The odds are that a college graduate has no idea whether he or she will make it to the top of the corporate ladder, according to a study published in the latest issue of the American Journal of Economics and Statistics.
“College graduates are not necessarily good or bad, because they may be the wrong kind of people to start a business,” said John Burchfield, a professor of economics at Stanford University who led the study.
“But it’s very important to recognize that they are a subset of people, not the whole group.”
Burchfield’s study focused on college graduates in their mid- to late 20s.
The authors estimated that each college graduate had $150,000 in assets on their resume and $40,000 to invest in their companies.
The study looked at whether the amount of money a college grads portfolio should be invested in would correlate with the probability that he or her would make it up to the second tier of the corporation ladder, which includes CEO and CFO positions.
The researchers found that college graduates were significantly less likely to be in the top two tiers of corporate management positions than those who had graduated from high school or the workforce as a whole.
And college graduates with lower earnings were more likely to earn less money than those with higher earnings.
“In general, college graduates earn less than those without college degrees, and those with college degrees earn less,” Burchfes study said.
“College graduates with higher education are also less likely than those of the general workforce to be CEOs or CFOs.
This suggests that a graduate degree may not necessarily guarantee success in the corporate world.”
The findings suggest that a lack of experience can lead to a lack in management skills, said Kevin McBride, a senior associate professor of business administration at the University of Maryland.
“This is the opposite of the kind of skills that you might want to bring to a business if you’re a manager,” McBride said.
McBride said that his own experience in the management field might have made him more likely than other college graduates to believe that his job as a manager was “just as important as that of an engineer or a doctor.”
“If you’re in the field, you’re going to have to do things,” he said.
“I’m a manager and a scientist and a writer, and I don’t think I’m going to make the cut as a scientist or a writer,” he added.
The study did not look at whether college graduates had any other career goals, and did not consider whether college grad would be better off working at an entry-level job that pays a relatively low salary or starting a new career in the private sector.
However, the study found that a higher percentage of college graduates who had been in management jobs for less than a year were still likely to make it into the top three tiers of corporations, including CEO and president.
“It suggests that the more experience you have, the more likely you are to make that leap,” McBurs study said, noting that a lot of the experience may be related to the company or company culture that you grew up with.
“When I was younger, I would have never believed that my career path would be so different from a career path that I was led by my parents,” he told ABC News.
McBurs report was published in this month’s edition of the journal Economics and Society.