The Differentiation of Quality in Higher Education and Graduates’ Wages in Russia
Abstract
More than one-third of Russia’s labour force has a university diploma. With rapid massification, higher education quality turns into one of the key determinants of graduates’ earnings, at least at labour market entry. This paper focuses on two measures of educational quality (level of university selectivity and honors degree) and analyzes their association with graduates’ success in the Russian labour market. Using nationwide administrative data, this paper explores early-career labour market outcomes of Russian graduates with bachelor’s and specialist’s degree. The results suggest the existence of a significant wage premium associated with graduating from more selective universities. The observed positive effect consists of three components: individual abilities, social environment (i.e., networking possibilities and peer-effects), and quality of training. Having an honors diploma is also significantly positively related to early career outcomes, contrary to common belief.
Downloads
References
Androuschak G., Natkhov T. (2010) Ozhidaemye dokhody abiturientov rossijskikh vuzov [Income Expectations of School Students Entering Russian Universities]. Voprosy obrazovaniya / Educational Studies Moscow, no 2, pp. 207–223.
Androushchak G. Prudnikova A. (2011) Dinamika otdachi ot professional'nogo obrazovaniya i differentsiatsiya dokhodov vypusknikov rossijskikh vuzov [Dynamics of Return to Professional Education and Differentiation of Russian Universities Graduates’ Earnings]. HSE Working paper no WP10/2011/02. Available at: https://www.hse.ru/data/2011/04/20/1210892760/WP10_2011_02.pdf (accessed 15 January 2023).
Anelli M. (2020) The Returns to Elite University Education: A Quasi-Experimental Analysis. Journal of the European Economic Association, vol. 18, no 6, pp. 2824–2868. https://doi.org/10.1093/jeea/jvz070
Bordon P., Braga B. (2020) Employer Learning, Statistical Discrimination and University Prestige. Economics of Education Review, vol. 77, Article no 101995. https://doi.org/10.1016/j.econedurev.2020.101995
Borgen N.T. (2015) Changes in the Economic Returns to Attending Prestigious Institutions in Norway. European Societies, vol. 17, no 2, pp. 219–241. https://doi.org/10.1080/14616696.2015.1009843
Brewer D.J., Eide E.R., Ehrenberg R.G. (1999) Does It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings. The Journal of Human Resources, vol. 34, no 1, pp. 104–123. https://doi.org/10.2307/146304
Britton J., van der Erve L., Belfield C., Vignoles A. et al. (2021) How Much Does Degree Choice Matter? Institute for Fiscal Studies Working Paper no W21/24. https://doi.org/10.1920/wp.ifs.2021.2421
Carrol D., Heaton C., Tani M. (2019) Does It Pay to Graduate from an 'Elite' University in Australia? Economic Record, vol. 95, no 310, pp. 343–357. https://doi.org/10.1111/1475-4932.12492
Chevalier A., Conlon G. (2003) Does It Pay to Attend a Prestigious University? Centre for the Economics of Education Discussion Paper no 33. London: London School of Economics and Political Science.
Chia G., Miller P. W. (2008) Tertiary Performance, Field of Study and Graduate Starting Salaries. Australian Economic Review, vol. 41, no 1, pp. 15–31. https://doi.org/10.1111/j.1467-8462.2008.00471.x
Dale S.B., Krueger A.B. (2014) Estimating the Effects of College Characteristics over the Career Using Administrative Earnings Data. Journal of Human Resources, vol. 49, no 2, pp. 323–358. https://doi.org/10.3368/jhr.49.2.323
Dale S.B. Krueger A.B. (2002) Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables. The Quarterly Journal of Economics, vol. 117, no 4, pp. 1491–1527. https://doi.org/10.1162/003355302320935089
Denisova I., Kartseva M. (2007) Otdacha na urovni, tipy i kachestvo obrazovaniya [Return on Education Level, Type, and Quality]. Zarabotnaya plata v Rossii: jevolyutsiya i differentsiatsiya [Labor Wages in Russia: Evolution and Differentiation] (eds V. Gimpelson, R. Kapelyushnikov), Moscow: HSE, pp. 343–402.
