Polachek 1974). Earnings differentials stem from productivity differences associated with human capi- tal. It is assumed that initially women invest less in human capital than men because of the anticipated division of labor in the family and that after forming a family union they acquire less human capital be- cause of the actual division of labor between the spouses. Becker (1985) argues further that (married) women economize on the effort they expend on market work by seeking less demanding jobs. Fol- lowing these propositions, the gender wage gap can be explained by human capital differences between men and women and should disappear if human capital is adequately measured. Consequently, it can be argued that the gender wage gap found using standard population surveys could be a result of poor measures for human capital due to data limita- tions Ð usually only the level or years of education and the amount of work experience are available. Because universitygraduates can have other skills that are highly valued by German employers Ð such as internship experience, foreign language skills, or computer skills Ð it is likely that these additional skills are important human capital endowments that are relevant for the labor market. Gender differen- ces concerning investment in these endowments might therefore result in income differences. Hence, differences in human capital which usually remain unobserved may possibly result in an overestimation of the gender wage gap. Consequently an existing gender wage gap for universitygraduates should dis- appear Ð or at least be reduced substantially Ð after controlling for human capital with detailed meas- ures.
An important factor is the comparison of the weight of education in the differential of men’s and women’s wages. According to Večerník [1998: 118] “education increases the differential in men’s incomes, but decreases in the case of women. While for men individual explanatory factors function independently and can therefore reinforce each other, these factors have a more pronounced effect on women’s earnings, but basically only in combination. This means that for women a handicap in one respect (e.g. age) can- not compensate for strengths in another area (e.g. education).” This of course means that there is a considerable discrepancy between male and female universitygraduates, since for the latter the income effect is lower in other educational categories. If this trend con- tinues it would lead to a paradoxical conclusion: if women climb (in educational terms)
Our results show that FiF graduate women face an 8.3% wage penalty in the labor market compared to their female peers who match their parents with a university degree. We find no evidence of this penalty for male FiF universitygraduates. We also find no evidence of any FiF disadvantage for men or women in terms of the probability of employment. These results are robust to controlling for early educational attainment (as a proxy for cognitive abilities) and controlling for a series of university and employment characteristics such as university quality, course choice, industry, occupation, fertility and non-cognitive traits. We conduct an Oaxaca-Blinder decomposition of the FiF versus non-FiF graduate wage gap to see how much of the gap comes from the different distributions of these characteristics (endowments) between the two groups, and how much of it remains unexplained. We find that the theoretical FiF wage gap that emerges due to the different endowments of FiF and non-FiF graduates is the same for men and women. However, FiF men compensate about two-thirds of this gap by showing different (unexplained) returns to these characteristics. For women, on the other hand, different endowments explain the FiF penalty almost completely. Its main drivers are early educational attainment, whether they attended an elite (Russell Group) university and whether their highest qualification was needed to get their current job.
Johannes Wieschke *
Gender differences in the frequency of employer changes and their financial return were examined in a sample of Bavarian universitygraduates. The search and matching theories were used to develop hypotheses which were then tested against each other. The results show that in the first few years after graduation women change employer more frequently than men. In large part this can be explained by gender differences in labor market structures, in particular the fact that a woman’s first job is less likely to be in a large company, in an executive position or on a permanent con- tract and women tend to be less satisfied with their first job. After controlling for variance in these factors the coeffi- cient changes sign, indicating that under similar circumstances men change employer more often. Furthermore, both men and women benefit financially from changing employer. The absolute return is higher for men, but as men tend to have a higher starting salary there is no gender difference in the relative return and hence no effect on the gender gap. The results are also discussed in the light of the specifics of the structure of the German labor market.
