By “selective universities,” I mean places like Ivy League schools, along with places like Stanford, MIT, Duke, and the Chicago. Such schools admit only a small fraction of their applicants. However, to reassure both insiders and outsiders that they are open to admitting a broad range of students–whatever their socioeconomic background–these schools also have large numbers of people working departments of admissions to screen and evaluate applicants.
It turns out, perhaps unsurprisingly, that the actual effect of departments of admissions is that the student bodies of these institutions end up including more students from the top 1% of the income distribution than would happen if the schools just admitted students purely by SAT scores. Raj Chetty, David Deming, and John N. Friedman provide the evidence in “Diversifying Society’s Leaders? The Determinants and Causal Effects of Admission to Highly Selective Private Colleges” (Quarterly Journal of Economics, published online October 30, 2025, ungated copies available a various places, like here). They write at the start of the essay:
Leadership positions in the United States are held disproportionately by graduates of a small number of highly selective private colleges. Less than half of one percent of Americans attend Ivy-Plus colleges (the eight Ivy League colleges, Chicago, Duke, MIT, and Stanford). Yet these twelve colleges account for more than 10% of Fortune 500 CEOs, a quarter of U.S. senators, and three-fourths of Supreme Court justices appointed in the last half-century.
From the abstract of the paper, they summarize the results this way (emphasis is mine):
We use anonymized admissions data from several colleges linked to income tax records and SAT and ACT test scores to study the determinants and causal effects of attending Ivy-Plus colleges (Ivy League, Stanford, MIT, Duke, and Chicago). Children from families in the top 1% are more than twice as likely to attend an Ivy-Plus college as those from middle-class families with comparable SAT/ACT scores. Two-thirds of this gap is due to higher admission rates for students with comparable test scores from high-income families; the remaining third is due to differences in rates of application and matriculation. In contrast, children from high-income families have no admissions advantage at flagship public colleges. The high-income admissions advantage at Ivy-Plus colleges is driven by three factors: (i) preferences for children of alumni, (ii) weight placed on nonacademic credentials, and (iii) athletic recruitment. Using a new research design that isolates idiosyncratic variation in admissions decisions for waitlisted applicants, we show that attending an Ivy-Plus college instead of the average flagship public college increases students’ chances of reaching the top 1% of the earnings distribution by 50%, nearly doubles their chances of attending an elite graduate school, and almost triples their chances of working at a prestigious firm. The three factors that give children from high-income families an admissions advantage are uncorrelated or negatively correlated with postcollege outcomes, whereas academic credentials such as SAT/ACT scores are highly predictive of postcollege success.
In the paper, they write:
We consider a counterfactual admissions scenario in which colleges eliminate the three factors that drive the admis- sions advantage for students from high-income families—legacy preferences, the weight placed on nonacademic ratings, and the differential recruitment of athletes from high-income families—and refill slots with students who have the same distribution of test scores as the current class. Such an admissions policy would increase the share of students attending Ivy-Plus colleges from the bottom 95% of the parental income distribution by 8.8 percentage points …
The selective private colleges that are the focus of this study are what economists sometimes call “donative nonprofits,” meaning that they rely on donations (and earnings from an endowment based on those donations) as a major form of income. From a financial point of view, it is unsurprising that a donative nonprofit–with the potential for large future donations in mind–would tend to favor children of alumni or those from the top 1% of the income distribution over other applicants with equivalent test scores. But it’s useful to be clear on what’s happening here: when these selective schools tell potential applicants that they don’t just look at test scores, but instead use a variety of nonacademic criteria like being “well-rounded” or “authentic” for admissions, the actual result of their process is that applicants from families in the top 1% of the income distribution are admitted at a higher rate than others with the same test scores.
