Clearly, in the real world, there is a correlation between the college you attend and various life outcomes. For example, the average Harvard grad makes $123,000, whereas the average Penn State grad earns $87,000. Fully 20 percent of United States Senators attended one of 12 universities - the Ivy League plus Stanford, MIT, Duke, and Chicago.
But do the elite colleges cause these elite outcomes? Perhaps the reason that people who attend Harvard and other elite schools earn more money is because of the people who are accepted to Harvard and other elite schools in the first place: people with extraordinary levels of intelligence and work ethic.
In a path-breaking study, Alan Krueger and Stacy Dale attempted to answer this question. They didn’t just compare all students who went to, say, Harvard and Penn State. Instead, they looked at students who got accepted to the same schools - but chose different ones. They found - and this was quite shocking - that there was no difference in earnings outcomes.
