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Where should you send your kid to college?
Attendance decisions are due May 1, so what should you do? If parents (and their children) are loaded with biases, is behavioral economics useful?
I suspect the core bias is parents wanting to feel they have done everything possible to help the kid, rather than maximizing the kid's (or the world's) expected return. This will lead parents to ignore the upsides of risky courses of action. Who wants to send the kid to the wrong school and feel guilty for the rest of your life? But if the school works out especially well -- your kid wins a Nobel Prize rather than your kid "merely" receiving tenure at an Ivy League school -- the parents are not so much happier. "More pride" is only a little better than "pride," and most of your kid's accomplishments you will overvalue and exaggerate anyway. So parents put too much stress on the possible downside and not enough weight on the potential upside of a choice.
If your kid is very smart and takes plenty of initiative, maybe you should send him to a large school with lots of resources. He will be able to hook up with the interesting people and they will have a better choice of peers. If your kid has true intellectual upside, those extra resources will yield a very high return. Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.
That being said, if you follow this advice you probably will regret it. It is not geared toward the median case or the modal case. Perhaps you already are upset at this blogger for suggesting that your kid should be a sacrificial lamb, offered up to the altar of scientific progress. Or perhaps you (and your kid) feel flattered.
Another view is that most people overestimate the intelligence of their kids. Too many parents obsess over Harvard when they should be wondering about Podunk U.. That point is well-taken, but being a fan of overoptimism, I find the first story more plausible. So look at the total endowment of the school, not the per capita endowment.
Your thoughts? Don't focus on general advice for parents, tell us what you think the relevant behavioral bias is, how to correct for it, and distinguish between returns for students, parents, and the broader world.
Posted by Tyler Cowen on April 24, 2006 at 06:25 AM in Education | Permalink
Comments
I think the general bias is to think that the school matters far more than the student does whereas, in fact, the reverse is true. We have studies showing that an Ivy League degree makes little or no difference vs State U when you compare matched kids (kids who go to an Ivy League school vs kids who were accepted at an Ivy League school but chose to attend State U instead). And yet these results seem to have made little dent on parental mania for the 'highest ranked schools'.
If your kid has true intellectual upside, those extra resources will yield a very high return. Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.
But does this case tell us anything? We would need to know what fraction of the top high school students attend HYP and what fraction of young 'stars' also attended HYP. Are HYP grads over-represented by this measure?
Posted by: Slocum at Apr 24, 2006 8:30:18 AM
It depends on what your kid wants to do. If he/she wants to work in a hotshot wall street or consulting job, he had better go for the more "prestigious" school.
Posted by: anon at Apr 24, 2006 8:34:40 AM
Hasn't Alan Kreuger already answered this with empirical data? Most of the students admitted to Harvard or Princeton are so intelligent enough that they would do equally well in lifetime earnings if they went to their local state schools. Thus, by revealed preferences, parents who know their kids are smart shouldn't care where they go to college; parents who think their kids aren't that smart should invest the most in trying to trick the Harvard admissions committee.
As far as returns for students, when I went to Princeton many of my fellow students expressed a preference for a school with a better male-female ratio (it was 60-40 at the time, but much closer to 50-50 today).
Posted by: DK at Apr 24, 2006 8:41:57 AM
On DK's comment on return to students, it reminds me of what my Ma told me about why she chose to go to Clemson: about a 7-1 male-female ratio and many of those guys were going to be engineers! Score! (There was a nursing school at Clemson - that was the program she was in. I'm guessing they had that there to attract women.)
And yes, she did get married to an EE major while she was at Clemson.
Posted by: meep at Apr 24, 2006 9:21:30 AM
I went to a top-ranked school for my undergraduate degree. If I could do it over again, I would attend a respectable state school. Although I made some wonderful friends there, and I think the school's reputation gets my foot in the door for job interviews, it also saddled me with large amounts of debt. And although I've not taken many courses elsewhere to make a valid comparison, I don't think the quality of instruction was that great on an absolute basis, not enough to warrant the premium I paid. In retrospect, I would prefer to have graduated debt-free and had greater flexibility to take on lower-paying but more interesting jobs.
