Age at graduation and its reflections in early career prospects

ABSTRACT

We analyse the association between age at tertiary graduation and outcomes of the first phase of the working career in Italy by using a rich longitudinal dataset built merging EU-SILC survey data with individual administrative records on working careers. Labour market outcomes is observed at the entry and along the 10-year period from graduation. No large differences in weekly and annual earnings and worked weeks emerge across individuals who attained the degree at different ages, thus showing a negligible direct penalisation related to graduating not at typical age in Italy. In particular, no statistically significant associations emerge as concerns the link between age at graduation and total earnings obtained during the 10 years from graduation.

KEYWORDS:

• Age at graduation
• earnings profiles
• Italy
• early career
• tertiary graduates

Acknowledgements

We are grateful to an anonymous referee for the helpful comments. Michele Raitano thanks Giacomo Brodolini Foundation for the access to the AD-SILC database.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Carmen Aina http://orcid.org/0000-0003-1200-7173

Michele Raitano http://orcid.org/0000-0002-3706-1208

Notes

1 The average age at which students first graduate is a combination of average age at entry, programme length and the effective number of years spent to attain the degree.

2 For a survey on the determinants of delayed graduation and university dropout, see Aina et al. (2018).

3 AlmaLaurea is an interuniversity consortium established in 1994 and currently counts 75 Universities as members and represents about 90% of Italian graduates.

4 ISCED stands for International Standard Classification of Education, which was proposed for the first time by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1997.

5 The term dependent self-employed is used to group individuals who work as a self-employed in legal terms – they work at their own risk and are not formally subordinated to an employer – but are often ‘economically dependent’ on an employer since, in most of cases, their activity is reliant upon single (or few) clients.

6 Wages and earnings are defined at constant prices 2015. To reduce the influence of possible outliers, we drop from the sample the top and bottom 1% of weekly wages and annual earnings distribution.

7 NACE is the acronym for Nomenclature statistique des Activités économiques dans la Communauté Européenne.

8 In our dataset, liberal professionals represent 80.5% of tertiary graduates working as a self-employed.

9 The panel is unbalanced since some individuals are absent in administrative archives during the 10-year period. However, the absence is not due to attrition (all workers are tracked by these archives) but is due to a whole year spent without working. The absence might depend on several reasons (long-term unemployment, informal work, voluntary inactivity, and migration abroad) that are not distinguished on our dataset. Note, however, that periods spent in sickness, maternity or receiving the Cassa Integrazione allowance for temporary suspension of the job without having been fired are recorded and considered as working periods in our analyses.

10 We exclude from the analysis the few tertiary graduates that were still studying at the time of interview in IT-SILC.

11 The entry year is identified as the first year with positive earnings after graduation.

12 We do not include searching time from the graduation until the first working arrangement as a labour market outcome since searching time is mis-measured in our dataset (we observe the year of graduation but not the exact date of university degree attainment).

13 Estimates of weekly wages and annual earnings in the year after graduation can differ from estimates related to the first job after graduation because in the latter case also job relationships started after the end of the first year after graduation are considered, while in the estimates at ‘1 year from graduation’ only individuals earning a positive wage in that year are included in the analysis.

14 When considering total worked weeks and earnings over the 10-year period, possible years spent without working are included in the computation of the indicator (i.e. cumulated weeks and earnings are not averaged by the number of years with positive earnings).

15 No datasets jointly record in Italy the field of study of tertiary graduates and worker’s detailed sector of activity. A periodical survey run by the Italian National Institute of Statistics (ISTAT; available at https://www.istat.it/it/archivio/6993) where 19 large sectors of activity are distinguished, shows that the heterogeneity in field of studies of tertiary graduates largely reduces within these sectors. For instance, 77% of those working in the health sector attained a degree in Medicine (whose legal duration is 6 years in Italy), 82% of people in the financial sector attained a 4-year degree in Law, Economics or Social Sciences and about 70–80% of tertiary graduates employed in manufacturing obtained a 5-year STEM degree.

16 Total earnings over the 10-year period are computed summing individual earnings at constant prices. Results do not change if we compute cumulated earnings by applying various discount rates (e.g. the real GDP growth rate) to earnings in the various years.

17 In 2001 the share of graduates in the 25–64 age cohort was of 10% (12% in the 25–34 age cohort), the lowest in the OECD area, after Portugal and Turkey (OECD 2003).

18 The average yearly real GDP growth rate in the period 1996–2001 was 2.35%.