Students’ expectations about earnings and employment and the experience of recent university graduates: Evidence from Cyprus

The employability of university graduates constitutes a major policy concern in both developed and developing nations. In this context, the present study uses self-reported data to compare the earnings and employment expectations of university students, and the realised earnings and employment paths of recent graduates. The sample consisted of 476 individuals (243 students and 233 graduates of the University of Cyprus). The analysis points to both differences and similarities in the effect of different variables on (a) the probability of employment for graduates and the probability of expected employment for students, and (b) the conditional salary of graduates and the conditional expected salary of students. The completion of postgraduate studies, the area of family residence and the department of study are the key factors affecting the graduates’ employment probability, while the students’ probability of expected employment is determined differently, namely by characteristics such as secondary education performance and studies in the business administration department. Gender and family income are among the main determinants of both the graduates’ actual earnings and the students’ expected earnings, with women earning or expecting to earn less than men, and graduates/students with higher family incomes earning or anticipating to earn more than their lower income counterparts. The findings are compared to those of similar studies in other countries.

► We compare the earnings and employment expectations of students to actual data on graduates.
► Gender and family income are main determinants of both actual and expected earnings.
► Women and lower income individuals have lower expectations and realisations in the labour market.
► Students may underestimate/overestimate the effect of some variables on earnings/employment.
► Students are generally realistic in their expectations.