I have been a fan of Michael Horn since he co-authored Disrupting Class with Clayton Christensen. I have copies of several of his books and subscribe to his podcast. On July 12, 2023 he released a podcast he made with Matt Siegelman.
Matt is President of the Burning Glass Institute, a non-profit. For 20 years, he was CEO of Burning Glass, now known as Lightcast (note: when I was president of APUS, we used Burning Glass for our wage data studies and market and needs analyses). I believe that the Lightcast dataset of wage data is better than data published by the Department of Education.
The title of the podcast is Ranking Colleges Based on Different Career Pathways. Matt and Michael discussed the Institute’s recent work with the Wall Street Journal to rank the top colleges for nine high paying careers.
The WSJ published the outcomes of the Burning Glass Institute’s research over several weeks.
The first set of rankings issued were for the Top Colleges for High Paying Jobs in Finance. The research conducted by BGI ranks schools by the premium or excess of a school’s graduates over the median salary for all other schools’ graduates in the field.
When I read the Wall Street Journal article, I noted that colleges were grouped into private and public rankings. I didn’t realize until after listening to the podcast that the reason for that grouping was that so few public institutions made the overall top 20 for any of the career areas. Appended below are the top 20 private colleges for finance.
Notice that all 20 private colleges have higher annual salary premiums than the top public university on the list below.
Matt Siegelman stated on the podcast that “we looked at the 20 best performers in each field – very few of them were public. If you’re at a big school (like a public), there’s only so many jobs at Goldman Sachs if you go into finance or at Cravath if you go into law. It’s a matter of going to the college where will you have the best chance at getting seen.” Private colleges have smaller numbers of students in their programs.
The tables not only include the annual salary premium (calculated by using the difference in the earnings of the school’s graduates in their first 10 years after graduation and the median graduate in the field), but also include the percentage of students who majored in the program, the average yearly salary, and the 2019-20 annual net price. The net price was obtained from IPEDS and reflects the cost of attendance including tuition, required fees, expenses, and room and board for the 2019-20 year less the average total grant and scholarship aid received from government sources and the institution.
The next career rankings issued by the WSJ were for the Top Colleges for High-Paying Jobs in Management Consulting.
Salary premiums in the consulting field were even higher than the finance field with Harvard graduates earning a $61,042 premium over the median earnings of all other graduates in the field. Once again, the top 20 private colleges and universities earned a larger average premium than the highest of the top 20 public colleges which was Georgia Tech with a $21,473 premium. Of note, among the private colleges and universities, three smaller colleges entered the top 20. These colleges were Williams College (9), Pomona College (12), and Amherst College (16).
In Top Colleges for High-Paying Jobs in Accounting, Harvard was at the top of the private college and university list with a $25,394 premium over the median for all graduates in the field.
Accounting firms appear to pay lower than finance and consulting firms which may explain why the premiums were closer to the median. There was a vastly different mix of private colleges and universities in the top 20. Also, in this case, the top public institution (San Jose State University) would have achieved 14th place in the top 20 private universities list.
In Top Colleges for High-Paying Jobs in Law, Stanford University graduates achieved the top ranking with a $49,178 annual premium over the median. The top public university, the University of California-Berkeley would have achieved eighth place on the private colleges list with a $27,543 annual premium.
Matt Siegelman noted in the podcast that students who went to top law schools earned $50k more per year than the median earnings. Over a 30-year career, that’s $1.5 million more. He also noted that in fields like law, there is a geographic effect meaning that certain regions of the U.S. pay more for attorneys than other regions. If your law school graduates work for the largest firms in the largest cities, they’re going to make more money.
The fifth career area was Top Colleges for High-Paying Jobs in Data Science and Princeton University led the private colleges and universities with an annual premium of $37,691 edging out number two Stanford whose graduates averaged an annual premium of $37,618.
The University of California-Berkeley led the public universities list with a premium of $29,018. The first nine colleges in the public college rankings are all based in California. According to Mr. Siegelman, one out of every six data analytics jobs are based in California.
