It's mostly that the lower bound to get a PhD (at least in a non-imaginary field) is higher than to merely get an SB. If you assume a non-pessimal distribution

It's mostly that the lower bound to get a PhD (at least in a non-imaginary field) is higher than to merely get an SB. If you assume a non-pessimal distribution[1], the average pHD will be smarter than the average SB. [1] This isn't necessarily true of the smartest individuals, and you could imagine a distribution where the 120-130 IQ people stick around to get PhDs, but the SB people are 115-160 IQ, and they leave to go into other fields. Probably true of English, Political Science, etc. -- the smartest people of those undergrad programs probably go into law or finance rather than remaining as grad students and professors within the field itself.