New MIT Sloan research finds that organizations (still) prefer legacy applicants because they benefit the bottom line

New research from MIT Sloan documents that legacy preferences are materially beneficial, but likely counterproductive for other organizational objectives, findings that have implications for college admissions, hiring, and promotion practices at companies.

CAMBRIDGE, Mass., March 1, 2023 /PRNewswire/ --  A new study published in the American Sociological Review offers implications for corporate hiring based on research on the "legacy preference" in college admissions.

MIT Sloan School of Management professor and co-director of the MIT Institute for Work and Employment Research, Emilio J. Castilla, and assistant professor Ethan Poskanzer of the University of Colorado, researched the reasons that colleges still prefer legacy applicants based on a theoretical framework they developed consisting of the three types of logics found in decision-making strategies: meritocratic, diversity, and material logic.

Meritocratic logic assumes that admissions and hiring decisions more generally are based on the most qualified applicants; diversity logic suggests applicants be selected if they help increase the diversity of the student pool; and material logic provides for a decision based on an expectation of financial benefit. While colleges and universities have faced criticism for giving preference to applicants based on family ties, legacy applicants continue to be admitted at higher rates than non-legacies. Until now, researchers had not yet investigated the "why" of these trends.

"In this study, we were able to develop and empirically test a theoretical framework of these three distinct sense-making strategies at play when key decision makers screen applicants into organizations. And we applied this framework to study how legacy preferences either support or undermine each organizational logic using the population of applicants seeking admission into an elite college in the United States," said lead author Castilla. "There are reasons to suspect that those same preferences and logics have implications for organizational hiring as well."

Legacy preferences in admissions resemble nepotism and other family-related favoritism in organizational hiring processes more broadly. "When we talk about the best candidates for a job, we're implying that they are the best qualified, using meritocratic logic," said Castilla. "That said, those who are recruiting and hiring employees may still be influenced by material logic, which may have a negative impact on the diversity and qualifications of the employee pool."

The team quantitatively assessed the impact of each logic, to test how each affects the college admissions process, as well as its implications for selection and hiring. While college admissions are expected to be meritocratic, the data from The College study showed a different result: it supported the material logic preference, meaning that legacies provided better financial and economic support to colleges.

"Contrary to the meritocratic logic, we find that legacies are neither more qualified applicants nor better students academically," said Castilla. "We did find strong support for the material logic at the cost of the other two organizational logics: legacies make better alumni after graduation and have wealthier parents who are materially-positioned to be more generous donors than non-legacy parents," he added.

The data also supported that legacy preferences are counterproductive to diversity logic in the particular college studied. "Being a legacy increases the chances of admission for white and wealthy applicants more than racial minorities or applicants from lower socioeconomic status backgrounds," said Castilla. Legacy applicants are estimated to be 25% more likely to be white, 62% less likely to be Asian, and 23% less likely to be Hispanic, compared to non-legacies. Additionally, legacies are 8% more likely to be women, suggesting that gender diversity is less of an issue than racial diversity.

"Organizations and businesses need to be aware that these three logics can work well together and create organizations of very talented individuals who are very diverse, and who bring material benefits as well," said Castilla.

And yet, "contradictions that could be problematic for organizations can happen, especially when there is a labor shortage," he said. Organizations could choose to pay less attention to diversity or qualifications, and simply rely on material interests. Castilla suggests that there is value in further studying how family ties and nepotism in favor of material incentives may come at the cost of the other logics in other organizational and business settings.

"At the end of the day, the optimal way to recruit and hire individuals should take all three logics into account," said Castilla. "We hope our study reminds university leaders and public officials of the trade-offs between admissions decisions to prioritize material support, needs, and other key organizational — and even societal — goals, such as selecting the most talented and diverse candidates for educational opportunities."

About the MIT Sloan School of Management

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SOURCE MIT Sloan School of Management