Of higher salaries and superior skills: comparing the worth of public and private university education

ABSTRACT

The paper compares the worth of public and private university education. We develop a Public–Private University Worth parity index and provide empirical estimations to lend rigour in testing our main hypothesis that the type of university education does not matter in determining salaries and skills’ value-added. Using data from a recent questionnaire survey, our proposed parity index suggests that private university graduates have higher salaries, while public university graduates have better skill gains. Nevertheless, after controlling for variables not captured in the index calculations, our empirical estimations show no strong evidence that type of university education drives salaries and gains in skills’ value-added. Our paper fills the gap of empirical works that compare public-private university worth, particularly in the context of Malaysia and countries with a similar public-private university education system. Our findings behove policy-makers to de-emphasise the public-private university divide.

KEYWORDS:

• Public and private universities
• worth of university education
• parity index
• job salary
• skills’ value-added

Acknowledgments

The authors are grateful for the research funding support provided by the Malaysian Ministry of Higher Education under the FRGS Grant 1/2016 SO Code 13577.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Malaysian Ministry of Education [FRGS Grant 1/2016 SO Code 13577].

Notes on contributors

Jan-Jan Soon

Jan-Jan Soon is Associate Professor at Universiti Utara Malaysia. Her areas of interest include labour economics and applied microeconometrics, with a focus on impact evaluation. She earned her PhD in Economics from the University of Otago.

Hock-Eam Lim

Hock-Eam Lim is Professor of Economics at Universiti Utara Malaysia. His areas of specialisation include labour economics, happiness studies, and applied microeconometrics. He received his PhD in Economics from Monash University.

Russayani Ismail

Russayani Ismail is Professor of Economics at Universiti Utara Malaysia. Her main research interests revolve around student loan schemes and higher education policies. She received her PhD in Economics from the University of Exeter.