Social return and quality of HEI: wage effect on small firms

Abstract

providing an education with the highest possible quality, making efficient use of resources, is a permanent demand for publicly funded universities. It is known that graduates with university studies receive a private benefit (wage), although estimates of the social benefit of higher education are still lacking, that is, the positive effects that university students create in other workers. In this regard, the aim of this paper is to measure the social return of higher education, estimating the effect on the wage of managers and workers, associated with the job of university graduates hired in small and medium-sized companies. The analysis was carried out with data from Mexico, combining official figures from the Government Quality Survey, which reports satisfaction with university education, and the Productivity Survey, which describes wages and schooling, among others. The sample was formed with small and medium enterprises. The abundant information available allowed us to use instrumental variables and a two-stage regression. It was confirmed that tertiary education has a positive social effect and that this effect is greater in regions with higher quality HEIs. By broadening the perspective towards the quality of HEIs and social return, universities can demonstrate that their impact exceeds their graduates, reaching workers without university studies through a positive salary effect.