Where should you send your kid to college?

Attendance decisions are due May 1, so what should you do?  If parents (and their children) are loaded with biases, is behavioral economics useful? 

I suspect the core bias is parents wanting to feel they have done everything possible to help the kid, rather than maximizing the kid’s (or the world’s) expected return.  This will lead parents to ignore the upsides of risky courses of action.  Who wants to send the kid to the wrong school and feel guilty for the rest of your life?  But if the school works out especially well — your kid wins a Nobel Prize rather than your kid "merely" receiving tenure at an Ivy League school  — the parents are not so much happier.  "More pride" is only a little better than "pride," and most of your kid’s accomplishments you will overvalue and exaggerate anyway.  So parents put too much stress on the possible downside and not enough weight on the potential upside of a choice.

If your kid is very smart and takes plenty of initiative, maybe you should send him to a large school with lots of resources.  He will be able to hook up with the interesting people and they will have a better choice of peers.  If your kid has true intellectual upside, those extra resources will yield a very high return.  Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.

That being said, if you follow this advice you probably will regret it.  It is not geared toward the median case or the modal case.  Perhaps you already are upset at this blogger for suggesting that your kid should be a sacrificial lamb, offered up to the altar of scientific progress.  Or perhaps you (and your kid) feel flattered.

Another view is that most people overestimate the intelligence of their kids.  Too many parents obsess over Harvard when they should be wondering about Podunk U..  That point is well-taken, but being a fan of overoptimism, I find the first story more plausible.  So look at the total endowment of the school, not the per capita endowment.

Your thoughts?  Don’t focus on general advice for parents, tell us what you think the relevant behavioral bias is, how to correct for it, and distinguish between returns for students, parents, and the broader world. 


I think the general bias is to think that the school matters far more than the student does whereas, in fact, the reverse is true. We have studies showing that an Ivy League degree makes little or no difference vs State U when you compare matched kids (kids who go to an Ivy League school vs kids who were accepted at an Ivy League school but chose to attend State U instead). And yet these results seem to have made little dent on parental mania for the 'highest ranked schools'.

If your kid has true intellectual upside, those extra resources will yield a very high return. Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.

But does this case tell us anything? We would need to know what fraction of the top high school students attend HYP and what fraction of young 'stars' also attended HYP. Are HYP grads over-represented by this measure?

Hasn't Alan Kreuger already answered this with empirical data? Most of the students admitted to Harvard or Princeton are so intelligent enough that they would do equally well in lifetime earnings if they went to their local state schools. Thus, by revealed preferences, parents who know their kids are smart shouldn't care where they go to college; parents who think their kids aren't that smart should invest the most in trying to trick the Harvard admissions committee.

As far as returns for students, when I went to Princeton many of my fellow students expressed a preference for a school with a better male-female ratio (it was 60-40 at the time, but much closer to 50-50 today).

I went to a top-ranked school for my undergraduate degree. If I could do it over again, I would attend a respectable state school. Although I made some wonderful friends there, and I think the school's reputation gets my foot in the door for job interviews, it also saddled me with large amounts of debt. And although I've not taken many courses elsewhere to make a valid comparison, I don't think the quality of instruction was that great on an absolute basis, not enough to warrant the premium I paid. In retrospect, I would prefer to have graduated debt-free and had greater flexibility to take on lower-paying but more interesting jobs.

There are three issues here that are important. The first is what value does attendance at a prestigious Ivy League college impute to a student? There is plenty of evidence that many experiences in the most prestigious colleges and universities offer little extra. But then you compare that to "Podunk U" and the result may also be true. A student who goes to a large public university may be stuck in a position of having large classes at the beginning level which will probably mean a requirement for a lot of self motivated study. I think a lot depends here on a) the energy and motivation of the kid and b) the intended major. There are lots of good alternatives that the college search may miss.

Second, is the motivations of the parents. As noted above, a lot of parents concentrate on trying to get into the most prestigious/visible institution while there are substantial alternatives right out of the field of vision - both in terms of net cost and in quality. I recommend that families begin to take their kids on college campuses about the time they come to high school (as a part of vacations) - let the kids describe what they like and dislike about the alternatives they see.