This study investigates the determinants of overeducation in four cohorts of universitygraduates of Swiss universities and looks at the correlations between overeducation and wages. Job-education mismatch can be investigated both 1 year and 5 years after university graduation. As with any non-experimental study, the correlation between overedu- cation and labour market disadvantages is not necessarily causal. However, we have a very rich set of data on students’ background and on their study behaviour, which should help to minimise the impact of potential bias on the results. Additionally, regarding wage estimates 5 years after gradu- ation, we have observational data for both switchers from mismatched to matched jobs and switchers in the opposite direction, and we are able to take into account the wages in the first job (1 year after graduation). This should enable us to control for most of the unobservable differences between graduates and allow us to do a better job of judging the cau- sality of the wage effect.
different countries are assigned to increase labour market chances of women, largely
addressing career opportunities and the gender wage gap. Our findings reveal that female
universitygraduates tend to perceive job rewards with regard to extrinsic dimension as
slightly lower than male universitygraduates, which to some extent explains female
German Emigration: Not a Permanent Loss of UniversityGraduates
10 DIW Berlin Weekly Report No. 2/200
and practical barriers to emigration, it also consti- tical barriers to emigration, it also consti- tutes an individual resource that can be utilised with profit in later periods abroad. The diagram shows the importance of experience and contacts abroad for the various stages of intention to emigrate. Although the importance of occupational reasons for emigrating cannot be examined from the availa- ble data for all those willing to emigrate 0 there are indications that economic motives do play an important role in inducing emigration, mostly with regard to temporary migration. More than two thirds of those who had already lived abroad went abroad to study or for training, or as part of their job. At the same time more than half of the respondents with experience abroad said that their stay was always intended to be only temporary. So the results con- firm that cultural competences or social contacts are acquired during temporary periods abroad which in turn increase the inclination to go abroad again later.
unemployed for some time prior to the new job. This could not be found with the sample used in this study. An interaction between the variable ‘type of employer change’ and different specifications of unemployment between the two jobs yielded no significant coefficients. Another factor besides labour market regulations is a country’s current economic situation. Previous research found negative effects of involuntary employer changes during recessions, but positive effects during economic growth (Blau & Kahn, 1981a: 292). The sample analysed here consists of Bavarian universitygraduates for whom the labour market in Germany is characterised by favourable working conditions like low levels of unemployment (Albrech, Fink, & Tiemann, 2016: 12 f.), Germany as a whole is experiencing economic growth since 2010 (Statistisches Bundesamt, 2018b). As a sought-after group (with unemployment benefits to fall back to), graduates have bargaining power which probably contributes to the fact that they, on average, do not experience any wage losses after an employer change. However, effects of the economic situation and of labour market regulations are difficult to disentangle with this sample. Additional data with a wider geographical or time horizon would therefore be needed to further investigate these effects. Differences can be found with regard to the returns to personal employer changes which are lower, although still positive. These differences can be explained by different circumstances and by the changes in independent variables like permanent contracts and executive positions, i.e. variables with strong positive effects on incomes. Such characteristics are relatively rare before involuntary employer changes, but the prevalence increases drastically afterward, going along with large wage increases. In contrast, they are already quite common before personal or professional changes, but do not change much anymore after the former and increase even further in case of the latter. Thus, the returns to different types of employer changes do not differ anymore after controlling for job characteristics.
Provided in Cooperation with:
German Institute for Economic Research (DIW Berlin)
Suggested Citation: Brenke, Karl; Wittenberg, Erich (2012) : "Universitygraduates alone meet
demand": Six questions to Karl Brenke, DIW Economic Bulletin, ISSN 2192-7219, Deutsches Institut für Wirtschaftsforschung (DIW), Berlin, Vol. 2, Iss. 5, pp. 9
The issue of horizontal job-education mismatch attracts considerable attention among policy- makers and researchers as it reflects the congruency between higher education fields and labor market requirements. It emphasizes the relations between graduate supply and employers demand for human capital, specific fields and occupations, and shows how the labor market value skills produced during university studies. On the one hand, the dynamics of labor markets lead to rapid changes in the nature and structure of graduate jobs. Labor markets are frequently more dynamic than educational systems, which cannot immediately react to the change in technologies or demand for certain professions. This situation is defined as a race between education and technology (Goldin and Katz, 2009). On the other hand, in some countries, labor markets appear to not offer a sufficient amount of jobs requiring university education. The rapid expansion of higher education during the last two decades was not accompanied by substantial growth in high-skilled jobs, especially in Southern European and Post-Soviet countries (Marginson, 2016; Green, Henseke, 2017). Mass higher education can therefore create an oversupply of universitygraduates and result in labor market imbalances. These imbalances create a possible decrease of the graduate wage premium (GWP) as well as increasing job- education mismatches and the problem of overeducation.
