Does it Pay to Graduate from an 'Elite' University in Australia?

25 Pages Posted: 2 May 2018

See all articles by David Carroll

David Carroll

University of New South Wales (UNSW)

Chris Heaton

Macquarie University, Macquarie Business School

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

Abstract

In Australia, the so-called Group of Eight (Go8) universities have lower student-to-staff ratios, better qualified staff, superior research outcomes, and generally better placement in university rankings compared to non-Go8 universities. They are also typically the most competitive universities for prospective undergraduates to enter. Prior published research, mainly focusing on the United States, has found that graduates of prestigious and selective colleges enjoy a wage premium over graduates of other institutions when they enter the labour market.In this paper, we use data from the Graduate Destination Survey and data on Australian Tertiary Admission Ranks (ATARs) to investigate the existence of a Go8 premium in the Australian labour market and to determine the extent to which it is due merely to the recruitment of better students. We find statistically significant evidence of unconditional Go8 premia ranging from 4.3% to 5.5% and find that between 13% and 46% of these premia are due to student selection.We also find evidence of considerable heterogeneity within the Go8 and other university groupings, and that field of study and geographical region have relatively large impacts on graduate starting salaries. We conclude that, while Go8 premia exist, a graduate's alma mater is a relatively minor consideration in the determination of graduate salaries in Australia.

Keywords: human capital, returns to education, wage premium, graduate labour market

JEL Classification: A23, J24

Suggested Citation

Carroll, David and Heaton, Chris and Tani, Massimiliano, Does it Pay to Graduate from an 'Elite' University in Australia?. IZA Discussion Paper No. 11477, Available at SSRN: https://ssrn.com/abstract=3170266

David Carroll

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Chris Heaton

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Massimiliano Tani (Contact Author)

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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