Top Colleges for High-Paying Jobs in Tech was the sixth career area researched by the BGI team for the Journal. Stanford University grads were at the top of the private university list with an average premium of $46,000 per year over the median. UC-Berkeley grads were at the top of the public institution list with an average of $36,000 per year over the median.
Berkeley grads would have placed eighth on the private university list. Notably, half of the public top 20 schools are in California, reinforcing Mr. Siegelman’s comments about geography weighing in on some of the rankings. He was quoted in the WSJ as also stating that “you often hear in Silicon Valley ‘we don’t care if you have a degree or where your degree is from, we just care if you can code.’ This list suggests otherwise.”
Computer software engineers were the only field in engineering that were left out of the Top Colleges for High-Paying Jobs in Engineering rankings. Harvard University graduates led the private colleges and universities list with a $39,945 annual premium over the median.
UC-Berkeley engineering grads earned an annual premium of $20,339 leading the public colleges and universities rankings and would have ranked number seven on the private colleges list. Two colleges new to the public university top 10 rankings were the U.S. Naval Academy at number three and Montana Technical University at number seven.
Top Colleges for High-Paying Jobs in Software included software engineers and computer scientists in any industry. This is differentiated from the technology ranking which spanned all job titles in the tech industry. It also excludes the data and applied science rankings which included specific data-centric roles across all industries.
Stanford University graduates earned a $43,557 annual premium followed by Princeton, Harvard, and California Institute of Technology all of whose graduates earned more than a $40,000 annual premium. A surprising newcomer to the top 20 private colleges rankings was Mount Holyoke College whose graduates earned an annual premium of $26,697 placing them at number 19 on the list. Mr. Siegelman noted in the podcast that few Mt. Holyoke grads go into software engineering even though their grads achieved a number 19 ranking.
UC-Berkeley outdistanced the other public colleges and universities with a $35,617 premium at number one. Again, seven of the top 10 public colleges in this ranking are in California.
The ninth and final career ranked by BGI and the WSJ staff was the Top Colleges for High-Paying Jobs in Marketing. Stanford’s alumni are at the top of this list with an average annual premium of $38,147 above the median. UC-Berkeley grads led the public university list with an annual premium of $25,163 above the median.
Mr. Siegelman commented that the schools in the top marketing rankings are similar to the schools in the top software rankings, most likely because the highest paid marketing jobs are in tech. He also noted that marketing has changed in recent years from being brand-focused to an emphasis on product development and data.
Siegelman remarked that the nine career fields selected by the WSJ are where most students at top schools tend to be employed. I couldn’t discern if his comment meant that the selection of those fields was purposeful to determine how well students at elite institutions do after graduation or if it was merely a reported statistic.
I added my summary of the reports from each of the WSJ rankings articles, because I thought it was important for everyone to have the same context available as you listened to or read the comments made by Michael Horn and Matt Siegelman on the podcast.
Early in the podcast, Mr. Siegelman said “I don’t believe that the world needs more college graduates. Not every student going into school knows what they want to do on the other side. How [would a student] know which schools are going to help [them] go further?
Michael Horn added that a specific program major is not always predictive of what someone will do later in life. It’s not only the program major that’s important but also the individual’s social capital (the value of that individual’s network). (WEB remark – what’s interesting to me about his comment about social capital is that the elite private colleges and universities that ranked very well in their salary premiums are one of the best places for individuals to build and expand their social capital/networks).
According to Mr. Horn, the WSJ looked at only the top 20 private and public institutions in each category. He asked Mr. Siegelman about those institutions that failed to make the grade. Was there an attempt to look at colleges and universities at the bottom? What insights could a prospective student harvest to avoid making a mistake?
Mr. Siegelman replied that the bottom of the list for each program major was not mined given that there are thousands of colleges and universities. BGI defines the success of graduates as a three-way intersection – the degree a student majors in, the schools that a student goes to, and the skills a student acquires.
He added that when BGI looked at that three-way intersection, they found that a student should be a tech or engineering major at a non-selective institution than almost any other major at a selective institution.