gramme (FP6), the main objective of a Spanish research project en- titled “The Flexible Professional in the Knowledge Society: New De- mands on Higher Education in Europe” or REFLEX (ANECA, 2007), is to analyse and diagnose the labour integration of university grad- uates. The project’s goal is to respond to a number of general ques- tions concerning: the competencies required of universitygraduates for their integration into the knowledge society; the role universities play in developing these competencies; the degree to which graduate expectations are fulfilled regarding employment and ways to resolve the imbalance between graduate expectations and the characteristics of their jobs.
Universities around the world are attempting to increase the diversity of their student population. This includes individuals who are ‘first in family’ (FiF), those who achieve a university degree, but whose (step) parents did not. We provide the first large scale, quantitative evidence on FiF graduates in England using a nationally representative survey linked to administrative education data. We find that FiF young people make up 18 percent of a recent cohort, comprising nearly two-thirds of all universitygraduates. Comparing individuals with no parental higher education we show that ethnic minorities and those with higher levels of prior attainment are more likely to experience intergenerational educational mobility and become a FiF. Once at university, those who are FiF are more likely to study Law, Economics and Management and less likely to study other Social Sciences, Arts and Humanities than students whose parents are universitygraduates. We also find evidence that FiF students are less likely to graduate from elite universities and have a higher probability of dropping out, even after prior educational attainment, individual characteristics and socio-economic status are taken into account.
heterogeneity in individual characteristics, job choices and career objectives, different search and negotiation behaviors of different groups, structural reasons such as unequal burdens of bringing up children, or even biased location choices of couples.
The ongoing public debate notwithstanding, our knowledge about labor market chances of highly skilled women and immigrants in Germany, and the potential problem of additive disadvantages faced by female immigrants, is limited. In this paper, we draw on survey data from a large-scale graduate tracer study conducted by the University of Kassel International Centre for Higher Education Research (INCHER-Kassel). Alumni across all disciplines from 37 German universities (with a raw sample size of more than 15,000 individuals) were surveyed about their employment situation roughly nine to 18 months after graduation. Controlling for individual differences in employability, we analyze three different indicators of labor market outcomes for this sample: wage differentials, job satisfaction, as well as the perceived match of competences and job requirements. For our sample of recent German universitygraduates, gender differences in labor market outcomes generally appear to be more substantial than those related to immigration status. Our results indicate a systemic wage gap for women, but not for male immigrants. In contrast to earlier work for the U.S. (Le and Miller, 2010) we find no evidence that female immigrants suffer from a “double-negative effect” of being disadvantaged twofold (in terms of gender and immigration status). Similar patterns are obtained for job satisfaction and the match quality of competences and job requirements.
One possible explanation for this puzzle is that it did not happen at all - that the wage differential really did fall but that coincident changes in composition concealed that decline. We argue that this is not the case. The combination of a large relative supply shift and the lack of movement in the relative wage differential is observed even after taking account of composition changes in terms of gender, public versus private sector, immigrant status, and whether a person had an advanced degree above a BA. Of course, it is possible that the relevant composition shift was in terms of unobserved individual heterogeneity, i.e., that the average ability of universitygraduates declined as the proportion of people with a BA grew. This mechanism is plausible but it is important to note that to explain the puzzle, we would require that unobserved worker ability declined significantly more among high school educated workers than among those with a BA. Using a bounding exercise based on a standard version of a Roy model of education choice, we show that the wage and employment movements do not fit with such an outcome. Even in more general selection frameworks, to explain the puzzle based on unobserved composition shifts one would need the extent of relative ability shifts to vary across time and age groups in a way that exactly offsets a widely varying set of relative supply shifts. While we cannot prove this did not happen, we view it as very unlikely. Thus, we conclude that the puzzle is real: large relative supply shifts were really met with little coincident change in the education wage differential while later, after the main increase in educational attainment was over, there was a small decline in the education wage differential.