Finally, one should look at the intended career and venue. Once, an overwhelming percentage of corporate lawyers went to a couple of institutions - one has to think about the variety of alternatives in both schools and venues now because while the biggest law firms in the East still pick from a couple of places - the financial markets are not stuck in one city. That is true for a lot of other professions also. This suggests one supplemental point. There are some outstanding opportunities outside the US, if a student masters another language. In a real sense both at the undergraduate and graduate levels parents should widen their horizons to encourage their kids to look outside the US - at least for a study abroad opportunity which is more than drinking beer and speaking English. English may be the language of commerce today but a second language is a mighty part of one's arsenal.

In some respects the student's choice of major is important. If he or she is going to be studying a highly marketable subject, for example nursing or electrical engineering, the university's status probably doesn't make a huge difference and a less-expensive state school will work fine. A student planning on a less-marketable major such as liberal arts might be better off going to the best possible university, however, as anything that will give an edge is important.
Of course, all this is complicated by the fact that many students enter college unsure about their majors and sometimes change their plans.

Even if Middlebury gives a better undergraduate education than Harvard, the best undergraduate senior economics major at Harvard will have a bigger head start in his or her career.

Maybe I'm just a liberal arts college fuddy-duddy, but I think that things like the quality of the character you develop make an actual difference in your lifetime income. Most of the people I know that are in positions of power didn't get there simply by being more intelligent, but by being more effective people than those around them. Perhaps its true that Harvard better prepares its exceptional graduates in that respect, but I would suspect that when you say the words "better undergraduate education," what you're really referring to is the non-exceptional graduate. The access to resources at a liberal arts college, both academic and personal, is part of the package that is supposed to ensure a top quality education for all students, not merely the few exceptional ones that are able to make connections and procure access at universities.

If this is the case, then shouldn't risk-averse folks be choosing liberal arts colleges, and shouldn't folks that believe they will rise to the top be going to Harvard? One answer is that people are not, in general, risk averse (aka Harvard actually offers a better education and/or quality of character doesn't actually

I suspect that the real problem is more akin to information asymmetry. Look at the student populations of top liberal arts colleges; they have a disproportionate number of children of other schools' faculty. Anyone who believes that information asymmetries don't exist in higher education choice should look at liberal arts college data over time. Have the schools actually gotten that much relatively better over time? Of course not.

One problem I think you may run into is that students at different schools don't necessarily measure success in the same way. If you judged Carleton by the first jobs of its graduates, it would do quite poorly. People here do not, in general, take their first jobs very seriously, moreso than at other Liberal Arts Colleges in fact. That is, no doubt, at some detriment to their lifetime incomes, but in general, their career choices are moreso. However, few Carleton graduates that I have met do not consider themselves successful in whatever it is that they decided to do with themselves.

We have a Junior heading into the process now. There are SO many competing influences.

1. The kid - bright but not brilliant. Comparing self with kids from the same private school the past 2 years -- could get in almost anywhere. From his view:
NOT applying to Yale - the brilliant kids go there
Lusting for Penn - a couple kids each year of similar "smarts" go there and do well.
Overall - wants to succeed at college and be happy. Presumes rural schools will be boring. Annoyed by the boost dumb legacy kids get.

2. Guidance counselors - college is a match to be made not a trophy to be won.

3. Parents - Want to figure out what is best for their kid with too little experience. Sense that education received is a component but that Brand Name is also a component.
Also recognize that the top kids in any group/classroom are likely to get more attention from the professors (or team coaches) thus wonder "is a school like Yale nearly as good for a kid who might enter in the bottom half..."
Lots of parental peer pressure at cocktail parties...

4. My own experience. Some of the brightest kids where I went to school had been accepted at MIT, Yale and Harvard. Had I been accepted I would have gone so I asked how they made their choice. One came to my school for a much better financial package, another kid came because he knew he would need an advanced degree and wanted to graduate at the top of a great school and go to Harvard for the advanced degree. He figured he might not get into Harvard grad school if he graduated in the lower half of MIT as an undergrad. The third came to be closer to home.

I agree with jon o that the student should be made to bear some of the costs of an expensive choice. But at the end of the day, "fit" is very important. A cold-blooded careerist will want to go to the most highly-ranked school where he can do well with ease. A party animal will want to go where she can play.

But a studious, highly motivated and exceptional student will now have to decide between the strengths of a large, perhaps impersonal school vs a small, academically intense university or liberal arts college.

