Putnam

SAIS probably should include the range of salaries. Stating the median just indicates that half of those reporting receive more than $63,000. Why should Revolution have a problem with his/her significant experience in a niche area of finance? Revolution seems to be willing to take on that debt for a salary of around $95,000, perhaps Revolution is making significantly less than $85,000 now, but more than $50,000. This is just speculation, back of the envelope calculations. However, it seems Revolution is willing to take SAIS level of debt and the opportunity cost of attending grad school for two years in order to secure an income of $95,000. Maybe Revolution would be willing to take $85,000 today. Anyway, a similar scenario could be realized by going to any b-school in the top 30, dependent of course on funding. All of those schools have an average salary of over $100,000. The comparison would be easier to make if SAIS reported average salary, since the average may be higher than the median. However, it may be a reasonable assumption to make that the average salary is significantly less at SAIS than at a top 30 b-school. If indeed Revolution is as high caliber an applicant as he/she believes himself/herself to be, then Revolution could conceivably receive significant funding from a program outside the top 10~12. Obviously the downside is that it will be extremely hard to get a job at a bulge bracket much less private equity. I would also like to point out that there is a typo in one of Revolution’s posts: “I'm hoping that i could come out of sais or hks with a much higher median salary.” I assume you are hoping to receive a salary significantly over the median at SAIS and HKS. You can’t receive a “higher median salary,” since the median is the median of a sample distribution.

1. Actually you are correct on point one, I meant to write H/S/W (Harvard, Stanford, Wharton) rather than HSPY. Perhaps that is just reflex. 2. You are incorrect. The School of General Studies has a traditional admissions process, admittance stands at 23% now. The Extension School has an admissions process, which is similar to matriculation in that you must demonstrate you can do the work. This is separate from open enrollment. You have not demonstrated you understand selection from attrition. If indeed Harvard Extension students can do the work and graduate (it seems relatively few graduate) on top of their other responsibilities, they should be attributed the respect they deserve. Unless of course the point of an elite education is not the rigor of the curriculum but simply being selected. 3. Being on financial aid means very little in the context of the Ivy League. Years ago Larry Summers noted that three quarters of students at selective institutions come from the top quartile of the income distribution, and only 9% come from the bottom two quartiles (bottom half). This number today is even more skewed at Harvard (you can look it up). Elite institutions like to refer to these families in the top quartile as upper/middle incomes. These students get significant financial aid. Household incomes above $120,000 may not seem significant to some, but that is significantly above the median. More than a standard deviation, and if you consider these aid packages are going to those with incomes up to $200,000 (depending on the school) that is +3 standard deviation. Do I overstate the representation of privileged whites at Ivy League school? No, I don't see how you make a compelling argument against my statements. Financial aid fails as an argument, because you do not seem to be familiar with the breakdown of family income in elite institutions nor do you seem familiar with their financial aid policies. Finally, you missed the pedigree argument, you are not seeing the bigger picture. Your statements at points 3 and 4 demonstrate you did not follow the argument, or are suffering from bounded rationality. You should really read more. You don't seem to be familiar with Lauren Rivera's study, "Ivies, Extracurricular and Exclusion: Elite Employers' Use of Educational Credentials." Nor are you familiar with the basic writings of Karabel, Kahlenberg, Golden, Unz. I was not necessarily arguing the caliber of student applying, rather whether this perception is warranted in the context of class and status. The GMAT/GRE argument is one I have noticed, it was an aside and probably irrelevant to this thread. But seeming as there has been a significant amount of irrelevance in this thread, we can suffer a little bit more. As an aside I do see this argument made GMAT superiority as a proxy for the caliber of quant skills, when really it shouldn't be. 5. You do not demonstrate you are up to speed with the current research on the finance sector and rent-seeking. The misallocation of human capital into finance is not a normative statement, you are just not familiar with the literature. If you did you would not have made you argument of: "Finance, when harnessed properly, is essential to managing risk and efficiently allocating capital in an uncertain world." Rigorous studies on hedge-fund and venture capital performance point towards a tremendous illusion of skill. You could effectively cap compensation and get the same effect, since the gains are not alpha and there is little to no indication performance is better than random. This is a legitimate argument, I don't just make this stuff up. I don't know where you get "liberal sanctimony," from. I didn't make a value judgement on the physics phd becoming a quant. I just said he/she gets paid well for relatively easy work (for him/her). Money is important, it's nice they have a venue to monetize their abilities. So for the record, you have stated that my post "reeks of inaccuracies and self-righteousness." There was one typo in point one. You need to do a better job of clarifying "self-righteousness." My statements on the hypothetical physics phd were not value judgments. However, I do find your assertion ironic in the context of your constant denigration of students who choose to attend policy programs.

