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The Prestige Trap

Progress Studies7 min read

Three industries have come to dominate a disproportionate amount of students' attention on Ivy League campuses: finance, big tech, and consulting. When you subtract out the students attending grad school or who don't immediately enter the workforce, nearly half choose one of these fields.1 Why?

Why the Big Three?

The simplest explanation is money. The Big Three offer a higher salary on average than other industries, attracting a greater number of students. However, many companies outside tech, consulting, and finance recruit on elite college campuses too, garnering little attention from students. For example, several consumer packaged goods companies recruit through Harvard's on-campus recruiting program offering compensation similar to entry-level management consulting, but they are seldom the talk of campus. Money alone fails to explain the concentration in the Big Three.

Neither is it interest. The average Harvard student would probably prefer to work on Google Maps over Kraft Mac & Cheese, but this doesn't explain why students focus on a narrow set of companies within an industry as well. Recruitment for consulting centers almost entirely on three firms: McKinsey, Bain, & BCG. The work and compensation at a boutique consulting firm doesn't differ substantially, yet these three command almost all the attention of elite students' recruiting for management consulting.2 Holding interest constant, students' decisions are still quite clustered in a few firms.

Often, these firms are simply described as "better." But by which metric? There are rankings of course, but most are able to cite the top three three without needing a sophisticated methodology.3 They just know that these firms are the best but not why. By better, what people really mean is that these firms are more prestigious.4 This same emphasis on a few firms takes place in other industries too. Goldman Sachs and Blackstone are favored over small finance shops. Google and Facebook over startups. This is not because these companies are more interesting or necessarily more lucrative to work for; they are simply "better" in the eyes of students.

Prestige is a measure of how much better. It acts as a funnel that shapes not only the industries students pursue but also the companies within those industries they choose. And ambitious students, if they're not careful, can find themselves following the path of least resistance without considering whether or not prestige actually serves them.

Peer Pressure

Prestige is a form of peer pressure that influences one's decisions on what to work on and how to value things. When I hear people talk about peer pressure, I conjure up images of high schoolers cajoling one another into smoking weed. I blame the regular D.A.R.E. workshops that my elementary school hosted several times a year that encouraged us to "just say no." But the peer pressure behind prestige is subtler. No one will ever explicitly ask you to take one of these jobs. The only person you will ever have to say no to is yourself.

When I first arrived to Harvard, I was taken aback by the degree to which prestige was everyone's measuring stick of choice. In hindsight, I'm not sure why my 18-year-old self was surprised that a university which prides itself on external prestige would be controlled internally by similar forces. I made the same mistake most do when they reason formally about smart people: they assume their intelligence insulates them from peer pressure.5

Prestige, like peer pressure, outsources your decision making. But are others better equipped to make a decision about your future than yourself? Instead of making an independent decision based upon the facts, you come to rely upon the opinion of the crowd.

This explains why I was so confused about career conversations with my peers in the past. My baseline assumption was that they rationally evaluated all jobs available to them and then made a decision about where to work. In reality, most did the opposite. They already knew where they wanted to work and then developed their reasons ex post facto.

The Roots of Prestige

Prestige is not an immutable quality inherent to a company, but rather a product of one's social environment. There are many college students who would love to work for a Silicon Valley startup, but I know of few Harvard students who'd prefer startups over big tech. This isn't an economic decision—recruits of later-stage startups can command the same or even better compensation than FAANG while also guaranteeing stability—but I've never heard of a Harvard CS major wanting to work for Stripe.6 This is surprising since Stripe is very prestigious within the Valley itself. What's prestigious in one place isn't necessarily prestigious in another, as social environments vary.

The best critique for prestige I've seen so far comes from Paul Graham:

"Prestige is just fossilized inspiration. If you do anything well enough, you'll make it prestigious. Plenty of things we now consider prestigious were anything but at first. Jazz comes to mind—though almost any established art form would do. So just do what you like, and let prestige take care of itself."

Prestige is just a heuristic for replicating the success of those that inspire us in our own social environment. The Big Three represent "fossilized inspirations" of incredibly successful individuals for many elite students. These same ambitious students, wanting success themselves, seek out prestige thinking it is the missing ingredient to excellence. But this is a fatally flawed formula. Exposure to prestige can't make you successful any more than spending time around rich people can make you wealthy.7

It is the excellence of the individuals behind the organization that make it prestigious, not the other way around. Harvard is an excellent university because its students are excellent not because it made them that way. If it were the inverse, there wouldn't be such an emphasis on selectiveness in admissions since the institution could simply make its students world class. Any random group of eighteen-year-olds would suffice. But we know this not to be true. That is why the prestigious are obsessed with selecting for excellence in their recruits—their brand depends upon it.

