Where you went to college doesn't matter. This is why. 

Graduating students of the City College of New York sit together in their caps and gowns as they listen to U.S. first lady Michelle Obama's address during the College's commencement ceremony in the Harlem section of Manhattan, New York, U.S., June 3, 2016. REUTERS/Mike Segar - RTX2FKNP

Ivy League grads do better than anyone else, but going to an Ivy League school isn't the reason why. Image: REUTERS/Mike Segar

Shana Lebowitz
Strategy Reporter, Business Insider
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On the whole, Harvard grads make more money and land better jobs than students who graduate from, say, your average state school.

After all, they go through a uniquely rigorous academic program and are educated by some of the finest scholars in the world — they're pretty much primed for success.

Except that's not actually how things work.

The reason Ivy-League grads generally do better than state-school grads isn't because of their Ivy League education. It's because they're smarter and more talented than the rest of us — and that's why they were admitted to the Ivy League in the first place.

Seth Stephens-Davidowitz, a former Google data scientist and Harvard-trained economist (of course) outlines this idea in his new book, "Everybody Lies." The book explores the myriad uses of Big Data — from anonymized Google searches to the language people use on first dates — and what it reveals about human behavior.

My mind was blown when I reached the point in "Everybody Lies" where Stephens-Davidowitz explained that where you go to college doesn't matter — partly because the science behind it is so simple and partly because this is hardly a new finding.

Stephens-Davidowitz points to a 2002 paper by Stacy Dale at Mathematica Policy Research and Princeton University's Alan B. Krueger, which found that elite colleges "tend to accept students with higher earnings capacity."

As Stephens-Davidowitz explains in the book, the researchers looked at data on thousands of high-school students: where they applied to college, where they were accepted to college, where they attended college, their family background, and their income as adults. They looked specifically at the 1995 earnings of people who were college freshmen in 1976.

Here's the simple-but-brilliant part: As Stephens-Davidowitz explains, the researchers "compared students with similar backgrounds who were accepted by the same schools but chose different ones. Some students who got into Harvard attended Penn State … These students, in other words, were just as talented, according to admissions committees, as those who went to Harvard. But they had different educational experiences."

As it turns out, those two groups of students wound up with similar incomes later in life.

In 2011, the researchers studied an even larger sample — looking at the 2007 earnings of about 19,000 adults who were freshmen in 1989 — and produced similar results.

These findings are perfect examples of wannabe scientists' favorite aphorism: Correlation doesn't equal causation.

In other words: Yes, Ivy League grads do better than anyone else, but going to an Ivy League school isn't the reason why. There's a third factor — how smart and talented they are to begin with — that explains the outcome.

Or, as Stephens-Davidowitz put it in the interview with Business Insider, students at elite universities "tend to be more talented. It's not because the school added anything to them."

Interestingly, however, the research found that students from low-income backgrounds did tend to benefit from attending an elite university, suggesting that "your choice of college doesn't matter" isn't a blanket statement.

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