By Aimee Picchi
/ MoneyWatch
More than one-third of the wealthiest people in the U.S. attended one of just eight elite universities, according to a new study from wealth consultancy Henley & Partners.
There are about 9,600 so-called centimillionaires living in the U.S., or people whose net worth is greater than $100 million, the report noted. About 35% of them attended one of eight U.S. universities: Harvard, MIT, Stanford, the University of Pennsylvania, Columbia, Yale, Cornell and Princeton, the analysis found.
The report comes amid a battle over the future of admissions to America's top colleges, with the Supreme Court currently weighing affirmative action admissions programs. At the same time, many elite colleges are under fire for practices like legacy admissions, which give preference to children of alumni, with critics saying they reinforce wealth and privilege.
And acceptance rates to the top colleges and universities have continued to sink to new lows, with more applicants vying for a small number of seats. Last year, Harvard, for example, accepted 3.19% of applicants, the lowest fraction since it was founded 386 years ago.
About 1 in 4 of centimillionaires in the U.S. work in finance or professional services, representing the largest share by industry. But another roughly 1 in 7 earned their fortunes through the tech industry, a sector Henley & Partners predicts will generate more centimillionaires over the next decade.
To be sure, graduating from an Ivy League institution or an elite tech-based university such as MIT doesn't guarantee that an alum will become a centimillionaire, or even get a foothold in the middle class. But graduates of Ivy League colleges tend to earn considerably more than other college grads a decade after entering the workforce, raking in about $125,000 annually versus $82,000 for other bachelor's degree holders.
"Access to top-tier education is a premise of the world's wealthiest, who maximize their children's prospects to build greater inter-generational success and affluence," notes John Milne, group head of education services at Henley & Partners, in the report.
The findings track the most recent degree earned by centimillionaires, which means that the report includes graduate school degrees such as MBAs, noted Andrew Amoils, head of research at New World Wealth, who worked on the report.
Some of the centimillionaires are people who have inherited money, while others are self-made, he noted.
And the concentration of ultrawealthy graduates from a handful of elite schools is even greater in other nations, Amoils noted. For instance, in Egypt and South Africa, about 10% to 20% of the ultrawealthy attended one elite university. Compare that with the U.S., where 7% of the ultra-wealthy went to Harvard, he said.
The concentration isn't as extreme in the U.S. due to the high number of colleges and universities within the nation, he added.
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Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
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As a seasoned expert in education, social mobility, and wealth dynamics, I've closely followed recent studies and reports that shed light on the intricate relationship between academic pedigree and financial success. The article you've shared, authored by Aimee Picchi on MoneyWatch and updated on February 22, 2023, delves into a study conducted by wealth consultancy Henley & Partners. My comprehensive understanding of these topics allows me to dissect and expand upon the concepts presented in the article.
The study reveals a striking correlation between the educational backgrounds of the wealthiest individuals in the United States and attendance at just eight elite universities. Among the 9,600 centimillionaires in the U.S., comprising individuals with a net worth exceeding $100 million, a staggering 35% are alumni of Harvard, MIT, Stanford, the University of Pennsylvania, Columbia, Yale, Cornell, and Princeton. This finding speaks to the profound influence of certain institutions in shaping the financial elite.
The current backdrop of the article involves a contentious debate over the future of admissions to top-tier colleges in the United States. The Supreme Court is deliberating on affirmative action admissions programs, while elite colleges face criticism for practices like legacy admissions, which favor the offspring of alumni. These practices are accused of perpetuating wealth and privilege. Simultaneously, admission rates to prestigious institutions are plummeting, exemplified by Harvard's record-low acceptance rate of 3.19% last year.
Furthermore, the report emphasizes the dominance of specific industries among centimillionaires, with approximately 25% working in finance or professional services and 14% accumulating wealth in the tech sector. Henley & Partners predicts a growing number of tech industry-affiliated centimillionaires in the coming decade. While attending Ivy League institutions or elite tech-based universities doesn't guarantee financial success, graduates from these institutions tend to out-earn their counterparts, with Ivy League graduates earning about $125,000 annually, compared to $82,000 for other bachelor's degree holders a decade into their careers.
The article also touches upon the global perspective, noting that the concentration of ultrawealthy individuals from a select few elite schools is even more pronounced in other countries. For instance, in Egypt and South Africa, 10% to 20% of the ultrawealthy attended one elite university, surpassing the U.S. where 7% attended Harvard. The concentration is attributed to the high number of colleges and universities in the U.S., which dilutes the dominance of a few institutions.
In summary, this article highlights the intricate interplay between education, wealth, and societal structures, providing valuable insights into the factors influencing the financial success of the elite in the United States and globally.
