Graduates of elite Australian varsities 'lose out on pay'

Students at a Monash University campus in Australia.
Students at a Monash University campus in Australia.PHOTO: MONASH UNIVERSITY

They earn less than peers from newer tech-oriented schools: Survey

Earning a degree from one of Australia's elite "sandstone universities" has long been believed to be the pathway to a higher salary.

But a controversial study, based on surveys of more than 12,000 people, found that graduates of newer technology-oriented and research universities earn significantly more than alumni from the Group of Eight (Go8) top universities.

The prestigious group includes Australia's oldest and top internationally ranked universities, including the University of Melbourne, the Australian National University, the University of Sydney, Monash University and the University of New South Wales.

The government-funded annual study released last week, whose "surprising" result was criticised by the leading universities, found that graduates of technology universities such as the University of Technology, Sydney, or Melbourne's RMIT University earn 9 per cent to 10 per cent more than graduates of the Go8 universities, which tend to require higher entrance scores.

Graduates of "innovative research universities" like La Trobe University or Griffith University earn 13 per cent to 15 per cent more, while those from regional universities, such as Southern Cross University, earn about the same.

QUESTIONABLE

The fact the research delivered results so different from everything that had gone before should have raised some flashing lights.

MS VICKI THOMSON, the Group of Eight's chief executive, who questioned the methodology used for the study

The study, called the Household, Income and Labour Dynamics in Australia, was conducted by Associate Professor Roger Wilkins of the University of Melbourne. He suggested that the pay differences may be due to a greater focus on vocational fields at technical and research universities, or because Go8 graduates take up less well-paid jobs in research or academia.

The study noted that the findings were based on full-time employees, and graduates of Go8 universities may be more likely to be high-earning bosses or self-employed earners like doctors or senior lawyers.

But the Go8 heavily criticised the findings, calling the results "disappointingly suspect". The group's chief executive, Ms Vicki Thomson, questioned the study's methodology and pointed to other studies finding that Go8 graduates earn more.

"The fact the research delivered results so different from everything that had gone before should have raised some flashing lights," she wrote in The Australian Financial Review. She added that the group was more committed to lower-paid disciplines like the arts and humanities.

Students are drawn to Go8 universities for a range of factors, including prestige, course diversity and, presumably for many, a belief that their ensuing salary will be higher.

This was supported by a study last year by independent think- tank Grattan Institute, which found that graduates of sandstone and technical universities earn about 6 per cent more over their lifetimes than those from other universities. But it also found the course studied was a bigger factor in determining pay than the choice of university. The highest-paid fields were law, engineering and commerce.

Ms Ittima Cherastidtham, the institute's senior associate for higher education, stood by its findings last year, noting the more recent results did not take into account self- employed graduates or type of discipline. "We would expect a higher salary premium for Group of 8 graduates," she told The Straits Times.

Dr Wilkins told The Straits Times he examined the impact of studying different disciplines, which was not in the study. But, he said, it did not affect the findings on pay for Go8 graduates. He said: "The results of the survey are surprising but explicable."

It is possible that Go8 graduates tend to pursue "more interesting" but less lucrative careers like those in academia or the public service. Also, Dr Wilkins said, the results did not take into account graduates such as international students working overseas, or the self-employed.

A version of this article appeared in the print edition of The Straits Times on July 23, 2015, with the headline 'Grads of elite Aussie varsities 'lose out on pay''. Print Edition | Subscribe