Grads from diverse classes get higher salaries | Racial diversity in higher education is associated with higher student salaries

Key portions of the article:

>Doing this sort of research is challenging, largely because there are no clear metrics. Outcomes also vary widely based on factors like school quality, baseline diversity, and the economic conditions at graduation, which can overshadow potential benefits. So while some research has suggested advantages to more diverse cohorts, the evidence remains limited.
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>The new paper responds to these challenges by both narrowing and expanding its focus. It narrows the analysis to business and law schools, tracking only a single outcome: starting salary. At the same time, the researchers broaden the research, drawing on decades of data from nearly 350 schools, including nearly 3,000 business school grads and even more from law schools, spanning over 20 years of graduating classes.
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>The data doesn’t include every graduate of these programs, typically covering about 75 percent of each class. But Mitra, Golder, and Topchy assess diversity by analyzing the available student data and examining the overall diversity of the school’s admitted classes.
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>The authors took a deceptively simple approach, examining the correlation between racial diversity in a school’s cohort and graduates’ starting salaries. In business schools, high-diversity cohorts earned starting salaries that were a standard deviation or more above the median 966 times out of 3,964 cohorts. For low-diversity cohorts, that number was just 534. For relatively low starting salaries, high-diversity cohorts showed up 531 times, while low-diversity ones appeared 933 times, largely reversing the numbers.
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>The pattern held for law schools. High-diversity groups saw high salaries in 1,128 of 3,386 opportunities, compared with 490 for low-diversity cohorts. The same was true for both types of graduate programs when the authors measured diversity using data for the entire entering class rather than only the students being analyzed.
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>The authors provided a long list of possible confounders. For example, they removed the top and bottom 5 percent of starting salaries to rule out outliers (which didn’t affect the results). They gave each school a separate time trend to see if there were local economic factors, but the results stayed largely the same. They also tested various measures of diversity, examined different diversity thresholds, and controlled for university prestige, size, and urban settings. None of those changed the trends.
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>They also plotted each school’s cohorts individually and found that the diversity/salary correlation was positive and significant 40 times and negative and significant 19 times. For law schools, the numbers were 64 positive and 28 negative. Switching from median starting salary to mean starting salary had no effect.
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>Only one of the 13 added any nuance to the big picture. In that case, the trend was stronger for students entering the public sector or joining large companies. Otherwise, there was little evidence of factors that might be throwing off the results.
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>Is there a way these two factors are linked that isn’t causal and wasn’t considered by Mitra, Golder, and Topchy? Possibly. But the effect appears robust and seems to show up no matter how the analysis is done.
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>It’s obvious that the study was motivated by the Supreme Court ruling blocking affirmative action. The authors note that the court’s decision rested on three points: that the benefits of diversity were difficult to quantify, that they weren’t directly connected to the goals of education institutions, and that there was no clear standard for determining when an affirmative action program had accomplished enough to be ended.
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>The authors argue that they’ve cleared those objections by providing a measurable goal that serves as a valid endpoint for professional education. They also note that the measurement itself provides an indication of when diversity is sufficient that all entering classes benefit from it. On that basis, they argue that the ruling ending these programs should be reconsidered.

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Research link:

[Racial diversity in higher education is associated with higher student salaries](https://www.nature.com/articles/s41586-026-10425-7)

Abstract:

>The US Supreme Court overturned affirmative action in 2023; however, higher-education institutions continue to make admissions decisions that affect the racial diversity of their student cohorts. Therefore, it is important to know whether racial diversity in an educational cohort is associated with higher or lower student cohort salaries at graduation. Learning theory argues that racial diversity promotes student learning, which should increase salaries. However, well-documented racial wage discrimination indicates that higher racial diversity should decrease salaries. As highlighted in the recent Supreme Court decision, there is no empirical evidence on racial diversity’s association with student cohort salaries. Here, to address this gap, we compile two unique and comprehensive datasets: 2,964 Master of Business Administration cohorts across 141 business schools over 29 years and 3,386 Juris Doctor cohorts across 200 law schools over 21 years. In both datasets, we find that higher cohort racial diversity is associated with higher cohort median salaries at graduation across numerous model specifications and after controlling for student quality, universities and years. The key implication is that policies to increase or leverage racial diversity (for example, affirmative action and diversity, equity and inclusion programmes) enhance human capital and benefit society.

That is a very spaghetti monster correlation.