IMO, it is another form of compensation. People look to get 3 things in a job: Compensation, Interest and Reputation. The professor is a researcher who teache

IMO, it is another form of compensation. People look to get 3 things in a job: Compensation, Interest and Reputation. The professor is a researcher who teaches. However, they do not want to merely be a teacher. Especially when it comes with a substantial pay cut in comparison to the industry. So, you offer them repute and interest by giving tenure and something to research. The university gets a better teacher for cheap and the professor gets an inflated sense of ego and self-actualization. From the student's point of view, it opens up alternate avenues for promotion. If only the top 5 labs get funded enough to do good work, then entering those top 5 labs early is absolutely essential. Anyone who doesn't get on the bandwagon early, will be left to the wolves like medical residencies. It will greatly exacerbate the competition in standardized exams and sideline students who don't abide by a rigid template early in life. (eg: a lot of friends went to tier 2 universities for their masters, did excellent work and got into the top 5 labs purely because the top 50 lab was funded enough for them to make up for lost time early in life) I have also seen lab impact scores jump around substantially enough, that while the 90% hypothesis may be true, we have no way to picking out who will create the 10% that's gold. While half of the 10% might get reliably produced by the top 5 labs. The other half can be notoriously hard to pin down. You will see this in top industry groups (MSR, Brain) that hire exclusively out of the top 5 labs. Even there, the 90% number holds, despite there being a hiring system specifically built for capitalistic impact. On the flip side, any academic field whose employability exists only within academia is a dictionary-definition pyramid scheme. It is a common accusation that's correctly levied on the liberal arts, but STEM should not be immune to it.