This paper estimates the effect of elite college admission on students’ chances of attaining a) very high income levels, and b) top management positions at publicly traded firms, and explores the importance of peer ties as an underlying mechanism. Zimmerman combines a regression discontinuity design with data linking historical records of college applications in Chile to population tax records and the census of corporate directors and executive managers at publicly traded Chilean firms. Admission to the most selective business-focused degree programs raises the fraction of students with incomes in the top 0.01% of the income distribution by 48% and the number of top management positions they hold by 53%. These gains are larger for students who attended elite private high schools and are near zero for students who did not. Consistent with the hypothesis that peer ties play an important role in driving the observed effects, elite high school students admitted to top universities become more likely to work in management roles with and have income closer in absolute value to their college peers from similar backgrounds than with non-peers from the same degree program or other degree programs in the same cohort.
This paper estimates the effect of elite college admission on students’ chances of attaining a) very high income levels, and b) top management positions at publicly traded firms, and explores the importance of peer ties as an underlying mechanism. Zimmerman combines a regression discontinuity design with data linking historical records of college applications in Chile to population tax records and the census of corporate directors and executive managers at publicly traded Chilean firms. Admission to the most selective business-focused degree programs raises the fraction of students with incomes in the top 0.01% of the income distribution by 48% and the number of top management positions they hold by 53%. These gains are larger for students who attended elite private high schools and are near zero for students who did not. Consistent with the hypothesis that peer ties play an important role in driving the observed effects, elite high school students admitted to top universities become more likely to work in management roles with and have income closer in absolute value to their college peers from similar backgrounds than with non-peers from the same degree program or other degree programs in the same cohort.