Having attended a small, academically intense and highly renowned research institution, I can see the costs and benefits of different choices. In my view, the best argument for some elite undergrad institutions is the possibility of being surrounded by outstanding students and knowing that there is no academic tail in the school -- or even of finding out that you are in it. You are always being challenged and hard work breeds a camaraderie and esprit d'ecole that a more-smorgasbord style state university experience will not do for everyone. I valued being in a school where no one was admitted on athletic scholarships and all varsity players were not much different from the average student. This is not true at all elite universities. Many LACs are like this as well. But I also valued being tested against the best in the world at an early age, even or perhaps especially, when I failed.

Someone else may value the exact opposite. But I think it makes the point. Where you want to go to school very much depends on what you want out of it.

Lee -

"Look at the student populations of top liberal arts colleges; they have a disproportionate number of children of other schools' faculty. Anyone who believes that information asymmetries don't exist in higher education choice should look at liberal arts college data over time."

I would love to see those data, especially since that first sentence is one of the more provocative things that I, as the parent of a HS junior who is very interested in the small to medium-sized liberal arts colleges, have read this year. Could you point me to a source?


It depends on the student's abilities and interests. At the highest level of intellect, students can get better grades by actually learning the material at elite schools (where actual learning is demanded) than by memorizing as the less demanding schools generally require.
Debt matters little compared to the differences in income associated with our increasingly stratified society.

One point of yours no one has commented on: Returns for the broader world.

If the value of schools is sorting and signalling, then not enough of it is being done. Grade inflation works to the advantage of the top schools, since a "lucky" student who gets into an elite and gets a B average can "pass" for a more academically talented student.

From the standpoint of global welfare, it would be great if all students were ranked on a universal scale [We will ignore the practical impossibility of doing so.] so that we could say for certain that a C+ from Chicago equals an A minus from NE Podunk U. But absent a reliable 3rd party testing authority, both students and elite schools have incentives to produce a corrupted signal.

Also, are we better off with most of the best students in a handful of great schools instead of spread out to all the colleges? My gut says yes, but that's another debate entirely.

"If your kid is very smart and takes plenty of initiative, maybe you should send him to a large school with lots of resources. He will be able to hook up with the interesting people and they will have a better choice of peers."

Oh the memories! I hooked up with so many interesting people in college. Plenty of uninteresting ones also.

"Whatever happened to students choosing their own career/college? Are we responsible for our children forever? Raise a child to make their own decisions and let them choose the college for themselves. (From a noneconomist parent)."

As the child of immigrant parents who did not understand the US higher education system and were almost completely removed from the decision I have some experience in this.

When I was a 17 year old junior in high school I really had no idea what I was doing when I applied to colleges. I did not study for the SAT, work to get good grades, participate in extracurricular activities, or even spend more than an hour on my application essay. Why did I not work to improve my prospects? Because I was a kid!

"It depends on the student's abilities and interests."

I concur. There is more risk in sending a non-motivated but probably clever-enough (sort of lazy) student 3000 miles to college at $40,000 per year than a motivated, accomplished student.

Maybe one should let the "less blossomed" student build a track record for a year or to at a nearby state school, then transfer him or her to the far off $40k per year college.

Or let motivation build up, let him or her finish at state school, and then propose some parent-subsidized grad school.

As to what would work best for society, I suggest three things: 1) internships with research papers; 2) study in more than one location (ideally internationally); 3) interdisciplinary approaches. Not my ideas - common themes in catalogs of the top priovate universities.

The well-endowed private universities can and should diversify geographically.

The old reason for having all students at Princeton in one place for four years - library and lab access - is falling away.

Like consulting firms and law firms and accouting firms, the big private universities can and should set up branches in Dublin, London, Singapore, Amsterdam, etc.

With the internet and nearly cost-free VOIP communications, why not rotate students and faculty to other parts of the globe?

So long as the grades from Harvard or Duke in NYC are from home-university profs, why should students complain?

Harvard, Princeton, Duke etc. can and should gobble up lab facilities and class space in places like San Diego, San Franciso, London, NYC, Boston, then send out students to become more worldly (exposed to internship/research opportunities off the home campus) while becoming more educated.

Big public state systems - California, Texas, NY - should be privatized. Just subsidize state students with state funds. Then the big state networks can compete nationally and internationally for students, faculty, funding, donations. Big state systems can help consolidate the industry, across state lines, if privatized.

US college industry should be consolidated - there are more school admins than we need, by a factor of 10 or so.

