Top unis don't deliver top graduate pay

Graduates from prestigious universities do not necessarily acquire higher starting salaries, in comparison to graduates from universities of lower rankings, a new study has found.

The study in The Australian Economic Review found it is the type of employment obtained that determines labour market outcomes and remuneration.

The paper, "The influences of institution attended and field of study on graduates' starting salaries" used a semi-logarithmic earnings equation to examine if alleged differences across universities are reflected in the labour market outcomes of Australian graduates.

The results indicated minimal effects on starting salary determination associated with attending high ranking universities and fields of study. In comparison with degree type variables which only varied by 12 percentage points, employment-related variables had strong effects with starting salaries differing up to 30 percentage points across industries and 33 percentage points across occupations.

"Australian universities place great emphasis on differentiating themselves on the basis of quality - as evidenced in their references to their Go8 membership, various accreditations, status in Hobson's Good Universities Guide and placement in national and international rankings. However, the results of our study demonstrates that it is what you do in the labour market, and not where or what you studied; that really matters", said co-author Elisa Rose Birch from the University of Western Australia.

Findings suggest that instead of enrolling in a prestigious university to obtain a premium pay scale in the labour market, it is more effectual to enroll in a premium discipline - such as engineering, public health, and management - or to pursue a career in an industry or occupation that pays well.