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    A blog from the Center for International Higher Education

Andrés Bernasconi: How much will I make—The relevance of labor market information
February 7, 2012 - 2:16pm

Chile’s Ministry of Education has launched a web portal offering with unprecedented detail employment and earnings data to prospective applicants to higher education. The portal, called “Mi futuro” is a searchable database that lists hundreds of degree programs, professional and technical, from Medicine to Auto Mechanic, displaying for each program of every institution of higher education in the country the following information: drop-out rate, average time to degree, average earnings of the graduates after 4 years of graduation, current tuition fees for the program, and accreditation status of the program.

Employment and earnings data are not self-reported, but culled from the data bases of the national tax revenue authority. For the cohort of interest, then—in this case, those who graduated 4 years ago—earnings are matched to the databases of graduates provided by the institutions of higher education. The privacy of the information is maintained, as the tax service issues only the average values for each program in each institution, provided there are at least 25 individuals in each program/institution’s cohort for whom earnings data are available.

This is indeed powerful information for those who find themselves in the process of choosing what to study and where. Prospective applicants can have an idea of the employment and earnings outlook for each of over 700 program/institution combinations. These do not yet comprise the total number of degree program offered in Chile, but those with largest enrollments and numbers of graduates, and therefore, potentially in most demand by future students.

For the sake of context, it may be useful to remember that Chile has one of the most market-oriented higher education systems in the world: 90% of institutions are private, close to 80% of enrollments are in private institutions of higher education, and the government is responsible for only one-third of all funding to higher education—the rest coming from private sources, chiefly tuition payments. Tuition fees in Chile are among the most expensive in the world as a proportion of GDP per capita: for 3 out of every 5 families in Chile, paying for the college of one child represents over 40% of their household income.

Therefore, an economic evaluation of the costs and benefits of a proposed course of study is not just an academic exercise for Chilean families, but an essential factor in decision making about higher education. Herein lies the importance of this new data, the publication of which was resisted by universities arguing that employment and income reflect not just quality of education, but also the social and cultural capital with which an individual is equipped, which exist and operate quite independently from the educational effectiveness of the alma mater. It would be unfair, universities complained, to evaluate or rank institutions on the basis of the labor market performance of graduates over which they do not necessarily have control.

Yet from a policy perspective, the public availability of information of this sort is a must for a market-driven higher education system. Economists argue that for competition to generate all its virtuous effects, information on both quality and price of products needs to be plentiful and accessible. In disseminating these employment and earnings data, Chile is simply being consistent with its model of higher education provision and regulation.



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