An article in Duke’s student paper reports that graduates still want to work on Wall Street.Do college students still want to work on Wall Street? The question has proved hard to answer. (DealBook said no. The Wall Street Journal, two weeks later, disagreed.)
The newest entry in the financial recruiting debate is an article from The Chronicle’s Sanette Tanaka at Duke University. The student paper seems to come down on The Journal’s side by conveying the unbridled enthusiasm with which Duke graduates, their diploma ink still drying, are “still flocking to the finance industry in massive numbers.”
According to the writer:
Duke is not alone among the nation’s top institutions. The financial services industry tops the list at Columbia University, attracting 26.9 percent of students who found jobs in 2011. At Harvard University, the field has been the most popular among graduates for five years in a row. At Princeton University, 30.4 percent of working graduates went into finance last year.
Free of context, those numbers would seem to buttress The Journal’s claim. But as our colleague Catherine Rampell pointed out on the Economix blog last year, the number of graduates at Harvard, Yale and Princeton going into finance has actually decreased significantly since the years before the financial crisis.
At Princeton, the 30.4 percent of finance-bound graduates last year pales in comparison to 2006, when a whopping 46 percent of Princeton graduates went into finance. At Harvard, although it is true that finance “has been the most popular among graduates for five years in a row,” as The Chronicle states, the percentage of graduating seniors going to Wall Street has fallen to 17 percent last year from 28 percent in 2008.
Duke’s career services Web site doesn’t break out the exact percentage of graduating seniors who choose finance jobs, but if The Chronicle’s claim of “roughly one-quarter” is correct, then the number of Wall Street-bound students is likely to have declined there, too. (In 2008, when the site did break out industry-by-industry percentages, finance claimed 32 percent of survey respondents.)
The Duke paper’s second major claim, about why students want to work at banks, requires some extra parsing.
Using examples drawn from its student body and recent alumni, The Chronicle posits that what makes Wall Street the first choice for top-flight graduates is that:
A) banks are really good at recruiting
B) banks are flooded with proud alumni who want to recruit students from their alma maters
C) bank jobs still pay well, and attract rich kids who want to maintain the lifestyle to which they’re accustomed
D) bank jobs are still seen as the most prestigious, competitive gigs on campus
Points A and B are fairly unassailable – banks are good at recruiting, and alumni loyalty is a real thing. But Points C and D as explanations for the supposed uptick in Wall Street recruiting are somewhat harder to swallow.
Told by The Chronicle’s sources, those points sound something like this:
C): “You’ve got a socioeconomic group at Duke that comes from the 1 percent,” Gardner said. “This group thinks, ‘We should have the freedom to make money.’”
D): “The typical stereotype is to do it for money, but it’s more than that,” Lustig said. “You get to do something that’s well-regarded.”
The Brown Daily Herald published an article this week about socioeconomic diversity on campus. A chart accompanying the article showed that, nationally, the percentage of students seeking bachelor’s degrees who come from families in the top income quartile jumped in 2010 from 2005. You’d expect, then, that the percentage of students going to Wall Street would also increase as student bodies became wealthier; instead, finance recruiting at the top feeder schools was declining.
As for the prestige argument, as The Chronicle points out, the number of students applying to programs like Teach for America is way, way up – despite the fact that T.F.A., unlike Goldman Sachs, is not paying six-figure salaries. And if student interest in both teaching and investment banking is based on reputation, rather than pay, wouldn’t Teach for America’s gain be Wall Street’s loss? At the least, it’s hard to see how Abacus, Greg Smith and Occupy Wall Street could help banks trying to recruit on college campuses.
Granted, Duke and Brown are very different schools. And Wall Street surely still holds an allure for a certain subset of college students that is not likely to fade, no matter how many bailouts, pay cuts and New York Times opinion articles the finance industry endures.
But The Chronicle makes a helpful point in its closing argument, when it points to Ryan Genkin, a Duke senior who studied 1,200-odd job listings from Duke’s career center and found that a full quarter of the listings were from the finance and insurance industries.
In other words, it may not be that the increasingly small chunk of students who go to Wall Street are still enchanted by the world of high finance; it may be that their other options are limited, and that they are responding to a hard sell by college career centers and bank recruiters. Whatever the explanation for finance’s continued appeal, it is likely to lie in the recruiting complex itself, rather than the supposed magic touch of Wall Street banks.
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