Institutional effects on graduate employment: a comparison across six European countries and Japan

Using comparative data from six European countries and Japan, our paper analyses to what extent differences in graduate employment can be explained by differences between higher education institutions, i.e. “institutional effects”. In order to estimate the size of these institutional effects we carry out multilevel analysis. This analysis shows that there appears to be large inter-country and field differences in the importance on graduate employment of the institution where the graduate studied. For example, for Business studies, between 20 and 30% of differences in graduate employment prospects are due to differences of institutions in France and Germany, whereas the institution of study has no effect in Sweden. We attempt to explain these graduate employment differences between institutions in terms of Human Capital theory (illustrated by the teaching quality of each institution) and Filter theory (indicated by the selectivity of each institution). In addition, we consider the cases where the more selective institutions also develop a higher level of Human Capital amongst their students. Our multilevel analysis shows that the relative impact of either the above institutional selectivity (Filter theory) or teaching quality (Human Capital theory) on graduate employment prospects differs between countries and field of study. For example, again for Business studies, the selectivity of the departments /institutions has a greater impact on graduate employment than their respective teaching quality for France, Japan and the Netherlands. However, the opposite result appears for Germany and Italy, where computer skills such as word processing have a significant impact on graduate employment. Finally, it appears that the skills that have a significant effect on graduate employment are possessed by graduates from all institutions, and not only graduates from selective institutions. Indeed, the skills possessed to a higher extent by graduates the selective institutions do not have an effect on graduate employment; which means that the above effects of institutional selectivity and teaching quality appear also to be distinct from each other. To conclude, given that the research literature on institutional effects on graduate employment has mainly consisted of American research, it is interesting to note that our present research shows some significant results for some European countries and Japan. Our analysis shows that institutional effects to be generally larger in the case of these European countries and Japan than in previous American research. In addition, the effect of institutional selectivity (filter theory) appears also higher in our present research than in this aforementioned American research. This latter result is interesting in terms of a comparison of the prestige of Imperial universities and Grandes Ecoles, respectively in Japan and France, and “Ivy League” universities in the United States.