Your Education Means Nothing

by Mike Bechek | July 9, 2008 at 12:00 pm

Bloomberg News columnist Amity Shlaes has a monster scoop this morning: Ivy League networking is dead.

A new paper from the National Bureau of Economic Research, Shlaes points out, recently tried to quantify the strength of what the authors call the “connection premium” of attending an elite college or business school. Focusing on Wall Street analysts, the economists looked at whether the financial advice they gave was better when they had the same alma mater as a senior officer at the company they were recommending. It was, obviously — by 8.16 percent.

This all changed, apparently, with a 2000 Securities and Exchange Commision rule called “Fair Disclosure” that prohibited, it seems, chatting over drinks at the Harvard Club. After that, the “connection premium” disappeared. Fair, indeed, I guess.

No one will suffer more from the new rule than Harvard kids, who once made up 19 percent of all networking, according to the killjoys.

After the jump, what schools used to have the most connections.

Looking at an average of 600 equity analysts per year, the authors found a total of some 5,000 school ties for analysts to senior officers. Of those, 19 percent were Harvard connections. Ten percent were from the University of Pennsylvania (the Wharton School, but also the college). Seven percent were New York University links.

Six percent had a Stanford link. Three percent were “Longhorn” ties from the University of Texas. Some 3 percent shared the frigid experience of Lake Michigan ice in February at the University of Chicago.

This suggests something that will come as a relief to the parents of the aforementioned applicants. The connection premium was not an Ivy-only phenomenon.

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3 Responses to “Your Education Means Nothing”

  1. Comments princeton09 Says:
    July 9th, 2008 at 12:48 pm

    Your title exaggerates the situation. Those of us who will remain careers like academia look forward to a future in which we, with few exceptions, will be well-served by our Ivy League connections.

  2. Comments ColumbiaOhTen Says:
    July 9th, 2008 at 1:18 pm

    Agreed with princeton09. Not all of us want to be i-bankers (though i sure know a lot of people who do!)

  3. Comments Y11 Says:
    July 9th, 2008 at 4:51 pm

    We are SO screwed. Not only can we no longer talk to our plumbers, but we may very well end up plumbers ourselves. The world is over.

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