Eide E.R., Hilmer M.J., Showalter M.H. (2016) Is It Where You Go or What You Study? The Relative Influence of College Selectivity and College Major on Earnings. Contemporary Economic Policy, vol. 34, no 1, pp. 37–46. https://doi.org/10.1111/coep.12115
Feng A., Graetz G. (2017) A Question of Degree: The Effects of Degree Class on Labor Market Outcomes. Economics of Education Review, vol. 61, July, pp. 140–161. https://doi.org/10.1016/j.econedurev.2017.07.003
Finnie R., Pavlic D., Afshar K., Bozkurt E., Miyairi M. (2016) Do Better Grades in Post-Secondary Education Lead to Better Labour Market Outcomes? Ottawa: Education Policy Research Initiative. Available at: https://ruor.uottawa.ca/bitstream/10393/42163/1/ohcrif_grades_final_report_revised.pdf (accessed 15 January 2023).
Freier R., Schumann M., Siedler T. (2015) The Earnings Returns to Graduating with Honors—Evidence from Law Graduates. Labour Economics, vol. 34, June, pp. 39–50. https://doi.org/10.1016/j.labeco.2015.03.001
Gemus J. (2010) College Achievement and Earnings. Uppsala University Working Paper Series 2010 no 1. Available at: https://www.econstor.eu/bitstream/10419/82561/1/616840225.pdf (accessed 15 January 2023).
Gokhberg L.M., Ozerova O.K., Sautina E.V., Sutyrina T.A., Shugal N.B. (2021) Obrazovanie v tsifrakh: 2021 [Education in Figures: 2021]. Moscow: HSE. https://doi.org/10.17323/978-5-7598-2384-1
Hartog J., Sun Y., Ding X. (2010) University Rank and Bachelor's Labour Market Positions in China. Economics of Education Review, vol. 29, no 6, pp. 971–979. https://doi.org/10.1016/j.econedurev.2010.06.003
Hershbein B. (2013) Worker Signals among New College Graduates: The Role of Selectivity and GPA. Upjohn Institute Working Paper no 13-190. https://doi.org/10.17848/wp13-190
Hoekstra M. (2009) The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach. The Review of Economics and Statistics, vol. 91, no 4, pp. 717–724. https://doi.org/10.1162/rest.91.4.717
Holmlund L. (2009) The Effect of College Quality on Earnings: Evidence from Sweden. Umeå Economic Studies no 781. Umeå: Umeå University. Available at: https://ideas.repec.org/p/hhs/umnees/0781.html (accessed 15 January 2023).
Hussain I., McNally S., Telhaj S. (2009) University Quality and Graduate Wages in the UK. IZA Discussion Paper no 4043. Available at: https://www.iza.org/publications/dp/4043/university-quality-and-graduate-wages-in-the-uk (accessed 15 January 2023).
Jung J., Lee S. J. (2016) Influence of University Prestige on Graduate Wage and Job Satisfaction: The Case of South Korea. Journal of Higher Education Policy and Management, vol. 38, no 3, pp. 297–315. https://doi.org/10.1080/1360080X.2016.1174408
Kapeliushnikov R. (2021) Otdacha ot obrazovaniya v Rossii: nizhe nekuda? [Returns to Education in Russia: Nowhere Below?]. Voprosy Ekonomiki, no 8, pp. 37–68. https://doi.org/10.32609/0042-8736-2021-8-37-68
Khoo P., Ost B. (2018) The Effect of Graduating with Honors on Earnings. Labour Economics, vol. 55, September, pp. 149–162. https://doi.org/10.1016/j.labeco.2018.05.012
Lang K., Siniver E. (2011) Why Is an Elite Undergraduate Education Valuable? Evidence from Israel. Labour Economics, vol. 18, no 6, pp. 767–777. https://doi.org/10.1016/j.labeco.2011.06.008
Lindahl L., Regner H. (2005) College Choice and Subsequent Earnings: Results Using Swedish Sibling Data. Scandinavian Journal of Economics, vol. 107, no 3, pp. 437–457. https://doi.org/10.1111/j.1467-9442.2005.00417.x
Long M.C. (2010) Changes in the Returns to Education and College Quality. Economics of Education Review, vol. 29, no 3, pp. 338–347. https://doi.org/10.1016/j.econedurev.2009.10.005
MacLeod W.B., Riehl E., Saavedra J.E., Urquiola M. (2017) The Big Sort: College Reputation and Labor Market Outcomes. American Economic Journal: Applied Economics, vol. 9, no 3, pp. 223–261. https://www.doi.org/10.1257/app.20160126
Mihut G. (2022) Does University Prestige Lead to Discrimination in the Labor Market? Evidence from a Labor Market Field Experiment in Three Countries. Studies in Higher Education, vol. 47, no 6, pp. 1227–1242. https://doi.org/10.1080/03075079.2020.1870949
Milla J. (2018) The Canadian University Selectivity Premium. Review of Economic Analysis, vol. 10, no 4, pp. 313–349. https://doi.org/10.15353/rea.v10i4.1473
Monks J. (2000) The Returns to Individual and College Characteristics: Evidence from the National Longitudinal Survey of Youth. Economics of Education Review, vol. 19, no 3, pp. 279–289. https://doi.org/10.1016/S0272-7757(99)00023-0
Mountjoy J., Hickman B. (2020) The Returns to College(s): Estimating Value-Added and Match Effects in Higher Education. National Bureau of Economic Research Working Paper no 29276. https://doi.org/10.3386/w29276
Naylor R., Smith J., McKnight A. (2007) Sheer Class? Returns to Educational Performance: Evidence from UK Graduates First Destination Labour Market Outcomes. Warwick Economics Research Paper no 786. Available at: https://ideas.repec.org/p/wrk/warwec/786.html (accessed 15 January 2023).
