Wall Street has long been thought of as a bastion of elitism where Ivy League men rule, to the detriment of women and non-Ivy Leaguers. Is this fair? Obviously, it's a  stereotypical view of the industry, a jaundiced look from afar. There are, after all, many non-Ivy League employees in the industry. 

Kellogg School of Management professor Lauren Rivera has taken an academic look at this issue and delivered some interesting conclusions. Her goal was to look at how employers use and interpret educational credentials in their hiring process. She found "educational credentials were the most common criteria employers used to solicit and screen resumes." However, it was not the substance of the education that elite employers valued but rather its prestige. 

"Employers privileged candidates who possessed a super-elite (e.g., top four) rather than selective university affiliation. They restricted competition to students with elite affiliations and attributed superior abilities to candidates who had been admitted to super-elite institutions, regardless of their actual performance once there. However, a super-elite university affiliation was insufficient on its own. Importing the logic of university admissions, firms performed a strong secondary screen on candidates' extracurricular accomplishments, favoring high status, resource-intensive activities that resonated with white, upper-middle class culture." 

This suggests what some parents in affluent suburbs of big cities have suspected all along. That Wall Street firms are looking for a certain type of person. Riviera finds that "(a) extracurricular activities have become credentials of social and moral character that have monetary conversion value in labor markets and (b) the way employers use and interpret educational credentials contributes to a social closure of elite jobs based on socio-economic status." 

When you think about it, this all makes sense. You could argue that people tend to want to hire people they're comfortable with, pretty much like themselves at their core. They know where to find them. And you'll often hear people say what really matters in most jobs is not brilliance but "brightness," a decent work ethic and the ability to fit in and conduct business with clients and colleagues. Beyond the schools themselves, sports and elite clubs are markers that suggest future success. Perhaps all of those helicopter parents pushing sports (as well as math tutors) on their kids at age four are onto something. Some may be outraged by this. But that's how it is in a lot of industries. When Silicon Valley was riding high, being "nerdy" was actually cool. 

All that said, banks need to have a discussion about whether diversity (beyond males from top schools) will provide benefits to the firm. My sense is that many will conclude it will. The issue then is what to do about it. - Jim