University Career Counseling Incentive Problems

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Marina Keegan writes an interesting Yale-focused piece about the fact that 25 percent of Yale graduates end up working in finance or consulting despite the fact that approximately 0 percent of incoming freshmen aspire to join these fields.

She makes a number of good points, but at one point dismisses the idea that we should blame career services offices for this, dismissing that as scapegoating. I think that may be a mistake. If you think about the basic “business model” of a fancy donor-funded university, it has a very strong interest in encouraging people to go into fields where they get very high financial incomes. Yale can’t ask you to donate a share of your satisfaction with your work or your strong relationship with your friends and children. It can ask you to donate a share of your income. So it needs you to have a high income. Indeed, they sort of benefit if you manage to combine high income with a vague sense of self-loathing that you feel like salving through charitable donations. I don’t think elite university administrators are sitting around saying “what can we do today to discourage our graduates from becoming moderately successful small business proprietors” but incentives do matter. The selection process for elite colleges generates a lot of bright, hard-working conformists. The incentives facing elite colleges encourage them to encourage people to work very long hours for very high pay in finance and consulting. Conformists tend to end up doing what they’re encouraged to do. And the system trundles on.