Quality of higher education and earnings: evidence from Finland using field-of-study-level quality measures

Abstract

Using administrative data from Finland, this paper empirically examines the relationship between university graduates’ early career earnings and three measures of university quality: the number of teachers per student, the number of publications per researcher and the number of applicants per admitted student. A distinction to previous studies is made by paying special attention to field-of-study heterogeneity: the quality measures are allowed to vary by a student’s field, while the heterogeneity of earnings and individuals across fields is accounted for in the analysis. For the most part, the results indicate that the relationship between institution quality and earnings is rather weak; however, certain significant quality effects are also found. In particular, the teachers/student ratio is found to be positively associated with the earnings of women and graduates from the humanities. Overall, the results indicate considerable heterogeneity in quality effects across genders and fields.