Naylor R., Smith J., Telhaj S. (2016) Graduate Returns, Degree Class Premia and Higher Education Expansion in the UK. Oxford Economic Papers, vol. 68, no 2, pp. 525–545. https://doi.org/10.1093/oep/gpv070
Piopiunik M., Schwerdt G., Simon L., Woessmann L. (2020) Skills, Signals, and Employability: An Experimental Investigation. European Economic Review, vol. 123, Article no 103374. https://doi.org/10.1016/j.euroecorev.2020.103374
Quadlin N., Cohen E.D., VanHeuvelen T. (2021) Same Major, Same Economic Returns? College Selectivity and Earnings Inequality in Young Adulthood. Research in Social Stratification and Mobility, vol. 75, Article no 100647. https://doi.org/10.1016/j.rssm.2021.100647
Roshchin S., RudakovV (2016) Vliyanie ʺkachestvaʺ vuza na zarabotnuyu platu vypusknikov [The Effect of University Quality on Graduates’ Wages]. Voprosy Ekonomiki, no 8, pp. 74–95. https://doi.org/10.32609/0042-8736-2016-8-74-95
Rozhkova K., Roshchin S., Solntsev S., Travkin P. (2021) Otdacha na magisterskuyu stepen' na rossijskom rynke truda [The Return to Master’s Degree in the Russian Labor Market]. Voprosy Ekonomiki, no 8, pp. 69–92. https://doi.org/10.32609/0042-8736-2021-8-69-92
Rudakov V., Roshchin S. (2019) The Impact of Student Academic Achievement on Graduate Salaries: The Case of a Leading Russian University. Journal of Education and Work, vol. 32, no 2, pp. 156–180. https://doi.org/10.1080/13639080.2019.1617839
Schwerter J. (2020) Impact of Universities in a Flat Hierarchy: Do Degrees from Top Universities Lead to a Higher Wage? Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics, ZBW. Kiel, Hamburg: Leibniz Information Centre for Economics. Available at: http://hdl.handle.net/10419/224583 (accessed 15 January 2023).
Scott P. (1995) The Meanings of Mass Higher Education. Milton Keynes, United Kingdom: Open University Press.
Solmon L.C. (1975) The Definition of College Quality and Its Impact on Earnings. Explorations in Economic Research, vol. 2, no 4, pp. 537–587.
Thomas S. (2003) Long-Term Economic Effects of College Selectivity and Control. Research in Higher Education, vol. 44, no 3, pp. 263–299. https://doi.org/10.1023/A:1023058330965
Thomas S.L. (2000) Deferred Costs and Economic Returns to College Major, Quality, and Performance. Research in Higher Education, vol. 41, no 3, pp. 281–313. https://doi.org/10.1023/A:1007003510102
Triventi M. (2013) Stratification in Higher Education and Its Relationship with Social Inequality: A Comparative Study of 11 European Countries. European Sociological Review, vol. 29, no 3, pp. 489–502. https://doi.org/10.1093/esr/jcr092
Walker I., Zhu Y. (2018) University Selectivity and the Relative Returns to Higher Education: Evidence from the UK. Labour Economics, vol. 53, August, pp. 230–249. https://doi.org/10.1016/j.labeco.2018.05.005
Wise D.A. (1975) Academic Achievement and Job Performance. The American Economic Review, vol. 65, no 3, pp. 350–366.
Copyright (c) Authors retain copyright and accept the terms of publication in the journal (https://vo.hse.ru/copyright)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
.jpg){kind=small}
