Graduates from the prestigious Group of Eight and technology universities earn more than graduates from the lesser known and regional universities over their lifetime.
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A new analysis released by the Grattan Institute found that bachelor-degree graduates from Australia's top universities earned about 6% more over a 40-year career than other graduates.
For graduates of degrees like science or commerce this equated to about $200,000 more over their career.
The data showed that bachelor degree graduates from top universities actually earned about 10% more over their lifetime, but this dropped four percentage points when social advantages were accounted for.
Go8 universities were more likely to enrol students with better previous school grades, students from private schools, and students with parents who had degrees and high profile jobs.
Therefore some of this difference could have been attributed to the fact that Go8 and technology universities enrol students who would have performed better anyway, rather than it being the effect of the university itself.
A much larger discrepancy was found in chosen course of study, with a law graduate earning $300,000 more than a science graduate over their career, and a science graduate earning up to $1 million more than a creative arts graduate.
"The report shows that when it comes to earnings, what you study matters more than where you study," Grattan Institute researcher Andrew Norton said.
"Studying engineering at any university is likely to lead to a higher salary than studying arts at a sandstone university."
Vice-Chancellor of Southern Cross University Peter Lee said he rejected any proposition that the quality of the education experience at a regional university was less than that a city university, leading to lower salary outcomes.
Professor Lee also said there were many other factors, such as gender balance and salary differences between cities and regions, that could have explained the difference.
For instance, Southern Cross University was made up of 73% female students, and females consistently earn less than males, even when allowing for career gaps for family raising.
Professor Lee also said there are large salary differences between the city and the regions, attributing for some of the difference.
"A lawyer in a big city law firm does earn more than a lawyer practising in a smaller firm in the regions," he said.
Higher education analyst at the University of Melbourne Geoff Sharrock said the report's most important finding was that a student's field of study is far more important than the university itself where earnings are concerned.
"Some fields pay much better than others, regardless of which university conferred the degree.
"This suggests that students should choose their field of interest and ability first, and their institution second.
"In doing so, they may also factor in price differences and how much debt risk they are prepared to take on," Dr Sharrock said.