Why are Harvard's alumni so wealthy?

JonahS

[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.

[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.

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.

The numbers in the article look very much like a power-law distribution. Power-law distributions are often the result of self-organizing phenomena, so it might be that Harvard actually doesn't do anything special or explicit compared to other elite universities. It's probably just the result of an initial lead coupled with a network or snowball effect.

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Why are Harvard's alumni so wealthy?

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Why are Harvard's alumni so wealthy?

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