Overseas Graduates Paid More?

The following is a press statement from Jobstreet.com with regards to a study conducted which showed that graduates of overseas universities fair better than local grads in salary scale. I must say, the results didn't come as too much of a surprise, although I'd be keen to obtain the methodology and sample data for further analysis.

But before you read on, please bear in mind that these studies provide the "generalised" results i.e., there are always exceptions. You will find plenty of local graduates who are extremely competent and who may be making a lot of money in wages in contrast to some of the overseas graduates. However, as a whole, that may not be the case.

(Just to also point out that while was I an employer, more than 80% of my employees were hired as fresh graduates, of whom, the overwhelming majority of them were local graduates. While it was tough picking out quality graduates, they were certainly there if you look hard enough.)

Kian Ming has also written his views on the often heated subject of "local vs foreign graduates" here.

Here's the press release from Jobstreet:

In a 2008 study of more than 100,000 JobStreet.com members in Malaysia who hold a Bachelors degree and are currently working in the country, JobStreet.com has observed that graduates from overseas universities on average earn about 12 percent more than local graduates.

The salary gap is most apparent among those with up to five years of work experience.

Overseas graduates are earning a significant 20 percent more than their local counterparts. Even after 10 years or more of work experience, the gap is still more than 10 percent.

In terms of job specialization, the biggest salary gap between overseas and local graduates is in business-related fields such as management, economics, finance and marketing where overseas graduates earn about 15 percent more than local graduates.

In the engineering and IT/Computer fields, salaries are about 11 percent higher for overseas graduates.

In a similar study among 20,000 JobStreet.com members in Singapore, it was observed that there is no significant difference between the salaries of graduates from local Singaporean universities and overseas universities even after 5 or 10 years of work experience.

In conclusion, a Malaysian who graduates from a local Malaysian university earns on average a lower salary than those who graduate from an overseas university. There were no significant difference in salaries that exists among graduates in Singapore.

The final conclusion is equally unsurprising, but its a new angle to look at for it certainly demonstrates the disparity between our local versus Singapore's universities.

Cost-Benefit of Overseas Education

Many parents today save up a lot of money for their children to pursue an overseas education. More than a few would have asked, is it all worth it? Well, someone actually did a fairly detailed cost-benefit analysis on the issue using a simple financial model (with assumptions of course). Check out Ahmad Ismail's analysis on the issue here.

Basically, the conclusion appears to be that "there is nearly no economic benefit to sending children abroad as opposed to sending them to local universities". Unfortunately, I haven't the time this 2 days to do a rigourous study of overseas education and its cost and benefits, I'll give my 2-sen on my personal views with regards to the issue.

The most significant global phenomenon of tertiary education for the past decade or so, has been the "democratisation" of degree-level education. That is sort of a polite way of saying "everybody also can get a degree from somewhere or other". We have argued that the focus on the quantity of universities and university graduates has reduced the quality of degree level education in Malaysia. However, it is not a phenomenon unique to Malaysia.

To varying degrees (pardon the pun ;)), it is the same for Australia, United Kingdom and the United States. The global result is hence the overall decline in the average quality of degree graduates. For example, a student who would possibly have qualified only for a diploma in the past, would have no problems securing a degree certification today.

Viewed from the above context (which is different from the approach taken by Ahmad), the argument that an overseas education may not be economically more beneficial than a local university holds a certain level of merit. My experience in recruitment has certainly taught me that local graduates are not uniformly weaker than foreign ones, as often generalised (and I would say, generalised wrongly). There are graduates from foreign universities who I would not hire, even if I'm offered a 3-month free trial, just as I wouldn't some local graduates.

At the same time, there are many local graduates who I would happily hire, and rate equal or better than most "overseas" graduates. Hence, in this regard, my personal experience 'sort of' adds justification to Ahmad's hypothesis.

However, I believe that there are exceptions. The exceptions are when these overseas graduates originates from the top universities overseas. Whether justified or otherwise, the market rates graduates from say, Yale or Cambridge much higher than those from the average (for lack of a better descriptive term), universities. I must admit that I have personally benefited from such treatment having graduated from Oxford. Whether its fair, justifiable or otherwise, my chosen alma mater eased my entry into on of the top global consulting companies and indirectly helped my start up business due to better chances of seeking appointments with key client managers. Even today, in politics, I'm being viewed a little differently, whether I like it or not.

Hence, in all likelihood (it's still a long time yet) for my own daughter, I'll happily (by hook or by crook) send her overseas if she gains entry into some of the top schools in the world, knowing that she will benefit directly or indirectly from such an education. However, if she's say, an average student, local universities or possibly the insitutions down south, may be the preferred choices.

There is however, a caveat to the above argument. The choice between a local public university as opposed to an overseas university also presupposes that the former is an applicable option, particularly for non-bumiputeras. If access to local public universities isn't a reliable option due to uncertainty of entry requirements as well as course allocation, then the students have no choice but to secure their tertiary education either at local private unversities like Multimedia University or via twinned programmes with local private colleges or directly to overseas institutions.