Posted by: Christopher Rasch at Apr 24, 2006 9:27:01 AM
There are a few options I see for the bias:
The first is a bias towards comparative status in the community. Nobody wants to sends their kids to a worse school than the other parents have sent their kids. If parents feel that by applying to a school with a great name, but that not might be a fit for their kid, they still may encourage their kids to go there. I have heard/seen that these is particularly strong in the Chinese-American community. The goal is simply the best name.
There are also likely differing biases between a set of parents. The father will most likely want to engage in the status game, but the mother will want to engage in the status game AND keep her kid relatively close to home. The bias for mothers might be the best school that will keep their kids within distance, so maybe maximizing the Utility function USNews*MilesAway, thought I'm not sure if they're both linear.
In general, the bias seems towards sending kids to a school where they are below the 50th percentile, the "reach" schools that guidance counselor's talk about so much. However, maybe the correct course of action for parents should be to send their kids to the school where their kids will be in the 50th-75th percentile. Challenged but good. Obviously this can't work for everybody.
Posted by: Joel W at Apr 24, 2006 9:40:24 AM
There are three issues here that are important. The first is what value does attendance at a prestigious Ivy League college impute to a student? There is plenty of evidence that many experiences in the most prestigious colleges and universities offer little extra. But then you compare that to "Podunk U" and the result may also be true. A student who goes to a large public university may be stuck in a position of having large classes at the beginning level which will probably mean a requirement for a lot of self motivated study. I think a lot depends here on a) the energy and motivation of the kid and b) the intended major. There are lots of good alternatives that the college search may miss.
Second, is the motivations of the parents. As noted above, a lot of parents concentrate on trying to get into the most prestigious/visible institution while there are substantial alternatives right out of the field of vision - both in terms of net cost and in quality. I recommend that families begin to take their kids on college campuses about the time they come to high school (as a part of vacations) - let the kids describe what they like and dislike about the alternatives they see.
Finally, one should look at the intended career and venue. Once, an overwhelming percentage of corporate lawyers went to a couple of institutions - one has to think about the variety of alternatives in both schools and venues now because while the biggest law firms in the East still pick from a couple of places - the financial markets are not stuck in one city. That is true for a lot of other professions also. This suggests one supplemental point. There are some outstanding opportunities outside the US, if a student masters another language. In a real sense both at the undergraduate and graduate levels parents should widen their horizons to encourage their kids to look outside the US - at least for a study abroad opportunity which is more than drinking beer and speaking English. English may be the language of commerce today but a second language is a mighty part of one's arsenal.
Posted by: drtaxsacto at Apr 24, 2006 9:42:32 AM
The biggest issue here is cost. How long would it take you to pay off the loans to attend a prestige university versus a public university with less of a name? Is the long-term salary difference high enough to offset the initial cost?
Also, what are the student's long-term plans? Is graduate school a consideration? Is it better to pay less for a BA from a less prestigious school and then have money for the MA from Harvard?
Posted by: Ted Craig at Apr 24, 2006 9:42:33 AM
In some respects the student's choice of major is important. If he or she is going to be studying a highly marketable subject, for example nursing or electrical engineering, the university's status probably doesn't make a huge difference and a less-expensive state school will work fine. A student planning on a less-marketable major such as liberal arts might be better off going to the best possible university, however, as anything that will give an edge is important.
Of course, all this is complicated by the fact that many students enter college unsure about their majors and sometimes change their plans.
Posted by: Peter at Apr 24, 2006 9:53:49 AM
A few years ago I wrote an article looking at this question (without the behavioral aspects) which offers an overview of several economists' thinking. There are some very sharp differences (between Krueger and Hoxby, for instance), making a clear-cut choice difficult. You can read the text at http://forums.yellowworld.org/showthread.php?t=2228. It was originally written for MSN but they've since taken it down.
Posted by: Dan at Apr 24, 2006 10:06:14 AM
Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.
