Tuesday, December 13, 2011

The Deal: The debate over elite schools and elite jobs

More on elitism and credentialism in an article by Editor in Chief Robert Teitelman at The Deal. Related posts.

The cognitive-phonetic dissonance of Asian names for English speakers is on display: I am referred to as "Hsui" and "Hsiu", but never "Hsu" (Hopefully fixed before you read this :-)

The Deal: There is a fascinating discussion unfolding across the Internet that reaches into all kinds of interesting nooks and crannies. Its origin is a paper from Lauren Rivera, "Ivies, Extracurricular and Exclusion: Elite Employers' Use of Educational Credentials." Rivera, a professor at Northwestern's Kellogg School of Management, spent several years interviewing "elite" professional service firms, meaning investment banking, consulting and law firms. Her conclusions, which have been batted around the blogosphere, come down to a handful of talking points: These elite employers primarily recruit from roughly four "super-elite" universities (these differ slightly depending on the area or the individual, and include both undergraduate and graduate recruiting, though it's amazing to see the schools that are considered "second-tier") and care more for the school than for the academic record; busy evaluators have a lot of leeway in deciding who to interview and who not; and (as in college admission) extracurricular activities have become a key secondary filter, but only if they're out of the norm -- playing college lacrosse, say, as opposed to intramural football.

Reading Rivera's paper is a revelation -- and shocking. "Evaluators," she writes, "relied so intensely on the criteria of 'school' as a criterion of evaluation not because they believed that the content of the elite curricula better prepared students for life in their firms -- in fact, evaluators tended to believe that elite and, in particular, super-elite instruction was 'too abstract,' 'overly theoretical,' or even, 'useless' compared to the more 'practical' and 'relevant' training offered at 'lesser' institutions -- but rather due to the strong cultural meanings and character judgments evaluators attributed to admission and enrollment at an elite school." Rivera quotes a recruitment manager at an investment bank who talks about schools that aren't in the super-elite category: "I'm just being really honest, it pretty much goes into a black hole. And I'm pretty open about that with the students I talk to. It's tough. You need to know someone, you need to have a connection, you need to get someone to raise their hand and say, 'Let's bring this candidate in.' ... Look, I have a specific day I need to go in and look at ... the Brown candidates, you know the Yale candidates. I don't have a reason necessarily to go into what we call the 'best of the rest' folder unless I've run out of everything else. ... Unfortunately it's just not a great situation. There's not an easy way to get into the firm if you're not at a target school."

... Manzi questioned the exclusivity of Rivera's super-elite and argued from personal experience that consultants at least do demand not just high course and test scores, but a certain rigor in course selection, particularly in math and science. Hsiu, a physicist at the University of Oregon, then offered a further distinction between hard and soft firms, which are looking for subtly different skills. His distinction turns almost entirely on quantitative abilities. Hard firms, like hedge and venture firms and tech startups, demand sheer mathematical brainpower and will take it where they can find it. Soft firms such as investment banks, law and consulting firms that sell services, like advice, that is more "nebulous" and harder to measure, and where "prestige" matters more, embrace the elite-school brand more readily. Hsiu can't help but give more value to those measurable standards, although a number of his commenters argued with him on that point.

Hmm... no problems with these other names:

... Bloggers Bryan Caplan, Megan McArdle, Fabio Rojas, Steve Hsui and Jim Manzi have offered up perspectives on an issue that speaks to everything from the crisis in higher education to increasing inequality to the size and influence of finance. Perhaps because of the subject matter, the comments on many of these posts are well worth reading as well.


Yan Shen said...

I understand your feeling Steve. In an earlier comment, David Versace, perhaps deliberately, referred to me as Yen Shen. ;)

RKU1 said...

Well, as I've previously argued, it seems to me that to a considerable extent this sort of social policy is generally self-correcting, at least over the long haul.  Countries which select their political or business elites in a highly sub-optimal manner tend to underperform countries which avoid such serious missteps.

As a prime recent example of this, it's pretty clear that the criteria which the Republican Party and the nation as a whole used to select George W. Bush as president were perhaps not the wisest for a nation to follow.  And as a fairly direct result, America suffered through what is by many estimates the most totally disastrous presidency in modern history.  The considerable impoverishment of large segments of the population is perhaps an indicator of this, and the existing trendlines are hardly auspicious.

Offhand, it may be more than purely coincidental that those elite employers which seem to most heavily rely upon these doubtful recruiting metrics are also those heavily concentrated in the most obviously parasitic sectors of the economy, which in recent decades have increasingly dominated the commanding heights of our business activity.  The fact that this same era has witnessed the disappearance of significant economic advancement for the vast majority of ordinary Americans is perhaps not entirely coincidental.

Here's a very trivial datapoint.  Recently, an important brokerage firm led by one of the most prominent financial and political figures in American society went bankrupt after it lost various extremly risky leveraged bets.  At the time of the collapse, over a billion dollars in customer funds disappeared, and now, even six weeks later, no one has yet been able to determine what happened to the missing funds.  I honestly can't remember the last time I heard about a similar thing happening in even one of the more disreputable Third World countries.

I think it highly likely that nations which run their political and business/financial systems like those of corrupt Third World countries will eventually exhibit the general standard of living and quality of life of corrupt Third World countries...

goodtaste said...

"His distinction turns almost entirely on quantitative abilities. Hard firms, like hedge and venture firms and tech startups, demand sheer mathematical brainpower and will take it where they can find it."

This is true, but I would bet this talent is found more frequently at elite schools than non-elite schools.

GeorgeNYC said...

it is all st signaling. The fact that you got into an elite school says something not only abut your "talent" but your willingness to do certain things to get into this schools. It also says something about your social background. The whole "extra-curricular" is just further signaling as to your background. 

Once the "World as the Fincanciers Know It" collapses they will hopefully learn more usefull skills in the re-education camps that will spring up after the revolution. 

Carson Chow said...

What exactly is Teitelman's argument anyway. I couldn't figure out what he was saying. Does he think elite credntialing is good or bad?

LondonYoung said...

I'm with you, Carson.  It is like that line from Planes, Trains and Automobiles ... "when you speak, please try to have a point, it makes it so much better for the listener"

Yan Shen said...

On the other hand Steve, your experience probably wasn't as bad as what these two guys had to deal with...


"A fast food chicken chain was being roasted today over racial stereotyping at one of its California restaurants.A cashier was fired after using offensive names mocking Asian customers at the Chick-fil-A in Irvine. Rather than take the real names of two students, she typed ‘Ching’ and ‘Chong’ on their food receipts."

I wonder, was the female cashier a regular iSteve reader? Friends with David Versace?

ohwilleke said...

You know the saying, "all publicity is good publicity as long as they spell my name right."  Well, this is not good publicity.  :(

I've seen elite law firm hiring studies that contradict the conclusion reached in that case, but I do agree that the "soft skills" component is stronger in investment banking, consulting, and the like, and that there is a super-elite strata of law and accounting where the same considerations apply.  I would be one of those people who argue with you on the point of hard skills being more important.  I've seen "soft skills" in action and they are a force to be reckoned with that create value especially in environments where everyone is reasonably smart.  I've had colleagues who use their connections and their insights into how the people from their world think to land work for a firm that I'm more competent to perform but could never secure contracts to do on my own.  A TV series that did an excellent job of critiquing how the various factors all play out togetheer, even though it doesn't happen at that age is "Veronica Mars." 

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