Seems to me the keys for a parent are helping the student to a good decision making process and being sure that the student makes the decision. If the student "owns" the decision he or she is more likely to do well. And making this decision paves the way for making future decisions.

I would disagree with Peter above, especially if the cost is a
serious factor for the student/parents (or whoever is paying).
Going to a more expensive private school would seem to be more
reasonable if one is planning on majoring in a field that will
pay well than if one is planning on a major that will pay poorly.
The reason is obvious: it will be easier to pay off the debts that
may be accumulated, unless the expense payers are well off and
there will be no debts accumulated no matter what.

This is a hotter issue now than perhaps a decade from now. The
maximum population bulge from the echo baby boom is coming up to
college entry age (1990 was the year of maximum births, this year's
high school sophomores). There have been a lot of news stories this
spring about how tight the competition has gotten to get into places,
and it will only worsen over the next couple of years. Fun and games
for those of us facing these decisions...

There is actually a fair amount of good data showing that the Ivies are overrated. The American Historical Assn. recently did a survey of the schools that sent the largest proportion of history majors on to PhDs. Of the top 5, 4 were liberal arts colleges: Wesleyan, Pomona, Bryn Mawr, Swarthmore (Chicago was the 5th). And other good-but-not-trendy liberal arts colleges were also high on the list: Lawrence, Macalester, Earlham, Kalamazoo...

Of course, one could argue that parents with an eye on future earnings should discourage their children from such schools ;-), but iut does lend support to the claim that small colleges may give their students the most bang for the buck.


My comparison was private versus public schools,
not most elite private versus mediocre private.
I agree that mediocre private do not have an
advantage here. They are not that much less
expensive than the more prestigious ones, which
tend to have the advantage of hefty endowments.

Parents also want to make sure their kids aren't making the decision solely on money.

I faced the following decision:

MIT with no financial aid
State U with tuition waver plus $10,000/yr in stipend.

I was leaning to state U, and my dad said he would pay me $50,000/yr to go to MIT (making it a neutral financial decision).

I'm not sure if he would really have paid, but I chose State U anyway. Good decision, but it definitely only worked out well because I took initiative to make things happen.

Also, send your kids abroad!


I do not know about GMU, but at JMU, which is in the same system,
there is no free tuition for kids of faculty, nor any deals with
other schools. This is something one tends to find in the private
colleges and universities. So, you should be a bit cautious about
presuming too many good things for the host here.

Before getting to which, give some thought to whether and when. Your kid is 18, and will almost certainly be more mature at 19 or 20 than at present, and more likely to get his/her money's worth from being a student. Especially if the kid is not especially interested in going off to college, at least raise the possibility of deferring admission, and offer to pay the same amount for college if it is deferred. Good uses of the time in between: volunteer work for whichever political party or charitable entity the kid believes in; holding down a regular job to make a few bucks and learn what it's like to have to wake up in the morning and go to work; military service, where your upper class kid will rub shoulders with folks from very different backgrounds, earn some money and some scholarship assistance to be used later, and do some good for the nation and for him/herself.

"Before getting to which, give some thought to whether and when. Your kid is 18, and will almost certainly be more mature at 19 or 20 than at present, and more likely to get his/her money's worth from being a student."

If the kid was mature enough to get grades high enough to get accepted to an elite college,then he is ready.

On the other hand, there are lots of people going to college who don't belong there. It's not clear that the cost of college is ever made up in future income, because there are no studies. Just comparing income of college grads vs. non-college grads is bogus, the college grads have higher IQs, higher motivation, wealthier families, so they would have earned more even if they had not gone to college.

Wealth effects mean that merit does not coincide with placement. Prestige schools are better in every way despite the special pleading that I see in this comments thread.

What motivates parents to stress over Harvard is a mixture of love and a very real recognition that it creates opportunities, even for students of lesser ability, and these opportunities often have as much to do with being able to pay the price of admission as with academic ability.

Harvard is famous for the maxim: "if you can get in, you can graduate." A student who flunks out after a few terms of Harvard and then transfers someplace else is far ahead of someone who never went. They will have been exposed to better peers, took better courses, and made at least a few contacts. Also, the choice is rarely between getting a Nobel and "just" getting tenure track at an Ivy. The choice is often between getting a job in the field of your choice or not.

It's nice to go to college near where you will live the rest of your life so you have your college friends nearby.

I know this is an old thread, but a recent WSJ article prompted me to make
this post on my blog, on the subject of top schools vs. lesser schools.

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