Are European degrees all the same?

Are European university degrees of equal value? Not according to a paper given at last week's ESPE 2006 conference in Verona.  Johanna Schneider, visiting scholar at the Institute for the Study of International Migration at Georgetown University, has looked at the earnings of European university graduates in the United States, and the effect of their place of education. Her paper, Return on Education for Immigrants: The Case of Highly Skilled Europeans in the United States (PDF), finds a wide variation in graduate earnings:

While most studies treat European immigrants as a single group doing fairly well in the United States, this paper suggests that there is reason to assume differences in return on education among European countries. Indeed, idiosyncratic sociopolitical structures and heterogeneous education systems among European countries lead to significantly different regional results.

According micro data from the National Survey of College Graduates (National Science Foundation) immigrants who received their degree in either Eastern or Southern European countries earn less than natives along the lines of economic assimilation theory. In contrast, and controlling for relevant variables, immigrants from Western or Northern Europe earn up to 14 and 23 percent more than comparable nativeborn Americans. These findings highlight how European degrees are valued and the extent to which they prepare individuals to compete in international labor markets.

She draws a clear policy conclusion:

...the findings may provide valuable support to the Bologna Process launched by the European Union to improve and equalize higher education in its member countries.

Quite. According to her estimates, Western Europeans earn 13.8% more than natives and Northern Europeans 22.8% more. However her paper does not define which countries are in each region. Nor does she break down the results by country. That would be extremely interesting.

Comments

[George J. Georganas]

"her paper does not define which countries are in each region"

It does in this footnote :
"6 The regions are divided as follows: Western: France, Germany, Luxembourg, Netherlands, Austria and Belgium. Northern: Denmark, Finland, Ireland, Sweden and United Kingdom. Southern: Greece, Italy, Malta, Portugal and Spain. Eastern: Poland, Czech Republic, Slovakia, Hungary, Estonia, Latvia and Lithuania."

A more serious problem is that the potential income of each graduate in the country of origin, presumably a significant factor in deciding whether to emigrate or not, is missing. Emigration entails significant costs. Graduates emigrating to the US must get those costs reimbursed by their employers, plus the income they forego by leaving their country of origin. Thus, the income level they attain in the US most likely reflects the income level they left behind (plus the costs of emigrating, and I do not limit it to moving expenses). So immigrants to the US from high-income countries must end up with higher incomes that those from low-income countries. This is the logic that should apply to recent arrivals to the US, which, I believe, is the group that the study focuses on.
If only it were so easy to value university degrees !
The Bologna process has already too many bad-faith critics. Let us spare it the good-faith ones that will spring up if we claim weak research findings in its favour.

[New Economist]

Thanks George. I looked at footnotes 1 and 2, which listed all the countries but not allocate them by region. Missed footnote 6.

It does seem a bit odd though to have included Ireland and the UK in 'Northern' but not the Netherlands, which on most measures has more in common with Scandinavia than the English-speaking EU countries.

[Blissex]

«degree in either Eastern or Southern European countries earn less than natives along the lines of economic assimilation theory. In contrast, and controlling for relevant variables, immigrants from Western or Northern Europe earn up to 14 and 23 percent more than comparable nativeborn Americans.»

Weird, because salary in the USA like everywhere else depends so much on ''insidership'' (economic assimilation theory :->).

There is also the point that all those European immigrants are likely to be legals coming in on the ''skills'' visas, and thus specifically selected to be more-than-average earners.

I also think that conversely some higher portion of southern emigrants are coming in on the ''family'' visas, as they are more likely to have living relatives in the USA.

Also, visas are also by country, or where, and IIRC the southern country visas were allocated when those countries had a lot more emigrants, so I seem to remember the quotas were not fully used up, thus allowing lesser skilled people to emigrate. But frankly I have no idea if this is happening, just listing something to check.

But broadly I think that this is still the major factor:

«the income level they attain in the US most likely reflects the income level they left behind (plus the costs of emigrating, and I do not limit it to moving expenses). So immigrants to the US from high-income countries must end up with higher incomes that those from low-income countries.»

Also, a number (who knows which percentage) of those skilled immigrants are probably academics, and academic pay in various countries is very different, and is considerably less generous in most southern european countries.

Also, working visa rules favour the young, and in many ''Southern'' european countries pay is a lot more positively age related than in ''Western'' or ''Northern'' ones, especially in the civil service, which employes more workers too, and most of the academics.

Another factor probably is also that someone emigrating from Denmark of Sweden is also going to a country where private health insurance costs at least $7,000 a year, and welfare is particularly mean, and one would want to factor that in any compensation arrangements.

But what astonished me too is that the ''Northern'' group has a significantly higher premium not over the ''Southern'' group, but over the ''Western'' group, because in practice the standards of living for graduates and many other conditions in the ''Western'' and ''Northern'' groups are much the same.

With one significant exception that I can think of though:

«odd though to have included Ireland and the UK in 'Northern' but not the Netherlands»

This oddity probably means that the overwhelming majority of ''Northern'' groups emigrants are from England (by far the largest country of the group), and I would wildly guess that a significant percentage of those has Oxbridge degrees and/or works for financial companies, and since Oxbridge and/or City people command huge salary premiums, they probably will move to the USA only if the offer is really good.

Uhm, if this is the case I wonder whether those ''Northern'' emigrants with an Oxbridge degree get a better deal because they already have by rights a very good deal before emigrating, or whether it is because Oxbridge degrees command a huge premium as such as they do in England, in the USA too, as if they were Ivy League degrees.

I personally would not expect USA employers to have any clue whether a Barcelona or Humboldt or Trondheim degree is more prestigious, except that may possibly have heard of the fame of Oxbridge, especially if in the academic or research sector.

Probably USA employers do not look at all the prestigiousness of the European degree of a prospective employee, with the possible exception of Oxbridge, which is the only one to have something like a global brand, and just got to pay more than whatever the person involved was making in Europe.

[CurlyWurly]

How about the influence of english* skills as a determinant of pay in the US? I suppose that the northerners (which include the english themselves and those scandinavian countries where foreign movies usually aren't dubbed) are better at it then the western europeans whose skills in turn are typically better than those of the southern europeans. I wouldn't be surprised if there was some statistically significant correlation between the two (pay & english skills).

[CurlyWurly]

Oh, it has already been mentioned in the paper. Maybe I should have read it before posting.

[George J. Georganas]

A vivid illustration of the language premium :
A southern European (myself earlier in this thread) writing in Newspeak (despite US and UK degrees) :
«the income level they attain in the US most likely reflects the income level they left behind (plus the costs of emigrating, and I do not limit it to moving expenses). So immigrants to the US from high-income countries must end up with higher incomes that those from low-income countries.»

The same thing stated in English by Blissex, a few posts later :
"Probably USA employers do not look at all the prestigiousness of the European degree of a prospective employee ... and just got to pay more than whatever the person involved was making in Europe."

[Blissex]

«A vivid illustration of the language premium : A southern European (myself earlier in this thread) writing in Newspeak (despite US and UK degrees) :»

Uhmmmm, I am a southern european too :-).

But then your original statement is written in good English too; the difference with mine is that your english seems a bit influenced by the sort of ''academospeak'' that tries to obfuscate, I try to write in the turinese tradition of trying to speak plainly of complex things. Much to my loss, because my paraphrase sounds a lot less businesslike than your original. :-)

(written half tongue in cheek :->).

However I do not think that ability to speak english better or not might really influence salary in the USA to that extent. I'd rather think that your original point, origin salary, is most likely, with my additional points about academic origin salaries and family sponsored visas.

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