Universitygraduates are more inclined to consider moving abroad— but only for a temporary period
If we incorporate the specific results—the con- sideration of temporarily emigration, permanent emigration, or emigration in the near future—into the model, clear differences immediately appear be- tween people of different educational levels. Highly educated people (graduates from a University of Applied Sciences or higher) consider moving abroad temporarily much more frequently than people with lower levels of education (lower or intermediate sec- ondary school graduates and dropouts). The highly educated are underrepresented, however, among those who consider moving abroad permanently. In the overall model, where we do not distinguish according to duration of stay abroad, the two effects cancel each other out.
Hypothesis 1: Graduates with family obligations should have clearer preferences for certain locations, while younger graduates and graduates who moved before should be more open with respect to the location of their job.
There is a debate in the literature whether job opportunities, leisure offers, or social ties are the most important factor for location preferences (see e.g. Dahl and Sorenson 2010, Gottlieb and Joseph 2006, Greenwood and Hunt 1989). Clearly, this depends on the preferences of the individuals. Since we know that economically prospering regions attract graduates over long distances, we expect those persons interested in good job opportunities to be willing to move over longer distances. This holds especially for graduates from Middle Hesse because this region does not provide very good job opportunities, so that it can be expected that graduates move towards the economic centers in Germany after finishing their study in Middle Hesse. Similar arguments hold for curious graduates who just want to go to a new place and those having a sophisticated leisure notion which can be satisfied only in a few large cities.
The results of the estimated Cox models revealed a negative effect of working during the whole study time on study duration in the majority of fields. In almost all fields working only in parts of study time seems not to affect study duration. Furthermore, the data base allows to include measures of students’ ability and of the parental educational background in the model, information that is missing in most data sets. The results confirmed my hypothesis that good A-level grades increase the hazard of graduation. Surprisingly, the parental educational background seems not to affect time to degree significantly. This is probably due to the fact that social background effects on university performance are mainly driven by disadvantages of socially underprivileged students on earlier levels in the course of education (for example, students from low-income families tend to achieve poorer A-level grades which are found to affect time to first university degree negatively). Due to the richness of the data set, detailed insights into covariate effects on duration within different fields of study could be provided. As assumed, some covariates affect time to degree differently across fields of study. A detailed analysis of these differing effects should become a focus of further research.
Model OLS 2SLS 2SLS 2SLS
Instrument None Mand Share Program Mand Share Closest University Mand Share Program
Controls Yes No No Yes
Notes: The table displays OLS and 2SLS coefficients and robust standard errors clustered on department level. Short- and long-run refer to one and five years after studying, respectively. Difference refers to the difference between OtherEmp and SameEmp coefficients. F-Test shows the instrument strength in the first stage. All estimates include dummies for wave, the year, as well as wave-specific dummies for the university, study field and education level. Estimates with controls further include gender, age, being Swiss, education of mother and father, the living canton before studying, whether students had study-related work and whether students had study-unrelated work.
Figure 4 shows the results. Regarding the raw gender difference, we observe a larger gender pay gap among lower paid graduates than among their better paid counterparts. To investigate what share of the raw gap can be explained by the covariates, we use the decomposition method described in Chernozhukov, Fern´ andez-Val, and Melly (2013). The results are reported in Appendix Table A.2. It is striking that once our rich set of covariates is controlled for, the gender wage gap is very similar across the quantiles, at around 7 per cent (see Table A.2). As a result, the variables we use in our models can explain substantially more at the bottom of the distribution than at the top. We find that our covariates explain 65–75% of the gap in the bottom three deciles, but only 30–40% in the top two deciles. Interestingly, further results (not shown for space constraints) show that this is pattern is essentially driven by the role of major choice, this is in line with the results in Table 7.
In response to the mounting demand for a college education from rising numbers of high school graduates, many developing countries have deregulated the university market. They have allowed private profit and nonprofit institutions to enter the market, massively increasing the supply of higher education, without determining whether this supply boom is resulting in high underemployment among professionals. A more cautious approach, taken by countries with stronger regulatory and enforcement institutions, has been to set minimum standards for licensing new private and public universities and to promote quality assurance through mandatory or voluntary accreditation mechanisms.