Maybe I'm just a liberal arts college fuddy-duddy, but I think that things like the quality of the character you develop make an actual difference in your lifetime income. Most of the people I know that are in positions of power didn't get there simply by being more intelligent, but by being more effective people than those around them. Perhaps its true that Harvard better prepares its exceptional graduates in that respect, but I would suspect that when you say the words "better undergraduate education," what you're really referring to is the non-exceptional graduate. The access to resources at a liberal arts college, both academic and personal, is part of the package that is supposed to ensure a top quality education for all students, not merely the few exceptional ones that are able to make connections and procure access at universities.
If this is the case, then shouldn't risk-averse folks be choosing liberal arts colleges, and shouldn't folks that believe they will rise to the top be going to Harvard? One answer is that people are not, in general, risk averse (aka Harvard actually offers a better education and/or quality of character doesn't actually
I suspect that the real problem is more akin to information asymmetry. Look at the student populations of top liberal arts colleges; they have a disproportionate number of children of other schools' faculty. Anyone who believes that information asymmetries don't exist in higher education choice should look at liberal arts college data over time. Have the schools actually gotten that much relatively better over time? Of course not.
One problem I think you may run into is that students at different schools don't necessarily measure success in the same way. If you judged Carleton by the first jobs of its graduates, it would do quite poorly. People here do not, in general, take their first jobs very seriously, moreso than at other Liberal Arts Colleges in fact. That is, no doubt, at some detriment to their lifetime incomes, but in general, their career choices are moreso. However, few Carleton graduates that I have met do not consider themselves successful in whatever it is that they decided to do with themselves.
Posted by: Lee at Apr 24, 2006 10:15:28 AM
Whatever happened to students choosing their own career/college? Are we responsible for our children forever? Raise a child to make their own decisions and let them choose the college for themselves. (From a noneconomist parent).
Posted by: ciwood at Apr 24, 2006 10:34:30 AM
We have a Junior heading into the process now. There are SO many competing influences.
1. The kid - bright but not brilliant. Comparing self with kids from the same private school the past 2 years -- could get in almost anywhere. From his view:
NOT applying to Yale - the brilliant kids go there
Lusting for Penn - a couple kids each year of similar "smarts" go there and do well.
Overall - wants to succeed at college and be happy. Presumes rural schools will be boring. Annoyed by the boost dumb legacy kids get.
2. Guidance counselors - college is a match to be made not a trophy to be won.
3. Parents - Want to figure out what is best for their kid with too little experience. Sense that education received is a component but that Brand Name is also a component.
Also recognize that the top kids in any group/classroom are likely to get more attention from the professors (or team coaches) thus wonder "is a school like Yale nearly as good for a kid who might enter in the bottom half..."
Lots of parental peer pressure at cocktail parties...
4. My own experience. Some of the brightest kids where I went to school had been accepted at MIT, Yale and Harvard. Had I been accepted I would have gone so I asked how they made their choice. One came to my school for a much better financial package, another kid came because he knew he would need an advanced degree and wanted to graduate at the top of a great school and go to Harvard for the advanced degree. He figured he might not get into Harvard grad school if he graduated in the lower half of MIT as an undergrad. The third came to be closer to home.
Posted by: Anonymoose at Apr 24, 2006 10:49:08 AM
As someone who's less than five years removed from college and doing fantastically in my field (software development, after majoring in computer science), I offer this advice -
- Let her know that networking, learning how to learn and learning how to deal with pressure are far more important than any piece of knowledge she'll acquire in a given field.
- Go cheap. If you've got scads of cash or he's getting scholarships, let him choose the prestigious school. But don't let him get $100k in debt because he thinks he has to go to Stanford to do well in life! I could have done that, but went to San Diego State instead. Five years later, I'm not only very successful but I'm debt free as well.
- Let her choose where she goes! This is her life and she needs to live it. Don't get mad if she wants to take a semester off and do Europe. But make her pay for it! There's nothing worse than a bankrolled brat, for the world and for her.
