The claim that prestigious universities provide higher labor market returns to their graduates than non-prestigious universities is subject to controversial scientific and public debate. A common argument is that the higher returns of graduates from prestigious universities stem from the quality of teaching and support networks provided. However, a simple comparison of returns provided by universities with varying prestige is likely misleading as it does not take into account pre-university student characteristics. For example, students of higher academic ability and higher socio-economic backgrounds are more likely to gain access to prestigious universities. Aside from the issue of selection, it is unclear whether graduating from prestigious universities pays off long-term and whether it is more beneficial for students most likely or least likely to attend university.
The paper used data on individuals born in England, Scotland, and Wales in a single week in 1970 and followed a subsample from graduation for up to 14 years in the labor market. The birth cohort data are advantageous in providing a rich set of graduates’ pre-university characteristics and in allowing me to assess graduates’ occupational mobility across early- and mid-career. The paper addresses two research questions: (1) Are there differences in career progression between graduates from prestigious Russell Group universities and other universities? (2) Is graduating from Russell Group universities more beneficial for first-generation graduates or graduates whose father and/or mother already gained a degree?
The results show that a degree from a Russell Group university does not yield advantages in occupational prestige in the first job. However, graduates from Russell Group universities have a steeper growth in occupational prestige in the early labor market career than graduates from other universities. In later stages of the career, graduates from other universities catch up with their peers from prestigious universities and gain the same level of occupational prestige. I only find an early advantage of graduating from Russell Group universities for first-generation students, i.e., students who are least likely to attend these universities benefit the most from it. This result suggests that Russell Group universities provide them with resources (e.g., social networks) that are beneficial in the early stages of the career and that they, otherwise, would not have.
June 7, 2019