Presenter: Rosario Scandurra, Universitat Pompeu Fabra – Barcelona School of Management

Discussant: Kevin Schönholzer, Università della Svizzera Italiana 

Abstract: Despite widespread assumptions that higher university costs reflect better graduate outcomes, this study finds consistently weak correlations between university expenditures and employability metrics. Using a comprehensive Monte Carlo simulation and global sensitivity analysis, we assess whether various input parameters, including tuition fees, living expenses, housing costs, and different measures of employability, influence the correlation between overall university cost and QS employability ranking. However, heterogeneity analysis reveals that the relationship becomes stronger for Anglophone higher education systems, showing that in highly hierarchical stratified higher education system. The results reveal a correlation ranging between r=-0.03 and r=0.07. Heterogeneity analysis focusing on Anglophone universities report a strong relationship ranging between public funding and employability (r=-0.012) metrics European universities show that a higher share of public funding in university budgets does not immediately translate into better employability outcomes. This suggests that neither increased student expenditures nor greater public intervention guarantees superior graduate labour market performance. Sensitivity analyses, conducted through Random Forest feature importance, Sobol’ variance decomposition, and Simulation Decomposition (SimDec), show that methodological choices in constructing employability metrics, including handling missing data, weighting components, and selecting or excluding indicators, are the primary drivers of almost 70% of the variability in the observed correlation. In contrast, tuition fees, living expenses, housing costs, and public funding levels have minimal impact. The findings challenge common widespread assumptions that resource-intensive education directly translates into better labour market outcomes. The results highlight critical measurement validity issues in university rankings and suggest that higher education employability metrics depend more on methodological choices than substantive differences in educational investment. Current employability metrics may mislead prospective student choice and private and public investment in higher education: a standardization of measurement approaches is strongly needed.

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