In Israel, university graduates earn more than college graduates, study shows
Bank of Israel report from 2008-2015 says college graduates still do see ‘a solid return’ on their studies compared to those with only high school degrees
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
A new study by the Bank of Israel has found that all else being equal, the gross annual wage of university graduates in Israel was about 10 percent higher between 2008 and 2015 than the wage of graduates from local public colleges.
Graduates of private colleges — which are not funded by the government — had wages 6% to 7% percent higher than those of graduates of public colleges.
The ranking of annual wages between types of institution held true even after adjusting for gender, nationality, and parental income, the study showed.
The rate of Israelis with a higher education has almost tripled since the beginning of the 1990s, and Israel is currently placed very high in the OECD in terms of the percentage of higher education graduates in the population.
This is due, among other things, to the rapid expansion of the college system, both public or government-funded and private or unfunded, that has been in use since the beginning of the 1990s. These colleges — excluding the colleges that teach education — currently hold half of the nation’s bachelor degree students.
The Bank of Israel study looked at the wage premium that graduates got after studying at the various types of institutions in Israel. The study examined data on all those born between 1978 and 1985, and relied on a variety of demographic and socioeconomic characteristics of those people and their families, their matriculation and psychometric scores, their academic education, and their gross wages between 2008 and 2015.
‘Solid returns’ for public college grads as well
While the study found the wage premium on public college degrees to be lower than those from universities and private colleges, it also found that bachelor degree earners from public colleges were still better off than people who only had high school matriculation certificates, indicating that “studies at the public colleges also generate a solid return,” the study said.
The wages of social science and business administration graduates from the public colleges are about 30 percent higher than the wages of those who have only a high school degree, and the gap is 80 percent for computer science graduates.
The findings also show that the types of institute of higher education are ranked differently in terms of wage for each field of study. The yearly and hourly wages of graduates in engineering and the paramedical studies are higher if they studied at universities, while in business administration, the wages of college graduates are higher, the study showed.