Abstract
This paper focuses on the structure and extent of wage differences among graduates of different higher-education institutions in Germany. We ask how large these differences are and how they relate to fields of study and regional labour markets. The results from our application of cross-classified random-effects models to a cohort of the DZHW Graduate Panel show that there is a considerable amount of wage variation depending on the graduates’ alma mater. However, this variation can be fully explained by structural characteristics: Selection based on individual characteristics is of only minor importance, while regional labour markets do matter. Most of all, however, the differences relate to fields of study.
Highlights
In contemporary societies, the relevance of education for individual life chances is well-known, especially its importance for working careers
We described wage variations among graduates of different alma maters and examined to what extent this wage heterogeneity can be associated with differences in
It has been argued that, other than possible mechanisms based on institutional characteristics, the field-of-study composition can be associated with wage variation between higher-education institutions
Summary
The relevance of education for individual life chances is well-known, especially its importance for working careers. Education determines the chances of getting a job, avoiding unemployment and attaining higher occupational positions and wage levels. In these regards, higher-education graduates tend to excel as compared to other educational levels. Empirical studies have revealed remarkable differences in labour-market outcomes within the group of highly qualified candidates. Part of these heterogeneities can be associated with graduates’ performance during their course of study (Kittelsen Røberg and Helland 2017) as well as ascriptive characteristics such as gender (Leuze and Strauß 2009). There are structural aspects of the higher-education system that add to differences in labour-market outcomes. Aside from the vertical differentiation in a twotier degree structure (Noelke et al 2012), two important horizontal dimensions of the higher-education system can be distinguished (Charles and Bradley 2002; Triventi 2013): the institution of higher education attended and the field of study
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