It’s easy to imagine that the well-trodden path from the Ivy League to Wall Street has always existed. But it’s a relatively recent phenomenon, nurtured through deliberate effort and investment in the 1980s. (Before then, medicine and the law were the main attractions.)
It didn’t take long for investment banks—along with their service economy corollary, consulting firms—to create an elaborate system that funnels elite students into internships and jobs they never imagined themselves in.
Writing in Washington Monthly, sociologist Amy Binder, a professor at the University of California, San Diego, described a recent study in which she and her team interviewed 60 students or recent graduates of Harvard and Stanford University. Many of the subjects said they went to school with no intention of becoming bankers or consultants. They started college knowing little about these professions, and harbored a sense that they would be dull and not particularly meaningful—only to find themselves competing for jobs in these fields.
How did this happen?
Pay to play
The students described an environment in which recruiting efforts by banks and consultancies are omnipresent. It’s not by accident, and it didn’t come for free. As Binder noted:
To get to those kids, the nation’s top banks and consulting firms began by competing with each other to become “platinum” members of the career services programs run by the most elite schools. Winners of this pay-for-play competition get the best tables at campus career fairs, access to students’ email in-boxes, entrée to the most impressive banquet rooms for holding information sessions and receptions, bundled delivery of applicants’ résumés, and space and scheduled times to hold one-on-one interviews, among other goods and services known as “recruitment.”
The result is an highly visible, well-defined process. It’s powerfully appealing to students who have spent the previous 18 years on a structured pathway to get to an elite school, only to face uncertainty about what to do next.
The prestige pitch, and fear of missing out
The recruiting process starts very early—another draw for students who are eager to lock down their plans—and it happens at a frenetic pace, making many students worry that they will miss out, and potentially compromise their professional futures, if they don’t participate right away.
That pressure, combined with the emphasis that recruiters put on “what it means personally and socially to work for a high-prestige firm,” Binder writes, has a strong effect.
Where these students go to school is the reason the firms want them in the first place—pedigree matters to firms trying to persuade clients to buy expensive services. But the fact that so many in these careers end up unhappy and looking for an exit indicates at least some degree of mismatch.
Of course, often the short tenures are planned. While 31% of Harvard students last year planned to go into finance or consulting (a number down from pre-crisis heights, but climbing again), only 6% said they intended to stay in the profession, something that most two-year analyst programs explicitly acknowledge.
Meanwhile, the lure of Wall Street and the consulting business reduces the fraction of elite students going into public service, health care, or any number of other industries that are in need of talent and now find themselves several decades behind investment banks and consulting firms when it comes to competing for graduates of elite colleges. The lure of technology companies has been strengthening of late—but even Silicon Valley has seen nothing like the long-term recruiting success of banks and consulting firms.