Posted by: jon o at Apr 24, 2006 11:00:03 AM
I agree with jon o that the student should be made to bear some of the costs of an expensive choice. But at the end of the day, "fit" is very important. A cold-blooded careerist will want to go to the most highly-ranked school where he can do well with ease. A party animal will want to go where she can play.
But a studious, highly motivated and exceptional student will now have to decide between the strengths of a large, perhaps impersonal school vs a small, academically intense university or liberal arts college.
Having attended a small, academically intense and highly renowned research institution, I can see the costs and benefits of different choices. In my view, the best argument for some elite undergrad institutions is the possibility of being surrounded by outstanding students and knowing that there is no academic tail in the school -- or even of finding out that you are in it. You are always being challenged and hard work breeds a camaraderie and esprit d'ecole that a more-smorgasbord style state university experience will not do for everyone. I valued being in a school where no one was admitted on athletic scholarships and all varsity players were not much different from the average student. This is not true at all elite universities. Many LACs are like this as well. But I also valued being tested against the best in the world at an early age, even or perhaps especially, when I failed.
Someone else may value the exact opposite. But I think it makes the point. Where you want to go to school very much depends on what you want out of it.
Posted by: john N at Apr 24, 2006 11:27:34 AM
I would suggest not forgetting a review of the m/f ratio. An average college has more top-flight women these days than men. This has a negative impact on the dating scene for women, I suspect. This makes a difference for Dads sending daughters to college.
Good dating experiences for m or f probably have a non-trivial impact on good mate selection and good long-term stability and happiness in the home.
Other things equal, it might be best to pick a college that makes an effort to keep the m/f ratio from getting too skewed in either direction (or slightly skewed in favor of the sex of your child).
Another seldon-mentioned factor to consider is whether the student has and can use a car. That might incline one to a Duke (where a car can be used to go to mountains for outdoor recreation over spring break, etc.) over a Brown or Penn.
Money package makes a huge difference - Penn or Brown or Duke or UCLA or Cal can offer great education for a motivated student. If Cal or UCLA said free ride, Duke said 1/2 ride (effectively), Penn said 1/3 ride, and Brown said 1/4 ride, Duke looks like the logical choice.
Cal and UCLA are a bit too big and impersonal. Duke and Penn can provide equivalent education quality. Brown looks a bit out of the mainstream to the left.
In judging financial aid packages, one key variable is how the schools treat the study abroad ideas. Duke is need-blind even if the student is heading off to Dublin for a semester, after Duke in NYC for a semester, after Duke in Mexico for a summer. Not sure Penn or Brown or Cal or UCLA would take that approach.
If parents know the cost will stay the same (including airfares) even if student heads off to Mexico, New Zealand, NYC, Singapore, Dublin, etc., the likelihood of experiences of education abroad go up significantly. (particularly if the student has siblings).
Punting and saying that the kid alone selects the college makes sense only if the kid alone is paying. Otherwise, the kid is the requester of family funds, the grant applicant, not the final shot-caller. This seems particularly important if the student has siblings.
Posted by: cfw at Apr 24, 2006 11:48:03 AM
Lee -
"Look at the student populations of top liberal arts colleges; they have a disproportionate number of children of other schools' faculty. Anyone who believes that information asymmetries don't exist in higher education choice should look at liberal arts college data over time."
I would love to see those data, especially since that first sentence is one of the more provocative things that I, as the parent of a HS junior who is very interested in the small to medium-sized liberal arts colleges, have read this year. Could you point me to a source?
Thanks!
Posted by: johnshade at Apr 24, 2006 11:48:25 AM
If all else fails, how about asking the child what she might want?
Posted by: Bill Gardner at Apr 24, 2006 12:24:55 PM
It depends on the student's abilities and interests. At the highest level of intellect, students can get better grades by actually learning the material at elite schools (where actual learning is demanded) than by memorizing as the less demanding schools generally require.
Debt matters little compared to the differences in income associated with our increasingly stratified society.
