Starting Wages

The rise of global university rankings has garnered much attention in recent years. Various ranking systems exist, but all are conceptually similar in that universities are evaluated and ranked on the basis of comparable indicators, with a focus on research performance. Although these rankings are widely criticised as over-simplistic and methodologically deficient, there may be advantages to attending a well-ranked university. According to a recent Backgrounder on university rankings published by the Group of Eight (Go8), being well ranked globally can have positive effects on graduate employment and earnings. In this article I investigate this proposition in the context of the Australian graduate labour market. Specifically, I use data from the Graduate Destination Survey to investigate whether bachelor degree graduates from top-ranked Australian universities earn higher starting wages, ceteris paribus, than graduates from other institutions. I do this using a two-step regression approach to control for the potential non-random selection of students into top-ranked universities