Do prestigious universities lead to higher salaries?

Most families believe that a degree from an elite university can lead to a better job and consequently a higher salary.

Interestingly, a new research contradicts this notion as it found out that the prestige an undergraduate institution has little effect to those who major in Science, Technology, Engineering and Maths (STEM) and those who greatly benefit from a prestigious university are those who take courses outside STEM such as business, humanities, social science and arts.

In business, more prestigious schools may offer better alumni networks and other connections with potential employers. In other fields of study, more prestigious schools may offer better peer connections, faculty, university resources and, at least in social science and the humanities, access to better graduate programs.

Furthermore, the survey shows that there is no statistically significant differences in average earnings for STEM majors between selective schools and either mid-tier or less-selective schools. The assumption is that the skills students learn in these fields appear to trump prestige—possibly because curriculums are relatively standardized and there’s a commonly accepted body of knowledge students must absorb. So, a student may not need to attend the best possible school to ensure a good salary after graduation.

Commissioned by the Wall Street Journal, the survey looked into 7,300 college graduates 10 years after graduation.