While most of the threads on this board start out as informative they tend to devolve into arguments about prestige, which would be better suited to the 20 year old undergraduate wannabe bankers on Wall Street Oasis. Because of Harvard's huge endowment they poach talented faculty from other schools, which is fine of course, but arguments about faculty hierarchy probably should be made in the context that Harvard can outbid any other institution. In regards to the Harvard Extension School, it seems that most people misunderstand that institution. Also it seems that the posters on this board are unaware of types of selection. The posts above denigrate the Extension School admission policy, but do not seem to be aware that there is a difference between their degree programs and the larger mission of the school to provide educational access to the community. I am aware that the Extension School graduates a fraction of the Harvard College class. In the case of the Extension School, selection comes at the end, through attrition. Additionally, Extension students hold down full-time jobs and many have families. Harvard Law School also had similar a similar admission policy until the 1960's, they had a high attrition rate and low morale. Pre-selection is a more recent development, it is (or should be) more efficient, and is less likely to lead to the brutal competition that used to characterize Harvard Law. I have read comments of students and anonymous individuals also denigrate programs for non-traditional students at other selective institutions, like Columbia and UPenn. There seems to be strong interest for traditional students to denigrate the achievements of non-traditional students in order to protect their status. This can be seen in the debate about MOOCs as well. Ultimately it looks like a sort of academic rent-seeking, where students seek to protect their pedigree and prestige they gain by proxy on entry to a selective institution. I have seen proponents of HBS (usually potential students who wish to apply) denigrate HKS. Proponents of HBS and HLS denigrate all the other schools at Harvard. Proponents of Harvard College denigrate Harvard Extension, Columbia College > Columbia School of General Studies, HYPS b-school> the rest of the M7, M7 > non M7, non M7, but still top 10 > rest of the b-schools. However, this all assumes that the selection process is meritocratic. It has already been well documented that Harvard's holistic admissions process was instigated to decrease the enrollment of Jews starting in the 1920's. Currently the argument being made is that Asian Americans are the new Jews, the victims of admissions quotas. I assume most people on this board will take some statistics in grad school, and you will realize that these quotas are quite real. Ivy League holistic admissions also admit legacies, faculty children and athletes (in white privileged sports like crew) at a much higher rate than the typical candidate despite having lesser academic credentials on average. The last year Harvard was willing to publish the legacy admissions rate was 2003, it was 40%. It has been calculated that being legacy is equal to perhaps 120~130 points on the SAT, this is still much smaller than the boost given to minorities, but in the context of admissions legacies are given credit for being below average whereas minorities are given credit for being above average (relative to their respective socio-economic backgrounds). Unfortunately the boost goes away for legacies who apply for financial aid (1991). Which brings us the problem of alumni donations as a recruiting tool. This issue has also been heavily scrutinized. While not quid pro quo (well we would not know anyway), it is understood wealthy legacies will donate if their children are accepted. There is dispute whether if this practice was discontinued alumni would refuse to donate. Still it is questionable that tax payers should subsidize tax free donations when they are used to leverage admission for wealthy alumni children into elite institutions. Finally, when you take into account the spots taken up by legacies, athletes, and faculty children, the actual rate of admission for the spots left over is much, much smaller than the one published, one many times smaller than the admission rate offered to legacies, privileged athletes, and faculty children. I have not even included developmental admits. Maybe we can do away with the assumption that the U.S. system of higher education at elite universities is a meritocracy, and we can stop having this debate about the potential of hypothetical student bodies. While