Reform the College Admission Process


In the modern labor market, a college degree is increasing in importance. Job and wage growth for college-educated workers has far outpaced that for non-college-educated workers during the recovery. A degree from an elite university is of particular value as it serves as a gateway to elite occupations such as investment banking, as firms like those on Wall Street will only recruit from elite “target schools.” Given the current college admission system, not everyone has an equal chance at passing through this gateway, which further exacerbates income inequality.

This would be less of an issue if college admissions were strictly merit-based using clear, objective standards such as high school GPA and standardized test scores. Anyone meeting these standards could gain admission. However, this is not the case. Instead, admissions are “holistic,” which means that the universities have a high level of discretion to admit students based on subjective criteria. Given this, the fact that the value of a degree from an elite school is exploding, and the demand for admission slots far outstrips the supply of them, corruption in the admissions process is essentially guaranteed, as seen with the recent college admissions scandal.

Another issue is that of “legacy admissions,” wherein children of parents who attended a particular university get an advantage when it comes to admission. For example, less than 5% of applicants to Harvard University are accepted for admission, but 34% of legacy applicants are. This contributes to income inequality persisting across generations. It becomes much easier to get an elite job and a path to the upper class if one is accepted into an elite university. The odds of being accepted to such a university are substantially higher if one already comes from an upper-class family whose parents attended the university. This causes advancement in America to be based less on merit and more on family background and connections.

There are straightforward things that could be done to mitigate this problem. Malcom Gladwell suggests making it illegal for employers to ask job applicants what university they attended. Others have proposed making college admissions a lottery – anyone can enter a lottery for admission to a particular university. If entries exceed admission slots, admission would be determined by random lottery.

Both of these ideas would eliminate the incentives that lead to corruption in the college admissions process and would force employers to rigorously evaluate candidates based on their talent and skills, rather than using the name of their university. There is no compelling evidence that undergraduate academic quality is correlated with a university’s ranking. Thus, the labor market would be strengthened by increasing the pool of candidates that businesses evaluate for employment. The federal government could require these reforms as a condition of universities accepting federal money. Any university, public or private, that receives federal research grants or federal student aid would have to comply. These reforms would promote a stronger, fairer economy which would reduce income inequality while costing taxpayers nothing.


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