Posted by: michael vassar at Apr 24, 2006 12:25:02 PM
1)If you know you want to go to graduate school (specifically law school) then it seems to me that it doesn't really pay to go to an expensive undergraduate intitution. It matters a lot where you go to grad school, but doesn't matter very much where you go undergrad(unless you want to work on wall street).
2)Part of the reason so many kids choose to go to Ivy League colleges is that they don't internalize the cost. A huge percentage of the students at Ivy League colleges have their entire tuition paid by their parents. Perhaps if their parents instead offered them a choice b/w the cash and a public school education or private school tuition the kids would think about this a little more.
3) I went to an Ivy League college and in my opinion a large part of the value was in the connections I made. Even if the education was only marginally better than I would have received at a far cheaper state institution, there is tremendous value in meeting a disproportionate number of people who are the future leaders of the business world.
Posted by: robby at Apr 24, 2006 12:48:54 PM
One point of yours no one has commented on: Returns for the broader world.
If the value of schools is sorting and signalling, then not enough of it is being done. Grade inflation works to the advantage of the top schools, since a "lucky" student who gets into an elite and gets a B average can "pass" for a more academically talented student.
From the standpoint of global welfare, it would be great if all students were ranked on a universal scale [We will ignore the practical impossibility of doing so.] so that we could say for certain that a C+ from Chicago equals an A minus from NE Podunk U. But absent a reliable 3rd party testing authority, both students and elite schools have incentives to produce a corrupted signal.
Also, are we better off with most of the best students in a handful of great schools instead of spread out to all the colleges? My gut says yes, but that's another debate entirely.
Posted by: john N at Apr 24, 2006 2:04:30 PM
My background: I teach at a junior prep school which sends most of its graduates to highly regarded New England prep schools (a process quite similar to college admission), and I spend a lot of time helping high school students in an internet community dedicated to college choices, so I think I am well-acquainted with at least the wealthy suburban outlook on this.
Parents tend to overestimate the abilities of their children, not just in terms of intellect but also in terms of work habits and maturity. Part of this is not having a large number of comparisons with which they are adequately familiar; part of this is natural love-is-blindness. More on this later.
Students tend to overestimate, *radically*, the value of name. When I was teaching SAT prep the other summer, I had students use a web site that took their grades, interests, etc. and spit out a list of safeties, reaches, and matches. Students were *irate* when these lists did not match the ones they had already generated -- lists cobbled together out of US News rankings and the trendy schools among their classmates. (Did you know there are only about 20 good colleges in the country? Any high school senior could tell you.) They were generally highly resistant to investigating good match colleges they had not already heard of -- even if these schools were, by any reasonable measure, just as good as the schools they had heard of. (Examples would be the good Midwestern LACs -- places like Grinnell or Macalester -- fabulous schools that just don't have the cachet of, say, Middlebury (which is very trendy).) And they were practically allergic to investigating safeties. It's rare that you can find a high schooler in my demographic who has any kind of reasonable set of safeties, or who doesn't have five or so of the elite, trendy reach schools. (Unfortunately, this means those schools get even more selective as they reject a higher percentage of their applicants, many of whom weren't even qualified, so they get higher US News rankings, so they get more trendy...)
Finally, kids and parents both are alarmingly focused on credentials. At my school, many parents want their students to be placed into honors courses, even if their kids would be overwhelmed and flailing in them, because honors courses Look Better on the resume. (The kid's actual understanding of the material or self-confidence? Not, apparently, so important.) This relates to parents' overestimating their kids in a way...it's more like parents don't even consider their kids' aptitudes, but just assume they ought to be in the honors course because it looks best. I think a very similar factor is going on (especially in certain socioeconomic or ethnic communities) concerning college selection. If Harvard (or wherever) is the best school, the thinking goes, it must be the best for their kid. This is, of course, baloney.
(There's also an enormous competitive component to it in some social circles. I mean, heaven forbid that *your* kid only went to, say, Harvey Mudd when Mrs. Smith's kid went to Princeton. (I choose Harvey Mudd because I went there, preferring the good fit to the big name (though its reputation has grown since I was there), and I continue to vastly prefer it to Princeton, which is why I am picking on it in my example.))
