Same Education, different labour market?

The Point: This paper analyzes the direct effect of social origin on the labour market outcomes of graduates in Italy. While there are studies that scrutinize the effect of social origins on the labour market outcomes of highly educated individuals, a major challenge for these studies lies in the measurement of education. This paper improves previous studies by using a more detailed measure of education that considers both the vertical (degree type) and horizontal (field of study and university awarding degree) stratification of education. Findings indicate that there is a substantial effect of social origin for graduates on the labour market outcomes which is not artifact due to a poor measurement of education. However, the mechanisms that favour individuals with higher social origin on the labour market are not “activated” in the first years after graduation, but later in their professional careers. Non-cognitive skills contribute in explaining the social origin effect in labour market outcomes but do not fully account for it. The Quote: “The graduates from privileged families have the option to wait after graduation until they find a suitable job in terms of skills and expectations on the labour market. This might represent a mechanism through which social origin can be translated into a source of advantage in the early stage of graduate’s career.”

The Questions: (1) Does the direct effect of social origin on labour market vanish once we consider both vertical and horizontal stratification? (2) If there is an effect of social origin on labour market outcomes, to what extent is this effect mediated by the differences in productivity (cognitive and non-cognitive skills)? (3) If there is an effect of social origin on labour market outcomes one year after graduation, does this effect become stronger or weaker three and five years after graduation?

The Data: I use a unique administrative dataset (AlmaLaurea) that includes the universe of graduates in 2010 in 64 Italian universities (comprising approximately 80% of the entire Italian graduate population). Labour market outcomes are measured with follow-up surveys one, three and five years after graduation.


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