MINDLESS QUANTIFICATION.

Cornell economist Robert Frank analyzes the positional arms race among universities that aspire to high status, and the students who seek to enroll there.

Because of the bitter competition for those premium salaries, elite educational credentials are often a precondition for even landing a job interview. With so many applications for every vacancy, many consulting firms and investment banks , for example, now consider only candidates from a short list of top-ranked schools.

Degrees from those schools clearly open doors. For example, more than 40 percent of the 2007 graduating class at Princeton landed one of the most highly sought prizes: a position in the lucrative financial services industry.

For all the good that did: all those geniuses had exactly the same preparation for the surprises that hit their sector.  At least a few universities, however, recognized the excess demand for academic prestige and worked to lift their game.

Their main strategy has been to bid more aggressively for the most distinguished researchers, which explains not only the rapid salary growth for top faculty members in the last several decades, but also the fact that teaching loads at many elite schools have decreased by more than 25 percent. Similar, albeit smaller, changes in salaries and workloads have percolated throughout higher education.

Yet no matter how much universities might spend in pursuit of elite status, only 10 percent at any moment can end up in the top 10 percent.

Since the top 10 percent do not provide enough graduates to fill all the high-status jobs, the quest for stronger academic programs is not futile. The problem, however, is getting misinformed stakeholders to do the right thing.

Richard H. Thaler, a former colleague at Cornell and another contributor to the Economic View column, once remarked about an unsuccessful candidate for a faculty position, “What his résumé lacked was five bad papers.” By that, he meant that while the candidate had published several papers containing enough genuinely important ideas to satisfy any rational hiring committee — more than could be said of most faculty members — he had too few to satisfy the bean counters, who fretted about how uninformed outsiders might react to the appointment.

The column concludes with a suggestion that increasing marginal tax rates might do something to stem the competition for credentials.  Perhaps so, but another interpretation of widening salary gaps among graduates of different majors and different universities might be an overproduction of content-free degrees.