Can Corvinus students really earn 110 million more?

Previously, several articles have reported that a Corvinus student with a bachelor’s degree in economics can earn on average HUF 110 million more over the course of their career than the national average for economics graduates. How is this number calculated and what does it mean in practice?

The original article is available in Hungarian on the Közgazdász Online student blog.

– started our conversation Tamara Huber, senior market research expert at Corvinus.

Many approaches can be used to determine the value of a degree, such as national and international university rankings or employer satisfaction, but perhaps the most telling is how much students will earn. “The income data of graduates from a particular institution are interesting themselves, but it is also important to see how they compare to the national data, to other institutions,” the market researcher explained the essence of the data provided by the Educational Authority Diploma Career Tracking System Administrative Database Consolidation (hereinafter DPR AAE).

Calculation of the HUF 110 million advantage

Corvinus used the Educational Authority’s DPR AAE factual data as a starting point when estimating the value of a Corvinus degree over a full career path. On the Diplomán túl (Beyond the diploma) site, anyone can find this data in Hungarian, in addition to general information on job tenure, industry and average earnings.

The time-series data tables can be queried from one to one and a half years from the date of obtaining the diploma, up to seven to seven and a half years. This means that data are now available for graduates from 2011-2018. The latest infographic is for 2020, showing the average values for 2019.

For more in-depth information on the subject, please consult the flash reports of the Educational Authority.

Previously, Corvinus could only see the value of a degree from the DPR AAE in seven and a half years’ time, but a model was needed to see the full career path outcomes. After further reflection on the DPR AAE data, the following estimate was made: “the average Corvinus economics graduate from a bachelor’s programme earns a total (in present value) of HUF 340 million net from graduation to age 65, which is HUF 110 million (48%) more than the national average for bachelor’s economics graduates.” However, by definition of average, there are those whose career trajectories are higher and even further away from the rest, and the converse is also true, so this figure is not a guarantee of future earnings, but it is a good indicator.

In building the regression model, factors such as labour market mirror data were taken into account in addition to the Educational Authority  DPR AAE module supporting career orientation. It also showed, for example, how steeply and for how long graduates’ wages rise with age.

It is legitimate to ask why a model was built only for economic science courses? The researcher justified this distinction on the basis of the predominance of business bachelor’s programmes and the number of students. Although there is no career path model for social science students, the DPR AAE data show a net difference of HUF 145,000 per month after the seventh year of graduation. This example shows that there is a striking difference between the average income of Corvinus alumni and the national average, not only when looking at a whole career path. The differences between the wages of Corvinus students and the national average can be seen already in seven to seven and a half years: even in this interval, the gap is opening more and more in favour of Corvinus students as time goes on.

However, there are also uncertainties in the long-term estimate: changes in the labour market, changes in job profiles, and changes in shortage and popular occupations. On the other hand, the further away in time we are, the more difficult it is to determine the value of a bachelor’s programme degree alone, as everyone has the opportunity to pursue a postgraduate specialisation programme, a further education or even a second bachelor’s programme degree, to retrain themselves – which is why the model is rather conservative, underestimating expected earnings – it is then much harder to separate causes and consequences.

To summarise the limits of HUF 110 million: the wealth earned over a whole career path does not only depend on the bachelor’s programme, but also on many other factors. However, the data suggest that a bachelor’s programme degree from Corvinus can be a good starting point for this high career trajectory.

Dilemma: master’s programme or a job?

Can you find a job faster, get a higher starting salary, move up the career ladder faster if you have a master’s programme degree? A difficult question. “Average master’s salaries are higher than average salaries for students with the bachelor’s degree, but it’s not worth comparing them on a one-to-one basis because, for example, master’s graduates are further along in their careers, older, have had more opportunities to gain internships,” answered the question Tamara Huber.

It would also be exciting to quantify the value of a master’s degree, but it is not clear how we can separate out what gave the student the advantage: the bachelor’s or the master’s programme. However, this does not mean that there are no tangible benefits to completing a master’s programme. A master’s programme qualification is now a requirement for some higher positions (such as controller, financial analyst, investment expert) and a prerequisite for  doctoral programmes.

As they approach the end of secondary school, more and more of them have plans for their future, and some are already thinking about a master’s programme at the age of 18. There are many masters based on a bachelor’s programme, but there are also complementary courses, so the possibilities for combinations are almost endless.

– emphasised Tamara Huber, who knows the dilemma of studying in a master’s programme from interviews with Corvinus students in the bachelor’s programme. This is particularly the case if the student has not had any career planning until the final decision point. Fortunately, there are an increasing number of forums for students to find out more about masters courses in advance, such as websites presenting the courses (bachelor’s programmes and single-cycle programmes / master’s programmes), short summary videos or open days.

At Corvinus, Market Research is a division within Communication that has been around for about a year and a half, headed by Tamara Huber, who is also the speaker in the article. They also work closely with other areas of the University. Their main goal is decision support, to support Corvinus’ strategic goal of becoming the leading institution in Central Europe in the field of economics and social sciences in international higher education rankings by 2030 through their surveys and data analysis.