Americans tend to focus on rankings at the institution level and don’t focus on programs at the institution level. Matt remarked that if [a student] doesn’t know where [he/she] wants to go or what to do, [he/she] can make some serious mistakes. We have frequent debates about the merits of STEM programs versus humanities degrees. Where we see the biggest levels of underperformance are with programs that sound nominally practical but have low demand for jobs.
Mr. Siegelman commented that it seems intuitively honest that we shouldn’t let our children become parks and rec majors or criminal justice majors. STEM has been a consistent career path [with decent earnings]. The flight out of liberal arts has led to a growth in practical majors that tend to underperform.
Michael Horn then commented that “there are bachelor’s degree pathways that don’t always pay off. What are some of the non-degree pathways that people should consider?”
Mr. Siegelman responded that a life science major who develops clinical experiences earns 60 percent more than non-clinical experience learners.
Mr. Horn followed up with the question, “what are things that we should be doing to empower learners to make investments and choices in line with good investments?”
Matt Siegelman answered that we need to provide insights on how different skills work. Some skills are foundational. If you want to be a graphic designer, you need project management skills and budget skills. Some skills are transformational. BGI worked with Coursera to develop a framework for companies and learners to optimize skills that should be developed. How much value will a skill give you? How long will it take to learn? How long will it last?
Additional questions Mr. Siegelman posed included “how do we create the structures of how people can acquire these skills on the fly? How do we enable people to stairstep their way toward economic mobility?” He added that the U.S. needs to rethink the community college system. It’s too oriented toward degree transfer. How do we give people transparency for the outcomes of short-term credentials? We must have a way of representing skills that has short term currency.
Mr. Siegelman noted that there are 10 times more credentials in the U.S. than there are words in the Oxford Dictionary (1 million versus 110,000). Given the [ridiculously] high number of credentials, he asked how can we provide an evaluation at scale for learners to invest in and employers to value?
Mr. Horn commented that learning Python will have a different impact on your career depending on context.
In his final comment, Mr. Siegelman noted that we need to do so much better than we are doing now. With 37 percent of skills being replaced in five years due to technology (AI and otherwise), there will be tremendous demand from learners and employers for short-term skills outcomes data to make informed choices.
I liked the rankings reports built by the Burning Glass Institute in collaboration with the Wall Street Journal. I had not focused on them collectively until I listened to the podcast discussion between Michael Horn and Matt Siegelman. I applaud BGI for the data reviewed to compile these reports.
At the same time, the reports didn’t necessarily answer all questions that I have regarding the ability of an institution’s graduates to perform so well in these nine fields. What about the value of signaling? Companies that mainly recruit at elite institutions are often criticized for doing so because they believe they will acquire a highly intelligent employee with a well-connected network. Consulting and finance are clearly two of those areas where the prestige of an elite degree is valued.
Mr. Siegelman’s comment about the number of documented credentials (1 million and increasing) versus the number of words in the Oxford English Dictionary pointed out the difficulty in evaluating transcripts for skills and learning. In some ways, it supports companies taking the easy way out and recruiting at selective colleges and universities where they know that they can find highly intelligent people (whether they possess the right skills is another issue).
There are many issues that higher education needs to resolve over the next decade. If I were currently leading a non-selective higher ed institution, I would focus on the BGI definition as expressed by Mr. Siegelman:
BGI defines the success of graduates as a three-way intersection – the degree a student majors in, the schools that a student goes to, and the skills a student acquires.
I would add his follow-up comment to this statement which was:
When BGI looked at that three-way intersection, they found that a student should be a tech or engineering major at a non-selective institution than almost any other major at a selective institution.
If you don’t have the resources to build tech/STEM degrees, build tech/STEM certificates. Join a consortial course-sharing group to minimize your time to develop and implement those degrees/certificates. Partner with employers like you’ve never partnered before. Be relevant. Find your niche. Sitting on the sidelines waiting for the market to settle out is about the worst decision you can make.