Master’s degrees lead to better employment prospects and higher salaries

New research from HSE University has established the link between obtaining a master’s degree and success in the labour market. The research used a large quantity of data from across Russia. According to the researchers — Ksenia Rozhkova, Sergey Roshchin, Sergey Solntsev, and Pavel Travkin — people with master’s degrees generally have better chances of employment and higher salaries than those with undergraduate degrees only. The results were published in the journal Voprosy Ekonomiki.

What Is It About?

The influence of a master’s-level education on employment success has been confirmed in various countries. For example, those with master’s degrees in the US and the UK earn an average of 5.5–30% more than those with undergraduate degrees. In Japan, this figure rises to 30–40%.

The increase in earnings can vary by gender and subject area. In the UK, men with master’s degrees earn an average of 12% more, while women earn 17% more. Graduates with degrees in the humanities benefit less than those from more sought-after technical and engineering disciplines, while teachers benefit less than administrators and managers. In the US, people with business-related master’s degrees earn 19–23% more, while those with education-related degrees lose out.

The HSE University researchers confirm that the situation in Russia is similar. Gender also has an influence in Russia, as do subject area, changing subject during study, working while studying, region, and type of higher education institution.

How Was It Researched?

The research utilized Russia-wide administrative data collected as part of the Graduate Employment Monitoring project established by the Ministry of Labour and Social Protection and the Federal Service for Labour and Employment. The database contains information on almost every higher education institution in Russia, particularly about the 2017 graduates of bachelor’s programmes who were the focus of the study. The final sample included around 400,000 people aged 30 and under. Almost 116,000 people from this group enrolled in master’s degrees immediately after obtaining their undergraduate degrees, and went on to graduate in 2019.

Three criteria were measured to assess the quality of the education obtained:

Whether the graduate was awarded a red diploma (signifying honours)

Whether the graduate had combined work with their studies

The type of institution: federal universities, universities created through mergers of other institutions, 5-100 Project members, and universities that do not fall under the other categories.

The researchers also examined social and demographic factors (gender, age, disabilities) and factors related to changing university, region of study, type of university and subject area. The data was analyzed using econometric models, and the results were calculated separately for men and for women.

What Are the Findings?

Successful students are more likely to apply to master’s programmes. Almost one third (30%) of master’s students graduated from their bachelor’s degrees with honours, a number that rises to 45% for master’s graduates. Having an ‘excellent’ academic record has an impact in the labour market, as does having a master’s degree in itself.

Compared to undergraduate degrees, master’s degrees improve employment prospects by an average of 12% for women and 3% for men. Women and men with honours degrees gain a 3% and 4% boost respectively.

‘This disproves the common view that Russian employers only care about work experience and not the quality of candidates’ education,’ conclude the researchers.

People with master’s degrees have higher salaries, although this primarily affects women, who gain an extra 10%. Men gain a more modest 2.5%.

Women experience a greater benefit because a master’s degree is an investment in their career, the researchers explain. It provides access to better workplaces and compensates for the gender pay gap.

Conversely, possession of a red diploma has a negligible or negative effect. The ability to gain work experience is an important factor for master’s students, and achieving academic success is too time-consuming to allow for this.
 

A total of 87% of master’s students combined their studies with work. After graduating, these students had improved chances of employment (10% better for women, 5% for men) and higher salaries (8% for women, 6% for men).

Most applicants to master’s programmes do so to learn more about their field, rather than branch out into a new one. The latter group comprises only 22% according to the research, and this group has greater difficulty finding employment.

Changing subject area at the master’s level reduces the chances of finding employment by 2% in women and 3% in men.

Those with bachelor’s degrees in the natural sciences and humanities are somewhat more likely to join master’s programmes, but the end result is not the same for everyone. People with master’s degrees in economics and management find work 5% faster, while those with agricultural degrees are 2% less likely to find employment.

A master’s-level education has no effect on salaries for workers in culture, art, the humanities and the social sciences. The largest gains were observed in those with specializations in digital technologies and management.

Possession of a master’s degree in mathematics or computer science boosts salaries by 15% for women and 6% for men. Master’s degrees in economics and management provide 20% and 12% gains for women and men respectively.

Graduates’ chosen universities for master’s programmes have an even bigger impact, with national research universities and 5-100 Project members at the forefront. There are 29 research universities in Russia (the researchers studied graduates of 25) and 21 members of the 5-100 Project (of which the researchers examined 20).

Employment prospects for master’s graduates of national research universities and 5-100 project members are improved by 12.5–13.5% for women and 7–8% for men. Salaries benefit from increases of 15–16% and 4–7% respectively.

There are two reasons for these results in special-status higher education institutions. The first is the high demand for such universities among talented candidates. The second is the high quality of education, which ‘translates into reputation among employers.’

Also important are regional factors such as the location of the university and the state of the local job market. For example, 5-100 member universities are largely located in major cities and developed regions, while merged universities are oriented towards economies with lower potential.

Why Is It Important?

This is the first full-scale assessment of the return on master’s degrees in the Russian labour market. The research confirms the advantages of master’s degrees and allows HSE University researchers to disprove a range of existing myths. Master’s students’ increased chances of finding employment cast doubt on the widespread perception that employers ‘have not adapted to the bachelor’s–master’s system’ and do not differentiate between different levels of higher education.

It is also incorrect to view a master’s education as an obligatory continuation of an academic career. Postgraduate education is valuable not just as the next step towards a doctoral degree, but as a stepping stone into working life. As such, master’s programmes must also be designed to impart the required knowledge and skills.