In recent years, many top universities have tried to guide their students into careers other than finance.
In 2008, Drew Gilpin Faust, the president of Harvard University, went so far as to give a speech to graduating seniors asking them to stand fast against Wall Street’s “all but irresistible recruiting juggernaut.” Tufts University is paying the student loans of graduates who go into public service.
Ezra Klein
Ezra Klein is the editor of Wonkblog and a columnist at the Washington Post, as well as a contributor to MSNBC and Bloomberg. His work focuses on domestic and economic policymaking, as well as the political system that’s constantly screwing it up. He really likes graphs, and is on Twitter, Google+ and Facebook. E-mail him here.
The efforts seem to be failing. In December, the New York Times’ Catherine Rampell asked Harvard, Yale and Princeton for data on the professions their graduates were entering. As of 2011, finance remained the most popular career for Harvard graduates, sucking up 17 percent of those who went from college to a full-time job. At Yale, finance accounted for 14 percent of the 2010 graduating class and at Princeton, 35.9 percent of those who had jobs at graduation were headed into finance.
At Harvard and Yale, at least, the numbers have drifted down in recent years. Harvard’s 2008 class sent 28 percent of its gainfully employed graduates to Wall Street, while Yale sent 26 percent. Whether the recent decline reflects an enduring change or a recession-induced blip remains to be seen. I’m betting blip, but perhaps I’m wrong.
Yet even the lower figures for graduates heading to Wall Street are sort of weird. No high school senior gets an acceptance letter from Harvard and begins thinking about the exciting life he or she will lead constructing credit derivatives. Yet that’s where many students end up. Even after the financial crisis. Even after the bailout of Wall Street. Even after the dominant cultural metaphor for Goldman Sachs became a money-sucking vampire squid.
Explanations for why so many Ivy League graduates rush into finance — along with law and consulting — tend to fall into two camps.
The economic determinists say this is no mystery. Finance, law and consulting pay high salaries — much higher than most other options on the table. It would be strange, given the financial incentives, if these graduates weren’t going into such high-paying fields.
The social determinists say these students are simply following their tribe. Finance, law and consulting employ smart, high-status individuals in desirable urban locales. Because Ivy League graduates are smart, high-status individuals who generally want to work and live among people like themselves, it makes sense that they take the road more traveled.
These two camps are not mutually exclusive. You can follow the money while you follow your friends. But I’m young enough to know these graduates, or at least a lot of their recent predecessors. In conversations with them, I’ve come to favor another explanation: Their educations are failing them.
In effect, Wall Street — like law, management consulting and Teach for America — is taking advantage of the weakness in liberal arts education.
For many kids, college represents an end goal. Once you get into a good college, you’ve made it, and everyone stops worrying about you. You’re encouraged to take classes in subjects like English literature and history and political science, all of which are fine and interesting, but none of which leave you with marketable skills. After a few years of study, you suddenly find it’s late in your junior year, or early in your senior year, and you have no skills pointing to the obvious next step.
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