John C. Adams, PhD

Very Preliminary Research Findings. In a recent Supreme Court ruling, elite schools are prohibited from considering race in their admissions processes. Critics argue that this decision may perpetuate income inequality. This reasoning seems to assume that graduates of elite universities are in greater demand and have more skill. But is this true? I examine the educational backgrounds of a highly skilled and remunerated labor force -  U.S. mutual fund managers. I find  - see chart below - that matriculation from highly selective schools (top 50 in terms of freshman SAT scores), including the Ivies, is unrelated to job performance (fund returns). But academic honors (grades) is associated with higher skill (better performance). Perhaps not surprisingly, over time the proportion of fund managers matriculating from  highly selective schools has decreased while the proportion with academic honors has increased.  Interpretation? Skill (performance) is largely a matter of work ethic - not educational pedigree.  At least in competitive settings.