Júlia Varga Hungarian Academy of Sciences Institute of Economics
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Transcript of Júlia Varga Hungarian Academy of Sciences Institute of Economics
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Júlia VargaHungarian Academy of Sciences
Institute of Economics
SEBA – IE CASS - IEHAS Economics of Crisis, Education and Labour
Chinese - Hungarian International Conference 30. 06. 2011, Budapest
The Labour Market Value of Higher Education in the 2000s in Hungary: Effects
of the Field of Study and Institution of Graduation
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• Sharp increase in the supply of higher education graduates
• Number of works document how the average return to higher education has changed in Hungary, but very little is known about the causes of differences in labour market success among graduates
• Large differences in earnings and employment probability across fields
• Wage dispersion of higher education graduates has increased
Motivation
SEBA – IE CASS - IEHAS Conference Budapest 30.. 06. 2011.
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Number of graduates, 1990-2009
2000
030
000
4000
050
000
6000
0
1990 1995 2000 2005 2010Year
Full-time students Total
4
100
120
140
160
180
2002 2004 2006 2008 2010year
Full sample Aged 22-30
College level
160
180
200
220
240
2002 2004 2006 2008 2010year
Full sample Aged 22-30
University level
SEBA – IE CASS - IEHAS Conference Budapest 30.. 06. 2011.
Wage returns to higher education (%) by level of education (college/university)
Based on data of Hungarian Wage Tariff Surveys.
Dependent variable: (log) earnings;
Control variables: educational categories dummies, gender, experience, experience squared.
The percentage effect is (eß–1) × 100 %
. N (Total ):190-230 thousands; N ( young): 38-40 thousands
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Research question
Does the field of study and the institution of graduation affect early labour market success (earnings and employment probabilities) of graduates?
SEBA – IE CASS - IEHAS Conference Budapest 30.. 06. 2011.
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Data
Survey of Hungarian Higher Education Graduates 2010
• Representative sample of graduates in 2007
• Sample 10 % of the population of graduates (4507 persons)
• 10 fields of study, 25 institutions
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Average monthly net earnings and employment rates by field of study
Field of study Net monthly earning 000 HUF
Employment rate %
Business, economics 159 88.0Informatics 155 88.6 Law 152 87.4
Engineering 145 85.9Social 125 86.4
Medicine 122 86.7
Agrarian 120 86.4Humanities 120 81.9Science, mathematics 117 72.1
Teacher training 111 83.2Total 136 85.5
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Within-field variation in average earnings
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ScienceSocialMedicine
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Field of study
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Business, economics
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Within-field variation in employment probability
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0 Humanities Engineering Teacher training
ScienceAgrarian Business, economics
Law Medical Socialinformatics
Field of study
Employment rate
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Measurement problems
• non-random selection of students into different fields of study and different institutions
• more able students are admitted to more selective institutions and fields of study
• factors may influence both the choice of field of study and of institution and earnings (abilities)
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Measurement problems
• two methods are used to control for the potential self-selection of graduates
• effect of field of study: propensity score matching method, average treatment effect on the treated
• effect of institution: HLM-like regressions with field of study * institution fixed effects
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Method 1. Effect of the field of study
propensity score matching method – average treatment effect on the treated
E(Y1|D=1) – E(Y0|D=1)
P(X)=Pr(D=1|X)=E(D|X)
E[Y1|D=1,P(X)]-E[Y0|D=0,P(X)]
D =1 treated: person graduated from the given field of study
D=0 control: person graduated from another field of study
Y1 – outcome measures (earnings, employment probability)
X – observed covariates
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Method 1. Effect of the field of study
gender,
age group dummies (>27 ; 27-35; 35<)
educational attainment of father and mother (educational category dummies)
parents or grandparents have qualification from the same field of study in which the person graduated
type of settlement dummies
type of secondary school dummies
institution/field specialization was the first choice of the graduate
the person completed his/her studies in the normal length of time (yes=1, no=0)
Matching methods: nearest neighbor method (ATTND) and stratification method (ATTS)
Independent variables (observables):
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Field of study Earnings effectEmployment effect
Matching methodATTS ATTND ATTS ATTND
Agrarian Not significant Not significant 0.105 0.149
Humanities Not significant -0.100 Not significant -0.084
Business, economics0.215 0.224 Not significant Not significant
Law0.184 0.149 Not significant Not significant
Teacher training-0.142 -0.147 -0.063 -0.078
Social-0.097 Not significant
Not significant Not significant
ScienceNot significant -0.181 Not significant Not significant
Results 1. Effect of the field of study
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Methods 2. Effect of the institution of graduation
iiINTtINTt
iINT ti Xdy (i=1….N) (1)
INTtk INTtktINTkINTt
j
jjINTt ZINTtq (2)
where , qINTt = INTt from (1)
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Methods 2. Effect of the institution of graduation
iiINTtINTt
iINT ti Xdy Two outcome measures:
1) yi= Net earnings – OLS
2) yi= Employment probability -probit
INTtk INTtktINTkINTt
j
jjINTt ZINTtq Weighted Least Squares
Weights= : inverse of var qINTt estimated from (1)
(1)
(2)
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Methods 2. Effect of the institution of graduation
– step 1
gender,
age group dummies (>27 ; 27-35; 35<)
educational attainment of father and mother (educational category dummies)
parents or grandparents have qualification from the same field of study in which the person graduated
type of settlement dummies
type of secondary school dummies
Institution/field specialization was the first choice of the graduate
the person completed his/her studies in the normal length of time (yes=1, no=0)
Independent variables
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Methods 2. Effect of the institution of graduation
– step 2
Field of study dummies
Institution dummies
College quality:
- applicants/admitted
- number of students per professor
Independent variables
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Results 2. Effect of the institution of graduation
X Significant employment effect
Significant earnings effect
Both effects are significant
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Employment effect
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Conclusions
• some fields of studies have casual effect on early labour market success of graduates
• earnings of graduates from business and economics and from law are higher
• earnings and employment probabilities of graduates from teacher training are lower
• no robust effects of the institutions, with the exception of BGF (higher wages, lower employment probabilities)
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Thank you!
SEBA – IE CASS - IEHAS Conference Budapest 30.. 06. 2011.