Do Group of Eight graduates earn more?, part 2

In March, I reported academic research showing that employers appeared unwilling to pay premium salaries for graduates who had been to Group of Eight universities.

Another report
released this week, 2008 Graduate Pathways Survey: Graduates’ education and employment outcomes five years after completion of a bachelor degree at an Australian university, gives some grounds for thinking that as graduates acquire work experience those from Group of Eight universities receive larger salary increases. The report is the first from the Graduate Pathways Survey, which in this case retrospectively asked people who completed their courses in 2002 about their progress since then.

It found that:

Go8 graduates tended to see the largest steady increase in salary over five years from $35,000 (2003 dollars) to $63,000 – an 80 per cent increase. ATN graduates salaries increased from $42,000 (2003 dollars) to $64,000 (60%). IRU [Innovative Research Universities, eg Murdoch, La Trobe, James Cook], regional and metropolitan university graduates’ salaries increased at slightly lower rates to reach $56,000 (up 56%), $61,000 (up 51%) and $60,000 (up 54%) respectively.

Australian Technology Network (ATN) universities are, however, still slightly ahead in absolute terms.

Unfortunately, there is no statistical analysis in this report to see whether there is a distinct Group of Eight effect, or whether (as is possible) this is a function of other labour market characteristics of the graduates. Presumably the age and discipline mix of graduates will affect the scope for rapid salary increases. And of course even a finding that controlling for these things there is a Group of Eight effect, it does not show that attending a Group of Eight university was a causal factor, given the higher prior average academic ability of these students.

8 thoughts on “Do Group of Eight graduates earn more?, part 2

  1. Even if there were confounding labour market differences, it’s hard to imagine that it would change the results much. I’m personally not that surprised by the findings, given that employers seem to happily turn up to even average universities to recruit the best graduates. It will be interesting to see whether this changes in the current climate. Even if it does, however, I don’t necessarily see this as favoring the Go8. At least from my experience (which might not be representative):
    1) Once employers get graduates that they like from a certain place(s), they tend to like to hire graduates from the same place.
    2) There is a strong tendency for the Go8 universities to make their undergraduate degrees more generic (the Melbourne Model being a prime example). This means graduates from the smaller universities that sometimes offer degrees particularly targeted at industry areas will have a vast advantage over generic graduates in those areas. Why get a generic graduate when you can get one that already knows a fair bit of the stuff?
    3) Even for generic degrees, my feeling is that some of the smaller universities offer a better education since it is exceptionally difficult to run practical labs with really large courses. Thus, you may have a course with a similar name (e.g., “chemistry”) but the course will be more practically oriented at the university that takes 50 students versus the one that takes 300.


  2. “Why get a generic graduate when you can get one that already knows a fair bit of the stuff?”

    Because the generic graduate is smarter and the specialised graduate has knowledge that will be out of date in a few years. For decades the British civil Service recruited no one but Oxford and Cambridge graduates with degrees in Classics, and then put them to work in the foreign office, the National Health Service, the ministry of defence, and so on.
    It worked out quite well.


  3. “Because the generic graduate is smarter and the specialised graduate has knowledge that will be out of date in a few years.”
    I’m not against generalist degrees (especially when followed by postgraduate stuff) — I think, for example, the students Melbourne will churn out from their postgraduates courses will no doubt be in general excellent. There are also lots of jobs that don’t require any specific skills that people teach in universities, and no doubt generalist degrees are just what is in order (and for that matter, just to plug some of the holes that the high school system has created).
    Alternatively, as for undergraduates — I teach in a course which is the only one in Victoria that teaches a particular set of skills in the allied health sector. When I go and visit those students on industry-based learning, I’m always surprised by what percentage of the staff did that course, and the old students I bump into all seem gainfully employed. Thus, at least for that course, it’s pretty clear what the employers want — they don’t want to spend the first year or two teaching new staff something that students from somewhere else already know. That’s just the way it is, for better or worse.
    Given this, I therefore think that a mix of targeted degrees for a particular industry as well as generalist ones is probably the way to go. Thus, universities that only (or mainly) focus on generalist undergraduate degrees simply won’t produce students that are competitive in some markets — and given that there is already a huge supply of people with a generalist degree (they’re the cheapest degrees to run), their outcome statistics will be worse. That’s one of the reasons I think the Go8 don’t have an advantage in terms of salaries — because the proportion of students that come out of the ATN universities with targeted degrees is greater, and hence it is simpler for many to get targeted jobs versus compete for the “general” skills jobs. I also think that if you compared a Go8 graduate with a generalist degree with an ATN graduate with essentially the same degree, you would be probably find the Go8 graduate got a slightly higher salary, but this difference would be small, since the actual difference between students isn’t huge. Thus the ATN universities have a positive in terms of degrees they offer, and the Go8 have a prestige advantage (and slightly better students). Hence when you look at mean salaries, these cancel each other out. (that would be easy to check if you had the data incidentally).


  4. I’m pretty much with Conrad on this one. The US literature I have read struggles to find any consistent pattern of general degrees producing greater levels of generic skills than vocationally-oriented courses. So for labour market outcomes, the vocational degrees are the best – especially as while the professional knowledge required in university-trained occupations evolves, there are few cases of these occupations disappearing, so it is a matter of keeping up with changes rather than acquiring totally new knowledge and skills. Knowledge that partially dates but evolves is far more valuable than knowledge that was never relevant to the occupation.

    But as Conrad says there are many professional jobs for which no particular degree is required, and anyone with reasonably high generic intellectual skills can do them, whether their degree was for another occupation or a general degree.


  5. Andrew, your degree I believe is in political science and your work is in higher education policy. I suggest that reading Edmund Burke probably did more to equip you for what you do than if you’d read a lot of educational theorists.


  6. S of the R – I think that my particular intellectual history gives me a differnt angle on higher education to most people in the field – on why expecting the government to give universities the money they want is naive, and makes me think about issues that are otherwise substantially overlooked, such as the efficiency of the allocative mechanisms in the sector. Burke however I am not so sure about – policy revolution is required:)


  7. You don’t think that perhaps a small number of country graduates remain in the country where salaries are generally lower.


  8. Charles – While the report did find slightly lower salaries for people from regional backgrounds, I don’t think they looked at whether this was due to their current location.


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