Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180495 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11477
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
wage premium
returns to education
human capital
graduate labour market
JEL: 
A23
J24
Document Type: 
Working Paper

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