The global distribution of college graduate quality
What is this research about and why did you do it?
We have known for many years which fraction of the population graduates from college in different countries, and that developing economies have fewer college graduates. Yet so far there has not been any systematic measure of the quality of those colleges or their graduates. This shortcoming is particularly important in light of recent evidence showing that inventors, entrepreneurs and chief executives in the United State mostly attend a small set of the nation’s best colleges. Similarly, we typically know the years of education of migrants across countries, but not the extent to which migration contributes to human capital gains or losses, especially outside of the US.
How did you answer this question?
We propose and implement a measure of the average human capital of graduates from colleges around the world, which we call college graduate quality. To do so, we use the proprietary database of the website Glassdoor, a popular web platform that collects earnings and resumes (with details on education). Glassdoor provides us with a large, global sample consisting of 2.2 million workers who obtained a bachelor’s degree from 2,873 different colleges in 48 countries. It also contains data on thousands of workers who report earnings before and after migrating among a large set of countries. We use data on the earnings of migrants who work in multiple countries to estimate the effect of country as well as skill portability and selection on comparative advantage on earnings. We then adjust workers’ earnings so that they capture what each worker would earn in a common labor market. We take the average of these adjusted earnings by alma mater as our measure of college graduate quality.
What did you find?
Our estimates reveal large differences in college graduate quality across colleges and countries. As a first approach, we estimate the difference in earnings for graduates of top colleges. Our estimate is based on the rankings of the Center for World University Rankings (CWUR), one of the more widely used proxy-based rankings. We find that graduates of their global top-20 colleges earn 60 percent more than graduates of unranked colleges in the same labor market. We then aggregate our findings to the country level and find that college graduate quality is strongly correlated with development, with an estimated elasticity centered on 0.21. To put this figure into perspective, college graduates from the country at the 95th percentile of the income distribution in our sample earn 52 percent more than college graduates from the country at the 5th percentile. We also document new and complementary facts on the average human capital per migrant, building again on the large number of migrants in the Glassdoor database who are educated in one country but work in another. Our main finding is that brain drain from developing countries is more extensive than previously thought; not only do developing countries lose a higher share of their college-educated workers, but those who leave have 50 percent more human capital than non-migrants (Figure 1).
Figure plots against PPP GDP per worker (in log scale) the average selection of each country’s emigrants, measured as the log-difference between the average human capital of emigrants and the average human capital of the country’s non-migrants. Data on GDP per worker are from World Bank (2022).
What implications does this have for the research on wealth concentration or economic inequality?
Our research highlights the challenges in developing an education system that provides a sufficient number of workers with the necessary level of human capital to spur economic growth in emerging economies and lower income inequality across countries. While some countries, like India and China, have a college graduate distribution that resembles that of advanced economies (Figure 2a), many others like Brazil, Egypt or Nigeria, have virtually no college above the 25thpercentile of the US distribution (Figure 2b). Our findings concerning the significant extent of positive selection into emigration from developing countries point toward the need to design policies that facilitate the retention–or the return migration–of the most talented graduates.
Figures plot for each country the share of colleges that have estimated graduate quality that falls in the first quartile of the U.S. college graduate quality distribution (or below), the second quartile, the third quartile, or the fourth quartile (or above).
What are the next steps in your agenda?
Our findings are based on the average human capital of graduates by college, not the value added of the college itself. This approach implies that we cannot disentangle whether top colleges merely select the best students or provide high value added. This question is particularly relevant given our results for countries like India, which has low average quality but also some of the world’s top colleges. Are the Indian Institutes of Technology the product of extreme selection among Indian students, world-class teaching, or both? While disentangling these questions requires a different approach, we believe this to be an interesting avenue for future research.
Citation and related resources
Martellini, P.,Schoellman, T., and Sockin, J. (2024) “The Global Distribution of College Graduate Quality.” Journal of Political Economy, Forthcoming.
Related resources:
- WORLD BANK. 2022. World Development Indicators. Washington, DC: World Bank.
