Does attendance to a four-year academic college versus vocational college affect future wages?

Abstract

Taiwan is one of the few countries in which bachelor degrees can be earned by attending either 4-year academic colleges or vocational colleges. This paper offers new evidence on whether returns to B.A. degrees are significantly different between academic and vocational 4-year colleges using the 1998-1999 Taiwanese College Graduate Survey. The multinomial logit model is applied to correct self-selection for employment status, and a wage equation is then estimated. The results suggest that the returns to 4-year academic colleges are 6% higher than those to 4-year vocational colleges. We also find a significant effect of college quality on wages. Moreover, public academic college graduates have the highest returns whereas those who attend private vocational colleges have the lowest returns.

Inequality in the Initial Wage of College Graduates at the College-Level Perspective

“…Even if the content of the graduates' learning is very weakly related to their employment position, the selected college can also signal information to the employers, who seek to hire college graduates who possess a higher level of intelligence and ability [4][5][6][7]. Keng and Lo (2006) researched the starting salaries of undergraduate and junior college graduates in Taiwan and found that the initial wage of undergraduate graduates was significantly higher than that of junior college graduates [8]. Jason (2012) found through the analysis of empirical data that factors such as college type and college characteristics had a significant impact on the initial wage of undergraduate graduates [9].…”