In recent years, our campus has been infected by what I have dubbed the “Wall Street Plague.” Each year, it seems like more and more students fall to the prospect of a career in finance — putting aside dreams of saving the world for the promise of late-night spreadsheets and lucrative pay days. This shift is backed up by the data: According to a 2006 survey of graduating seniors, 26% of Dartmouth’s graduating class was planning to pursue a career in the financial services sector. Nearly two decades later, in 2023, the percentage of graduating students working in finance during their first fall after graduation had risen to 33%, according to the Center for Professional Development.
While academic majors may not directly correlate with career paths, we can see a similar change in chosen fields of study. Since 2001, the percentage of students graduating with degrees in computer science, quantitative social sciences, mathematics and economics — the four most useful majors offered at Dartmouth for the pursuit of a Wall Street career, according to Investopedia — had increased by more than 80%, according to the Office of Institutional Research. When you remove QSS — which didn’t exist in 2001 — the remaining three still increased by more than 70%.
Many have tried to explain why Dartmouth students “love finance and consulting.” Some, like the author of the linked column, have argued that the “accelerated timeline for finance and consulting recruiting inhibits students’ ability to explore other career options.” Others have pointed to campus “fads” — arguing that a “bounty of referrals” and “peer pressure” may be driving students to Wall Street or consulting firms. High pay, prestige and shortcomings of the CPD have also been offered as possible explanations.
I argue that the underlying issue lies in income mobility and inequality.
Education is often viewed as a driver of income mobility, also known as continuity. Perhaps economics Nobel laureate and former Federal Reserve chairman Ben Bernanke said it best in a 2006 congressional hearing: “The most important factor [in solving income inequality] is the rising skill premium, the increased return to education.”
To be sure, education being the main factor for income mobility is debated. Some, like Bernanke, argue that it is the key to income mobility, while others, like Nobel-winning economist Paul Krugman, assert that it is not. However, the general belief that income mobility can be attributed, at least in part, to education provides us with insight as to why some students may choose certain majors and certain educational institutions.
In the United States, trends in income inequality since 2001 have been distressing, with 50.9% of income growth going to the top 5% of households, according to the U.S. Census Bureau. And the situation is only worsening. Year after year, more income is consolidated in the top percentiles, according to the Brookings Institution.
The worsening of income inequality can, however, be minimized by regulation and tax policy. The Brookings Institution, where Bernanke currently works, notes that while tax reforms are an important factor in reducing inequality, adequate regulation is equally as important in making policies “that can make the growth process itself more inclusive and produce better market outcomes.”
Legislation changes such as the repeal of Glass-Steagall Act — an act that prohibited investment banks and traditional banks from operating together — have ignored Brookings’s advice and untethered corporations. These deregulatory actions have indeed “unleashed prosperity” — as the new presidential administration claims — but such prosperity has been concentrated within the country’s top wealth brackets. Sure, some additional jobs theoretically would have been created as a result of deregulatory efforts from the increased demand for production, but the majority of growth goes to the top. Additionally, the absence of higher tax progressivity has allowed the top percentile earners to continue their accumulation of wealth while the purchasing power of the middle class stagnates. The incessant emphasis on reducing corporate taxes from recent administrations has not “unleashed prosperity.” Instead, it has allowed higher dividend payments to investors and asset transfers from foreign subsidiaries.
So, why spend time unpacking these policies? And how do they relate to Dartmouth’s campus?
These policies, ones that fail to address income inequality in the United States, put a strain on those who are not within the percentiles that receive the majority of growth. When students feel this strain, I believe they turn to pathways they think will give them their best shot at income mobility. CNBC makes a similar argument: “Rising levels of student debt owed by recent graduates have made them more risk-averse and less likely to gamble on careers that might not pay off financially.” In our case, that means more Dartmouth graduates are seeking degrees that are better suited for the highly lucrative jobs on Wall Street. According to Fortune Magazine, the average salary on Wall Street was $471,370 (including bonuses) in 2024 — putting many Wall Streeters within range to earn the top 5% household income of $526,200. This is the percentile group that, as stated previously, absorbs 50.9% of income growth.
So, the next time you see a Patagonia-vested future investment banker, don’t blame them — just recall that they may be a product of macro income inequality in the United States.
Opinion articles represent the views of their author(s), which are not necessarily those of The Dartmouth.
