People who work in finance had worse grades, took fewer classes in college than everybody else

The 2015 class is an all-boys club.
The 2015 class is an all-boys club.
Image: Reuters/Larry Downing
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Say the word “banker,” and many people will think of boastful, Wolf of Wall Street-type personalities who party all night and skate through their work with casual indifference.

The stereotype isn’t totally wrong, according to a new Harvard Business School study from business administration professor Pian Shu.

Shu’s report, published this month as a working paper, looked at a sample of 6,469 bachelor’s degree recipients from the Massachusetts Institute of Technology (MIT) between 2006 and 2012 to examine links between a graduate’s academic performance and his or her choice of career. Shu found that MIT graduates who went into finance not only had lower GPAs than their peers, they also took fewer courses and were generally less academically inclined.

“Academic achievement in college is negatively correlated with a propensity to take a job in finance,” Shu wrote. “Sizable differences in academic performance begin in freshman year and persist throughout college.”

Though only 6.4% of top-performing MIT students went into finance after graduation, those from the low end of the grade distribution were 16.5% more likely to do so. (The vast majority of MIT graduates choose careers in science, technology, or engineering.)

What’s more, graduates who go into finance seem to have similar backgrounds and interests—all the way back to high school. Finance-inclined people tend to prefer sports over performing arts, and they are much more likely to take on leadership positions within group activities.

The trends continue into college, where future financiers are—confirming the cliché—50% more likely to join a fraternity or sorority than others.

In Shu’s study, those who entered finance careers also self-reported weaker analytical skills, less in-depth knowledge of specific fields, and a shallower understanding of “the process of science and experimentation.”

Of course, the study is limited by its one-school sample and the relative lack of academic diversity at MIT, a campus that specializes in quantitative education. But Shu’s findings, as she told the Harvard Business Review, do suggest America’s worries about the “best and brightest” scientists and engineers in the country going into the finance sector and causing a “brain drain”—a topic that’s seen much heated debate over the past few years—may be largely unfounded.

“Finance does not attract the ‘best and brightest’ future scientists and engineers from MIT, but it hires those who will be most suited to working in finance,” Shu wrote, noting that the field may place more emphasis on social skills and less on analytical skills than science and engineering sectors do.

“Taken together, the results demonstrate that the preferences and skills of graduates who pursue finance are not comparable to those of graduates who choose a career in [science and engineering].” In other words, what a relief: it seems Wall Street isn’t gobbling up the country’s supply of talent, after all.