The Differentiation of Quality in Higher Education and Graduates’ Wages in Russia

Abstract

More than one-third of Russia’s labour force has a university diploma. With rapid massification, higher education quality turns into one of the key determinants of graduates’ earnings, at least at labour market entry. This paper focuses on two measures of educational quality (level of university selectivity and honors degree) and analyzes their association with graduates’ success in the Russian labour market. Using nationwide administrative data, this paper explores early-career labour market outcomes of Russian graduates with bachelor’s and specialist’s degree. The results suggest the existence of a significant wage premium associated with graduating from more selective universities. The observed positive effect consists of three components: individual abilities, social environment (i.e., networking possibilities and peer-effects), and quality of training. Having an honors diploma is also significantly positively related to early career outcomes, contrary to common belief.