into the top 1 percent of earners, attend an elite graduate school or work at a prestigious firm. If anything, they were slightly less likely to do so.

Needless to say, legacy students are more likely to be white and more likely to come from rich families. The study found that even among the legacies, the richest had an advantage. One in six Ivy League students has parents in the top 1%.

The legacy status builds on an already entrenched advantage arising from these students having access to much superior schooling, tuition, coaching, exposure and so on. Unsurprisingly, the study finds that even without legacy status, these students would still be about 33% more likely to be admitted than applicants with the same test scores, based on all their other qualifications. In fact, even without legacy, family wealth already has a stunning relationship with elite college admissions.  

The study looks at the non-academic credentials like extracurricular activities, internships, volunteering, recommendations etc of students admitted to these colleges.

The academic ratings of richer students didn’t vary much from other students with the same test scores. But richer students were vastly more likely to earn high marks on nonacademic measures like extracurricular activities and recommendation letters... At one of the colleges that shared admissions data, students from the top 0.1 percent were 1.5 times as likely to have high nonacademic ratings as those from the middle class... The biggest contributor was that admissions committees gave higher scores to students from private, nonreligious high schools. They were twice as likely to be admitted as similar students — those with the same SAT scores, race, gender and parental income — from public schools in high-income neighborhoods. A major factor was recommendations from guidance counselors and teachers at private high schools... Recommendation letters from private school counselors are notoriously flowery... and the counselors call admissions officers about certain students... Nobody’s calling on behalf of a middle- or lower-income student. Most of the public school counselors don’t even know these calls exist.

Even after adjusting for higher SAT scores, finely honed resumes, higher application rates etc, they were still over-represented. 

For applicants with the same SAT or ACT score, children from families in the top 1 percent were 34 percent more likely to be admitted than the average applicant, and those from the top 0.1 percent were more than twice as likely to get in.

The new data shows that among students with the same test scores, the colleges gave preference to the children of alumni and to recruited athletes, and gave children from private schools higher nonacademic ratings. The result is the clearest picture yet of how America’s elite colleges perpetuate the intergenerational transfer of wealth and opportunity... In effect, the study shows, these policies amounted to affirmative action for the children of the 1 percent, whose parents earn more than $611,000 a year.

The study finds that the elite nine flagship public universities were much more equitable. 

At places like the University of Texas at Austin and the University of Virginia, applicants with high-income parents were no more likely to be admitted than lower-income applicants with comparable scores.

The paper points to the share of individuals who attended Ivy-Plus colleges in leadership positions across different realms. Though these twelve colleges made up less than 1% of all college admissions in the US, their dominance is widely present across leadership positions.

The striking statistic is the dominance of Ivy graduates in public service leadership positions. About three in four US Supreme Court judges graduated from Ivy Pls colleges! In simple terms, the influential positions that inform public issues have vastly disproportionate representation of Ivy-plus graduates. 

One of the authors, Raj Chetty, captured the findings best

“Are these highly selective private colleges in America taking kids from very high-income, influential families and basically channeling them to remain at the top in the next generation? Flipping that question on its head, could we potentially diversify who’s in a position of leadership in our society by changing who is admitted?”

This Mathew Effect has two implications - wealth begets wealth, and also wealth shuts out the rest. To borrow Peter Turchin's framework in his latest book, End Times, the former leads to elite overproduction and the latter leads to mass immiseration. At a macro-level, the former is a dynamic of capitalism, especially the modern globalised economy with its economies of scale and knowledge-based sectors with their network effects. And the latter is accentuated by the elite capture of the establishment and the rules -making process. As I have blogged on several occasions, it's this latter dynamic that's the most disturbing aspect of modern capitalism - Big Tech and Wall Street invariably end up capturing the rules-making process and corroding the social contract. 

Most of the disturbing economic, social and political trends we see today across the world have these two factors as important contributors. The rise of populism and widening inequality threatens to destroy the social fabric and usher in the crisis that the likes of Turchin and Neil Howe write about. 

Instead of their mindless and almost unconstrained pursuit of market capitalisation, executive compensation, profits maximisation, tax reduction and avoidance, deregulation, efficiency maximisation, automation, technology led lifestyles, union busting, etc elites need to realise that the ship is entering very stormy waters and could sink. Karl Marx may turn out to have the last laugh, if only a few decades late. 

Update 1 (05.08.2023)

From David Brooks

A 2018 study found that more than 50 percent of the staff writers at the beloved New York Times and The Wall Street Journal attended one of the 29 most elite universities in the nation.