The impact of student academic achievement on graduate salaries: the case of a leading Russian university
This paper analyses the impact of academic achievement on the future salaries of Russian university graduates by looking into the GPA-earnings relationship for graduates of a leading Russian university. The study is based on a pooled cross-sectional CIM HSE graduate survey data (2014-2015). The issue of how student academic achievement, measured by GPA impacts future labor market rewards is analyzed through the set of academic, demographic and labor market factors. Our results indicate that there is a significant positive impact of GPA on salaries of Bachelor programs’ graduates (9-12% wage premium for an additional GPA point). At the same time the impact of GPA on earnings of Master programs’ graduates is negative (7-8% wage penalty for an additional GPA point) or insignificant if we control for the sector of employment.
Among the main factors that positively affect earnings of HSE graduates is work experience. Graduates who combined study and work achieve a 30% wage premium. Intensity of employment is positively correlated with earnings. However, we found no evidence that combining study and work affects student academic achievement, even for those who combined studies with full-time job. Moreover, on average, students who have not worked during their studies have lower GPA.
We found that the negative effect of GPA on graduates of Master programs can be partially explained by degree differences in the sector of employment, especially for Education and Science sector and Entrepreneurship. Master students are much more likely to be employed in Education and Science than others and there is a considerable wage penalty for employment in this sector. We also found that in spite of the higher academic achievement of female students there is a considerable gender wage gap: male graduate earnings are 18-30% higher than earnings of female graduates. These differences can be partially explained by differences in position, accumulated work experience and the sector of employment. Job matching with the field of study in university is insignificant while tenure for the current employer provides a considerable wage premium.