Why are Harvard grads still flocking to wall street?

• Author: Binder, Amy J.

STUDENTS FROM ELITE COLLEGES MARCH OFF TO JOBS AT THE BIG BANKS AND CONSULTING FIRMS LESS BY CHOICE THAN BECAUSE OF A RIGGED RECRUITING GAME THAT THE SCHOOLS THEMSELVES HAVE HELPED TO CREATE.

In 2010, Bastian Nichols moved into his freshman dorm at Harvard without much thought of what he would do after graduation. He felt sure that in time he'd find a career that matched his passions (among them, journalism and travel), but while in college he would experiment at becoming "a more interesting person." * His concentration in psychology and comparative literature matched his general philosophy. So did his choice of summer jobs, which ranged from leading a bike trip through Austria and working in a theater in Croatia to doing post-production work in an Italian film company.

Yet, as senior year approached, Nichols began to feel anxious about life after Harvard. He described being "scared because I was like, 'Crap, I've got a year left, and I just don't even know what I could possibly do.'" Feeling he had few choices, in the early weeks of his senior year Nichols began working with Harvard's Office of Career Services to find a job in management consulting. Much to the dismay of peers who thought that at least he would be a holdout, he will begin his job at one of the country's top three consulting firms this fall.

Nichols followed a path that is now well worn by a huge segment of America's "best and brightest." It starts when they arrive as freshmen on elite campuses, full of a sense of idealism and limitless possibility. It quickly leads to a bizarre status game in which they wind up in a frenzied competition with each other over jobs that they had previously never heard of or thought of as dull and lacking much social purpose.

The most obvious case in point is the huge number of elite university students who wind up working on Wall Street or in a handful of elite management consulting firms such as McKinsey & Company or Bain. In 2007, just before the global financial meltdown, almost 50 percent of Harvard seniors (58 percent of the men, 43 percent of the women) took jobs on Wall Street. That number contracted sharply during the Great Recession, but after 2009 it began rising again. Among this year's graduating class at Harvard, 31 percent took jobs that will channel their energies into derivatives, mergers, and often destructive outsourcing. And many more tried out for such positions. According to a study by the sociologist Lauren Rivera, a full 70 percent of Harvard's senior class submits resumes to Wall Street and consulting firms.

Meanwhile, among Harvard seniors who had secured employment last spring, a mere 3.5 percent were headed to government and politics, 5 percent to health-related fields, and 8.8 percent to any form of public service. Only high-tech fields captured the interest of graduating seniors at anywhere near the level of finance and consulting, and even this seemingly healthy countertrend has problems. (See "Is High Tech the Answer?," page 58.)

What explains this skew in how America's top students wind up applying their talents?

With rare exceptions, the explanation does not lie with the values students pick up from their professors, most of whom are horrified that so many of their proteges march off in lockstep to banking and consulting. Bastian Nichols recalled that when he told a faculty member that he had landed a job at McKinsey, the professor's body language said it all. "He was sort of like, 'Oh, there goes another one; we've lost another one to the consulting venue.'"

Nor does the explanation reside in some generational change that has caused huge numbers of bright young Millennials to adopt Michael Milken or Mitt Romney as a role model. In fact, like Nichols, many if not most students who find themselves working on Wall Street tend to have much broader interests that they have set aside. Consequently, as Kevin Roose has written in his new book, Young Money, many wind up hating their jobs. Incessant Excel and PowerPoint drudgery, being on call to superiors at all hours of the night, putting in eighty to a hundred hours of work per week, traveling constantly, in the case of consulting, and feeling, overall, like a cog in a meaningless machine--all work against a balanced, productive life. The search for exit strategies becomes a preoccupation of many who take these positions.

Nor is the explanation that it was ever so. According to Karen Ho, an anthropologist at the University of Minnesota and the author of Liquidated: An Ethnography of Wall Street, students interested in corporate America in the mid-twentieth century tended to choose management training in industrial, aerospace, or chemical industries to earn their stripes. Wall Street partners did recruit a handful of Ivy League undergrads through networks of upper-class family and friends and, later, more from MBA programs. But comparatively few undergrads went directly from campus to Wall Street. Indeed, the big draw, especially in the 1970s, was the law and medical schools.

One partial explanation for why career routes have changed is, of course, the money that newly minted graduates from top schools can make on Wall Street or with consulting firms. Entry-level analysts typically make $70,000 to $90,000 a year, with the prospect of making much more. But for bright students from elite universities, there are lots of opportunities in many other fast-growing sectors, including energy and health care. Yet comparatively few wind up in such occupations.

Moreover, assuming that people choose careers with regard only to money is naive, and particularly so when it comes to highly status-conscious and competitive students at top universities. In order for large numbers of elite students to end up working at jobs that most had never heard of when they arrived on campus--and that most will find soul killing--they have to first learn that these jobs exist and come to think of them as prestigious. How does that happen?

To gain insight into this question I, along with two graduate students, Nick Bloom and Daniel Davis, interviewed sixty students and recent alums at Harvard and Stanford. Although not based on a random sample, our study included students from a variety of backgrounds, majors (called "concentrations" at Harvard), and career plans--or actual first jobs, in the case of alumni. Our research shows that students don't just gravitate automatically to jobs in finance and consulting. Rather, this is in large part a story of universities helping to organizationally manufacture students' aspirations for these positions.

Before students can clamor for jobs in investment banks or consulting firms...