Why are Harvard’s alumni so wealthy?

[Added: Solip­sist made good com­ments that par­tially ac­count for the phe­nomenon, and Dou­glas_Knight pointed out that the figure of $200m+ be­low should be $30m+]

This ar­ti­cle re­ports that Har­vard has 2,964 alumni worth $200+ mil­lion, with a to­tal wealth of $622 billion. Th­ese figures are stag­ger­ing:

  • The uni­ver­sity with the next high­est figures (Univer­sity of Penn­syl­va­nia) are ~2x less, and the figures for Yale (for ex­am­ple) are ~4x less.

  • If you as­sume that Har­vard has ~60 liv­ing classes of alumni, each of which has ~2,000 stu­dents, then the wealth per grad­u­ate com­ing from the alumni worth $200+ mil­lion alone is ~$5 mil­lion. Fur­ther­more, the frac­tion of Har­vard alumni with $200+ mil­lion is on the or­der of 2%. [Added: from here: “Of Amer­i­cans, some 30,000 have more than $100m and 2,800 have more than $500m”, so < 0.01% of Amer­i­cans have that much money.]

Note that Bill Gates “only” has ~$75 billion and that Mark Zucker­berg “only” has ~$30 billion, so that they don’t ac­count for Har­vard’s de­ci­sive ad­van­tage over other uni­ver­si­ties.

What is go­ing on here? Why would Har­vard come out ahead by such a large mar­gin? Its ac­cep­tance rate is smaller than those of Stan­ford, Yale and Prince­ton, but by no more than 25%. More­over, this has been true historically

One can ask a similar ques­tion of Univer­sity of Penn­syl­va­nia, which is sig­nifi­cantly less se­lec­tive than Yale and Prince­ton, but has a de­ci­sive ad­van­tage over them.

Some pos­si­ble ex­pla­na­tions for the dis­crep­ancy:

  • Har­vard se­lects stu­dents with higher ex­pected earn­ings.

  • Har­vard se­lects stu­dents from fam­i­lies who are already wealthy (more than other top schools: the wealthy alumni are not self-made).

  • Stu­dents who as­pire to make a lot of money choose Har­vard (over other top schools).

  • Go­ing to Har­vard in­creases stu­dents’ earn­ing power (more than other top schools), for ex­am­ple, through bet­ter net­work­ing op­por­tu­ni­ties.

Re­gard­less of which of these ex­pla­na­tions hold, there re­mains a ques­tion of why they would hold.

Is Har­vard a bet­ter choice than other uni­ver­si­ties for stu­dents who as­pire to be wealthy than other top schools?

Even if Har­vard has his­tor­i­cally been bet­ter for in­creas­ing ex­pected earn­ings, this may have ceased to be the case be­cause of the rise of the tech sec­tor and Stan­ford and MIT’s fo­cus on tech.