The Bologna process was an attempt to harmonise the higher education systems across Europe by adopting some common standards, and began in 1999. One of the consequences was a large increase in international programmes at postgraduate level, and many of those programmes are taught in English, which reduces to some extent the language barriers (at least, to the extent that English is a common language). How do graduates of these international programmes fare after graduation? That is the research question that this recent discussion paper by Zhiling Wang (Erasmus University Rotterdam), Francesco Pastore (University of Campania Luigi Vanvitelli), Bas Karreman, and Frank van Oort (both Erasmus University Rotterdam) addresses.
They compare Dutch students who studied in international programmes (in the Netherlands) with Dutch students who studied in domestic programmes. A simple comparison of those groups would be problematic though, because of self-selection into programmes. If better than average students tend to choose international programmes, then this would bias upwards the estimated effect of those programmes.
Wang et al. try to get around this by using a matching estimator - specifically coarsened exact matching (which I hadn't heard of before). Essentially, they match students in the international programme with students that fit into the same category, where categories are based on a combination of gender, year of graduation, field of study and university, cultural diversity in the bachelor programme, neighbourhood-level education, and father's income. They then compare students in the international programme with their matched groups who studied in a domestic programme.
Wang et al. use data from the graduates of Masters programmes of thirteen Dutch universities over the period from 2006 to 2014, with education data linked to detailed administrative data by Statistics Netherlands. The full sample has over 29,000 students, while the matched sample reduces this to around 8000). Comparing the labour market outcomes of the matched samples, they find that:
...students from international programmes obtain a wage premium of 2.3% starting from the 1st year after graduation, ceteris paribus. The wage premium keeps increasing by about 1% every year.
That's quite a large effect. So, what explains it? Wang et al. dig a little bit into the mechanisms underlying the difference, and find that:
...the wage premium is largely driven by differential choices in the first firm upon graduation, rather than cross-firm mobility or faster upward mobility within firm. Upon graduation, Graduates from international programmes are much more likely to choose large firms that have a higher share of international employees and have business of trade for their first jobs. [They] get a head start in wage level and the initial wage advantages persist in the long-run.
Joining an international programme appears to be an excellent investment. However, there are a couple of limitations with this study. First, the matching estimator does ensure that the comparisons are between students that are very similar in terms of their observable characteristics. However, that doesn't ensure that they are similar in terms of unobserved characteristics. Clearly, the two groups are different in some way that induces some students to choose an international programme, and others to choose a domestic programme. That choice is not random. That means that these results do not demonstrate causality - we can't say for certain that an international programme causes the wage premium.
Second, the definition of international programmes was a little odd to me. Wang et al. use a data driven approach. As they explain:
...we compute proxies for programme-level internationalization based on detailed information of students’ ethnic composition. We classify all students into different cells by year of graduation and study programme. For each cell, we make a count of “most likely English-taught foreign students” that satisfy three criteria: First, they are first-generation immigrants... Second, they have never lived in the Netherlands before they start master programmes... Third, they are originally from non-Dutch-colony areas, non-Dutch-speaking countries or non-German-speaking countries... Our preferred measure is that when the number of these students exceeds 4 or the share of these students exceeds 25% for the first time, the study programme is regarded as an international one from that year onwards.
Their proxy for an international programme is really proxying the exposure to foreign-born or foreign-educated students. It isn't so much about international programmes at all. It surprised me that they didn't simply investigate which of the university programmes are described as international programmes, taught in English, etc. and use that to construct a measure instead.
Nevertheless, exposure to diversity is important (more on that in my next post), and this research is at least suggestive that such exposure may lead to better jobs in larger and more internationally-linked (and, importantly, higher paying) firms.
[HT: Jacques Poot]
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