Goodhart's Law

Why don't more people realize that prestige is just a byproduct of success? The simplest explanation is that we overfit with our pattern matching. We see so many successful individuals in one domain that have a resume that looks a particular way, and we assume our resume must look the same. Because these opportunities are often time-limited and scarce, and given the environments in which they appear are often competing for individuals' attention with many other demands, we don't have the chance to figure out what really underpins success in general, much less in a specific context or industry. It's easier to take the consensus path that seems to have worked for others in the past. It's easier to just use the heuristic.

But there's more to it than that. We've begun to conflate prestige with success itself, skewing the incentives entirely. This is something Harvard students understand intuitively. For most Ivy Leaguers, the most impressive thing they've accomplished is to achieve admission to their university. When you're deemed successful because you went to Harvard rather than celebrated for what got you there in the first place, you learn to game the system. This is Goodhart's Law in action.

We see this in hiring practices too. It's difficult for companies to measure talent directly, so they often evaluate a candidate by their credentials instead. Tech is relatively egalitarian, with many companies turning to whiteboard interviews and portfolios to rate candidates. Finance and consulting are much less forgiving with a strong emphasis on pedigree.

The more this dynamic of credentialism takes place, the stronger the incentive there is to optimize for prestige and forego individual excellence. Ideally, every university and company has a perfect selection process and no one's credentials would go unearned. In reality, these processes are imperfect and inevitably individuals will leverage their credentials regardless their underlying abilities.

Elite college students are a good bellwether for prestige's prominence in society. The most ambitious are intimately familiar with what got them there, not the qualities they're supposed to be measured for. My personal experience suggests that the prestige problem is already quite bad and is only getting worse. What does this mean for society?

The Hollowness of Prestige

One obvious implication of a focus on prestige is that it may be reducing our collective excellence. If chasing prestige is an ineffective way to achieve true excellence, then it follows that this strategy may be reducing the number of individuals who are actually successful. What's worrisome is that because we conflate prestige with success itself, we may not even notice this is happening.

An overreliance on prestige also shuts out the less privileged. Prestige-driven hiring practices and a focus on pedigree is the most harmful to the individuals that can't obtain prestige in the first place. Thankfully, elite universities are increasingly egalitarian and diverse in the students they admit, but they are still not representative. People are being left behind and their talents wasted.

But worst of all, the most harrowing implications of a prestige-driven society are on the individual level. While recruiters may confuse a Stanford degree for evidence of world-class programming skills, the candidate won't. We know when we're optimizing for credentials vs. pursuing excellence for its own sake. There is something deeply fulfilling about the latter and rather unsatisfying about the former.

Just as choosing a job based on prestige outsources our decision to the crowd, relying upon credentials for fulfillment relegates our happiness to the opinion of others. Inevitably, you'll never measure up when the metric is so subjective.

Prestige can take the ambitious far, but it can't bring them excellence. And, writ large, unless we are led by those who are excellent, society as a whole will suffer.

Thanks to Jamy Dinkins and Raymond Wang for reading drafts of this.

  1. Harvard College Seniors 2019: Next Steps
  2. Arguably, students would be better suited to these boutique firms as they offer more opportunity for career advancement, greater responsibility, etc.
  3. Indeed, I could name these three from memory due to my time at Harvard, despite having never recruited for consulting or even knowing what it was prior to college.
  4. Ironically, the ranking methodology relies upon a survey administered to consultants where the top ranking criteria, given 30% weight, is "prestige." At least college rankings try to be less conspicuous.
  5. Notwithstanding the fact that half of Harvard's 2019 graduating class admitted to smoking weed during college. I guess those D.A.R.E. workshops didn't work after all.
  6. This is not to say that there aren't Harvard CS grads at Stripe; there certainly are many. This is merely to illustrate a point about what students find prestigious at the time of writing.
  7. Exposure to the rich may very well increase one's net worth. But is it the wealthy's presence that matters or the knowledge, relationships, etc. they impart upon you?

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© 2020 by Wes De Silvestro. All rights reserved.