Academic journal article Contemporary Economic Policy

Social Animal House: The Economic and Academic Consequences of Fraternity Membership

Academic journal article Contemporary Economic Policy

Social Animal House: The Economic and Academic Consequences of Fraternity Membership

Article excerpt

I. INTRODUCTION

For a certain generation of Americans, the image of fraternities is indelibly linked to National Lampoon's Animal House (1978), a fictionalized account of a group of hedonistic fraternity brothers at a U.S. college. (1) Interestingly, the movie ends by revealing that the students in question have gone on to become, inter alia, a doctor, a lawyer, and a U.S. senator. While these "where are they now" snippets are clearly intended as satire, they raise important questions about the long-run economic consequences of fraternity membership. Do the members of actual fraternities prosper relative to nonmembers, and if so, do they prosper because of, or in spite of, their participation in Greek life?

The existing literature provides incomplete and at times contradictory evidence on this question. To begin with, while several papers investigate the economic consequences of fraternity membership, they focus on its impact on a graduate's initial employment opportunities. For example, Routon and Walker (2014) report that fraternity membership increases the probability of a recent graduate obtaining a job, and Marmaros and Sacerdote (2002) find that fraternity membership is positively associated with networking and with finding a high-paying job directly out of college. (2) It is unclear, however, to what degree these initial placements are correlated with the long-run equilibrium outcomes. It may be that the economic benefits of fraternity membership diminish over time, as the labor market sorts out underqualified fraternity members and correctly identifies and rewards talented nonmembers.

Second, any advantage fraternity membership conveys with respect to developing social capital and connections may be partly or fully offset by its deleterious effect on human capital formation. Both Grubb (2006) and Routon and Walker (2014) find that fraternity membership is associated with significantly lower college grades. In addition, a substantial literature links fraternity membership to increased drinking and increased binge drinking (Alva 1998; Cashin, Presley and Meilman 1998; Chaloupka and Wechsler 1996; DeSimone 2007, 2009), which provides a plausible channel through which membership may affect academic performance. As a result, any attempt to estimate the long-run consequences of fraternity membership should account for its influence on both human and social capital.

In this paper, we present evidence on the impact of fraternity membership on the academic and economic performance of the alumni of one Northeastern college. Our results are based on an alumni survey administered in the fall of 2009, with detailed questions on income, employment, collegiate social activities, academic performance, and personal characteristics. After restricting the data to men who are currently employed full time, the data include more than 1,600 observations for alumni with graduation dates that span over 40 years.

The structure of our survey allows us to address two key issues that have not been considered in the literature. First, we are able to investigate the impact of fraternity membership on an individual's future income. (3) The use of income has a number of advantages. First, income is a more finely grained measure of the economic return to fraternity membership than employment status, and second, the longer time horizon may provide a better estimate of the equilibrium impact of fraternity membership. Finally, as income levels likely reflect the impact of both human and social capital, their use provides a more comprehensive measure of the economic impact of fraternity membership.

A second advantage of the long time period covered by our dataset is that it allows us to employ a unique strategy for identifying the causal effects of fraternity membership. Identifying the effect of fraternity membership is a challenge due to selection bias. As DeSimone (2007, 338) notes, there is concern that "students choose to join fraternities in part because of preexisting preferences toward behaviors that membership facilitates. …

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