Research Findings

Not covered in ivy: The educational backgrounds of American business and political leaders

March 13, 2018

Elite theorists have long argued that pathways into corporate and political leadership run through Ivy League and Ivy League-type colleges – this is known as elite status transmission theory. According to a study I recently published with Sarah R.K. Yoshikawa, it may be time to retire at least the strong forms of this theory.

The theory holds that a well-traveled road led from wealthy families through Ivy League institutions into executive suites. We focused on the nation’s top 39 undergraduate colleges in the United States, as identified by U.S. News and World Report. These colleges included both private research universities like Harvard, Yale, and Stanford, and private liberal arts colleges, like Williams, Amherst, and Pomona.

These colleges produced 18 percent of senior executives and political leaders in our sample of nearly 4,000 leaders studied in the fall of 2014. In sheer numbers, public universities were more prolific producers of these leaders than private universities and liberal arts colleges. The University of Michigan and the University of Illinois rivalled Harvard and Stanford. (Of course, the larger size of universities like Michigan and Illinois meant that the odds of reaching the executive suite were much lower – five to six times lower – for the top public research universities as compared to the top private colleges.)

We found that it is more important to attend an elite graduate program than an elite undergraduate college. About two-thirds of the people in our leadership sample had graduate degrees, overwhelmingly from either business or law schools.

The top 18 business schools and the top 14 law schools produced a large plurality of the leaders we studied who had graduate degrees. Forty-five percent of those with business degrees came from one of the top 18 business schools, and 37 percent of those with law degrees came from one of the top 14 law schools.

Where most previous studies focused on undergraduate education, our work makes clear that the focal point in social recruitment to elite positions has moved to graduate education, reflecting the robust growth in graduate degrees over the last several decades.

Even so, the majority of senior executives and political leaders in our sample attended neither an elite college nor an elite graduate school. The American business and political elite is more open than many people, including many social scientists, imagine.

Perhaps our most important finding had to do with inter-industry variation. It turns out that different industries are much more or much less inclined to recruit from elite colleges and graduate programs. The variation ranged from nearly one-third having elite undergraduate educational backgrounds in Internet services to just over 10 percent in construction and real estate.

Something similar was true for graduate degrees: Of the executives with business degrees, 55 percent in Internet services had degrees from one of the top 18 business schools compared to fewer than 40 percent in construction and real estate.

We examined 15 industrial sectors (including government). We theorized that we would find higher levels of elite recruitment in industries that manipulated symbolic media – Internet services is a perfect example – as compared to those – like construction – that transformed the material world. Some industries – chemicals and energy are good examples – are primarily concerned with transforming the material world but also employ comparatively high proportions of workers with advanced degrees. We theorized that these industries would stand in the middle between those that manipulated symbolic content and employed high proportions of workers with advanced degrees and those that did neither.

These are different dimensions of the intellectuality of industries. We chose our industrial sectors with this theorization in mind. Internet services, financial services, media and entertainment, computer hardware and software were high on both dimensions of intellectuality. Aerospace/security, health care, chemicals, pharmaceuticals and telecommunications employed comparatively high proportions of workers with advanced degrees even if they were primarily concerned with transforming the material world. The construction, energy, automotive, food products, and apparel industries were low on both measures of intellectuality. With the exception of the apparel industry, levels of recruitment from elite undergraduate colleges lined up precisely as we expected.

Industries also showed distinctive regional profiles, with Internet services and entertainment media firms, for example, located primarily on the coasts, and energy and health care firms located primarily in the heartland. We found distinctive regional effects also, with firms located on the coasts, quite apart from their industry, tending to recruit more often from elite colleges and graduate programs. This helps to explain the anomaly of the apparel industry. Major apparel firms tend to be located on the East Coast in close proximity to the majority of elite colleges in our sample.

Our study demonstrates the importance of taking industry and regional effects into account before leaping to conclusions about how status transmission works. At least this is true for the United States. The energy industry, located primarily in the southwestern and southern states, has its own bases of status transmission but these bases run through the University of Texas – Austin, Texas A&M, the University of Oklahoma, and Colorado School of Mines, not Harvard, Yale, and Princeton.

Principles of selection work differently in the worlds of higher education and corporate America. Students are selected into selective colleges and universities because they have excellent grades and SAT scores, have talents that are in demand by colleges (such as musical or thespian skills), have done charitable work in volunteer organizations, and sometimes also because they have a family connection to the college.

Corporations select executives on a different set of principles. These include a strong interest in pecuniary matters; taking on and succeeding in big, visible organizational projects; creating value in the units for which one is responsible; impressing one’s superiors; well-timed career moves; and careful maintenance of networks with other upwardly-mobile executives. Personality characteristics such as risk-tolerance and extroversion can also be important. These different principles of selection help to explain our results.

In the end, elite colleges may be more important for providing insurance that students will not fall out of the upper middle class than for producing leaders.

Many of the advantages of elite colleges are geared toward producing social status insurance. These include comparatively rigorous course work, visits from prominent alumni, prestigious internships, and expectations for membership in multiple student clubs and organizations.

Large public flagship universities, their nearest competitors, are two to five times larger. Some who attend public flagships do not complete their degrees, and many others fail to gain a foothold in a well-paying professional or managerial career. Because of their size and lower levels of selectivity, they cannot offer the same social status insurance that elite private colleges can offer.

Our work indicates that a new understanding of recruitment into the American leadership stratum is necessary. This new understanding will de-emphasize, to an appropriate degree, status transmission from affluent families through Ivy League colleges into the “power elite.” It will incorporate variation based on differences between industries that manipulate symbols and employ many highly educated workers and those that transform the material world and employ few highly educated workers. It will consider propinquity effects between the location of universities and the location of firms. It will also acknowledge the role of the country’s leading public universities, and the increasingly pivotal impact of elite graduate programs in the preparation of American business and political leaders.

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