this deals with Ivy League admissions at the undergraduate level, holistic admissions and the same set of factors operate at the graduate level as well. Should prestige be an overriding concern? Maybe, since some HR department personnel at elite investment banks seem to be obsessed by it as evidenced by a study by Rivera. In that study HR personnel used Ivy League credentials as a proxy for brain power, however only if those Ivy League School happened to be Harvard, Princeton, or Yale. Rivera’s study has been disputed as being an extreme example, but it is still interesting. Interesting because considering holistic admissions, the goal is not simply horsepower. And in the case of legacies, athletes, and developmental admits it obviously is not. Harvard College likes to state that they reject many candidates with perfect SAT scores and perfect grades, though it has been surmised that many of these candidates are Asian Americans. They won’t release this information. The SAT may not be the perfect tool to measure talent and ability. However it does have a high correlation with g (general intelligence). The problem these days is that intensive parenting, tutoring, private schools, and test prep have gamed the system. At least in the case of minorities holistic admissions recognizes that SAT performance should be taken into context. A high SAT score from someone without all the trappings of privilege may be a strong indicator of ability. For the most part the value judgments of the HR personnel in Rivera’s study seem self-serving I cringed at the mba comparison in the SAIS thread, which did not take into account self-selection and adverse selection. One of the posters seems to be obsessed with selectivity, but assuming overlap, and the degree of it, is difficult. Fundamentally selectivity comes down to how many applicants there are relative to the how many can be enrolled. MBA programs also get a lot of applications from Indians in IT with monster GMATs (at least in the Quant section). Also not enough attention is given to pedigree. I would hypothesize a lot of people without the required pedigree also apply in large numbers to elite mba programs. They dream of becoming associates at a bulge bracket. M7 mba programs are dominated by former analysts at Goldman and consultants at McKinsey. They tend to be white and male, and Ivy League graduates. They are a large plurality at these programs, so large that there is intense intra-group competition. The cycle is self-reinforcing and self-perpetuated, privilege and pedigree will get you into a top Ivy, it will then get you into an elite Investment bank and/or consultancy, which will then get you into the M7. Admissions into selective universities may really be selection for wealth and privilege rather than academic potential, which is unfortunate because studies indicate those with the most to gain from elite institutions are those from minority and/or poor socio-economic backgrounds; those least likely to be admitted. One last issue that brought up in a few threads was the difference quantitative skills learned in elite policy programs and mba programs. Really, this is no big deal. The truly genius level quant giants are in pure math and theoretical physics. Neither the GMAT nor GRE has a high enough ceiling to challenge these individuals. Sometimes a theoretical physics phd will become a quant at a bank, where they can get paid big money for second rate (third rate?) quant work. Proponents of the GMAT (those who apply to mba programs) do denigrate the GRE, arguing that its quant section is too easy, that you are competing against humanities majors. Furthermore, they argue that the gotcha questions on the GMAT are indicative if superior intelligence. However for the GRE quant the competition are individuals applying to doctorate programs in engineering, math, and physics; therefore percentile rank is important. It is apparent from the top percentile that the ceiling is too low. But perhaps more importantly the assertion that somehow the GMAT quant is superior is self-serving when you consider how much, much, much harder the problems are in physics. The type of quantitative abilities that are needed for finance are run of the mill, there really is not any need for these individuals to pat themselves on the back. Finance benefits from massive rents that distort the entire economy and misallocation of talent; those quants (quants, not bankers) could do more beneficial work, except that the finance sector can provide massive salaries through its rent seeking and most discoveries in the hard sciences won’t be monetized.