Finally, in terms of credentials, kids are much more credential-focused than they were when I was applying (not so *very* long ago, if no doubt Stone Age as far as my students are concerned!). Vast numbers of kids assume they are going to grad school, I guess on the theory that if one degree is good two are better?, without apparent knowledge of which fields benefit from graduate study, or their own suitability for it. Vast numbers of kids start their college search by saying "what school has the best program for major X?", not apparently realizing that most students change majors and they will be miserable if the college is not a good fit in other regards. They are very focused on what high school careers lead to what college majors lead to what jobs, not realizing that most of the world is not pre-professional and most job searches are fluid and opportunistic and your employer or grad school professors will not, in fact, give a damn whether you chose environmental studies or newspaper for your seventh class senior year. They are largely unaware of the role that internships, extracurriculars, or anything at all outside of a transcript plays in skill acquisition. So they crave the big name because it's right there, written down, solid, comprehensible.
As for how to *fix* it...? Goodness gracious, I have no idea. If I could I'd be making ten times the money consulting and fixing the woes of all suburban families everywhere.
I have seen some interesting phenomena when finances are a serious factor in the college choice, though. There's a good sort and a bad sort. The bad sort is when parents say "I don't care if you're in love with school X, either there's no extra value from it or it isn't worth it, you're going to the state school." Many of those kids adjust and do fine, but it's very traumatic for them, because the decision really isn't about what's a good fit, but just their parents' (possibly wrong) views of value. The good sort is when parents are honest with their kids about finances and affordability and the kids and parents make a collective decision about value. I find that most kids are very mature about this, very respectful of their parents' financial limitations, and they think carefully about the extra (perceived?) value they would get from the more expensive school versus the cost to their parents and their future selves. Some opt for the more expensive school, on the theory that it's an irreplaceable experience and the name, resources, or connections will open doors for them; some opt for the cheaper school on the theory that, if they are self-motivated, they will make the best of it and still get an excellent education and be much better-off financially as they start adulthood.
I guess it's no surprise to an economist that people make better decisions when they more fully consider the costs and benefits involved, eh?
Posted by: Andromeda at Apr 24, 2006 2:11:54 PM
"If your kid is very smart and takes plenty of initiative, maybe you should send him to a large school with lots of resources. He will be able to hook up with the interesting people and they will have a better choice of peers."
Oh the memories! I hooked up with so many interesting people in college. Plenty of uninteresting ones also.
Posted by: Diogenes at Apr 24, 2006 2:14:44 PM
These "future earnings" studies seem to presuppose that college students seek to maximize their earnings. Some do--more or less--and angle for jobs at the likes of Goldman or McKinsey. But most kids pursue highly sub-optimal strategies for earnings maximization, like studying liberal arts or getting a pure mathematics Ph.D.
I would guess that a relatively large percentage of students at top colleges are actually interested in doing serious academic work, not attaining Big Swinging Dick status. (Admittedly a higher percentage of elite students may be motivated primarily by prestige.)
I'd argue that we'd need to compare greedy students at Penn to greedy students at Penn State, not a bunch of kids whose goals are writing the great American novel or effecting world peace or getting tenure at top department in their field.
(I find university economists simplifying humans as profit maximizing agents strange, because a sharp economist could have taken a slightly different path and had a shot at ten times her academic income on Wall Street.)
Posted by: gundryggia at Apr 24, 2006 2:23:06 PM
"Whatever happened to students choosing their own career/college? Are we responsible for our children forever? Raise a child to make their own decisions and let them choose the college for themselves. (From a noneconomist parent)."
As the child of immigrant parents who did not understand the US higher education system and were almost completely removed from the decision I have some experience in this.
When I was a 17 year old junior in high school I really had no idea what I was doing when I applied to colleges. I did not study for the SAT, work to get good grades, participate in extracurricular activities, or even spend more than an hour on my application essay. Why did I not work to improve my prospects? Because I was a kid!
Posted by: Chris Albon at Apr 24, 2006 2:32:17 PM
