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Do International Study Programmes Pay off for Local Students?

Author

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  • Wang, Zhiling

    (Erasmus University Rotterdam)

  • Pastore, Francesco

    (Università della Campania Luigi Vanvitelli)

  • Karreman, Bas

    (Erasmus University Rotterdam)

  • van Oort, Frank

    (Erasmus University Rotterdam)

Abstract

International study programmes are increasing in number worldwide, but little is known about the impact on local students' job prospects, especially in a non-English speaking countries. Using rich administrative data from Statistics Netherlands, we analyse labour market outcomes of native graduates in master programmes of Dutch universities between 2006 to 2014 within 5 years after graduation. A coarsened exact matching analysis within cohort-university-detailed field of study group addresses the self-selection issue by generating a matched sample of students with similar characteristics. We find that graduates from international programmmes 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. We investigate the mechanisms through which the wage premium operates. The wage premia can neither be explained by wage increase via cross-firm mobility, nor by faster upward mobility within a firm. Instead, evidence point towards the differential characteristics of the first job upon graduation. Graduates from international programmes are much more likely to choose large firms that have a higher share of foreign-born employees and have business of trade for the first job. They get a head start in wage level and the initial wage advantages persist in the long-run.

Suggested Citation

  • Wang, Zhiling & Pastore, Francesco & Karreman, Bas & van Oort, Frank, 2021. "Do International Study Programmes Pay off for Local Students?," IZA Discussion Papers 14374, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14374
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    Keywords

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    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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