Empirical Analysis of Starting Salaries of College Graduates based on Their University-Industry Cooperation Activities

2.1 University-Industry Cooperation Activities in University Life

The study uses the definitions of university-industry cooperation activities under the Industrial Technology Innovation Promotion Act. The act defines university-industry cooperation activities in three ways. First, it is to develop and educate students to become productive members of society and helps meet human resource development requirements in various industries. Second, it is to conduct R&D to create and diffuse new knowledge and innovation to society. Lastly, it is to provide technology transfer and consultation. In general, university-industry cooperation is a strategic partnership between universities and firms to identify new market opportunities through the mutual exchange of human resources, knowledge, and equipment. University-industry cooperation activities for students include on-site practical training through education specific for developing practical skills for jobs, capstone design courses, and university-industry joint seminars and conferences (MOE, 2020).

2.2 Factors Afftecting the Starting Salary of College Graduates

Prior research has made efforts to theorize, empirically analyze, and examine various factors affecting college graduates' starting salaries, as wage determination has emerged as a key concern in the labor market and industries. For example, Lee and Hong (2008) examined human characteristics, household characteristics, job attributes, and workplace attributes and their effect on wage determination and found that gender, age, educational background, gross household income in the previous year, higher grade professional and managerial occupations, job tenure, and job commitment to be significantly correlated to wage determination.

In addition, Kwon and Kim (2021) also analyzed the individual and university-level factors that influence the wage levels of college graduates. The authors found that gender, age, parent assets, the field of study, grade point average (GPA), and language experience were all significant in terms of individual factors, and university location, types of universities and financial support amount per student were significant in terms of university-level factors. The results show that factors affecting college graduates' wage levels are diverse, from individual to social-economic factors. Therefore, this study explains the relationship between students' university-industry cooperation activities and their starting salaries.

2.3 Research Gap

So far, there has been relatively little research on university-industry cooperation activities and starting salaries of college graduates. However, studies have suggested that university-industry cooperation activities positively affect the employment rate and the wage level of college graduates. For example, Park, Park and Son (2015) found that university-level factors partially affect the wage levels of college graduates. In addition, Cho (2018) stated that the quality of on-the-job training and university-industry cooperation activities are highly correlated with students' employment rate and school loyalty.

However, one of the limitations of past research was that they did not conduct a trend analysis of how university-industry cooperation activities affect the starting salaries of college graduates using multi-year data set. Therefore, after examining the limitations of past studies, this study uses a multi-year data set from GOMS to conduct a statistical analysis on college graduates and their starting salary. By focusing on college graduates and their starting salaries, the study can overcome the discrepancies in the student's college life and wage levels.

3.1 Variable Settings

The study defines students' university-industry cooperation activities during their college life as courses related to career development and employment as well as on-site practical training sessions and conducts an empirical analysis on the starting salaries of college graduates. The study focuses on college graduates with full-time employment and uses the average monthly salary as the variable for starting salaries.

Table 1 shows the research analysis framework regarding the relationship between university-industry cooperation activities of college graduates during their college life and their starting salaries. The study uses two independent variables (IVs). First, IV is a binary variable that describes the participation status of courses such as on-site training for college graduates during their college life. The second IV is also a binary variable that describes the level of job search support. The original variable was coded as an ordinal variable (a 5-point Likert scale that ranged from Extremely helpful (1) to Not-at-all helpful). The study recorded this variable into a binary variable using extremely helpful and somewhat helpful as helpful, and Not-at-all helpful and slightly unhelpful as not helpful.

Table 1.

Analysis Framework and Variable Composition

3.2 Research Data

The study uses Graduates Occupational Mobility Survey GOMS questionnaire results, a time-series data that includes wage levels of college graduates in South Korea. GOMS questionnaire surveys college graduates with a two-year college degree or higher every year and is conducted six months after graduation. Therefore, the study collected the starting salary of college graduates from 2011 to 2019.

4.1 Descriptive Statistics

The study conducted a basic descriptive statistic of the dataset and found a total of 88,037 college graduates from 2011-2019, of which 55% (49,193) were male and 45% (38,844). Therefore, the average number of respondents per year was 9,781 college graduates. The breakdown of the respondent is shown in Table 2.

Table 2.

Number of gender respondents per year(person)

The study examined the data according to the school type and found that 65% of all college graduates who participated in the GOMS questionnaire from 2011 to 2019 were four-year university graduates. Only 26% of the respondents graduated from junior colleges. In addition, it was surprising that 77% of the respondents graduated from private universities, compared to national universities (22%) and public universities (1%). Also, most college graduates went to schools in Gyeongsang and Gyeonggi provinces, with 23,372 and 20,755 respondents, respectively. There was a total of 18,652 college graduates from universities in Seoul. Lastly, 27,335 graduates majored in engineering, while 19,561 and 10,330 majored in social science and natural sciences, respectively.

Table 3 shows the starting salaries of college graduates from 2011 to 2019. The average starting salary of the respondents from 2011 to 2019 is about ￦2,298,000. The highest starting salary (average) was in 2018, and the lowest was in 2012. Furthermore, the study found that most of the respondents were employed in small-and-medium enterprises (SMEs) with 10 to 29 employees, but there were also college graduates employed at big firms.

Table 3.

The Annual Starting Salary of College Graduates (KRW 10,000) from 2011 to 2019

4.2 Comparative Analysis of Starting Salary of College Graduates and Their University-Industry Cooperation Activities

4.2.1 Analysis Results of University-Industry Cooperation Activities

Before conducting the comparative analysis, the study found that 45% of the college graduates over the nine years participated in university-industry cooperation activities such as on-site practical training during their college life. College graduates in 2017 showed the highest percentage at 48%, and in 2019 had the lowest at 40%. Concerning whether the university-industry cooperation activities helped find a job after graduation, 74%, on average, of college graduates found it to be helpful. The study believes that analyzing the level of helpfulness of the university-industry cooperation activities can provide not only the educational level of the university but also the college graduates' UIC participation. Table 4 shows the questionnaire results of college graduates and their participation in university-industry cooperation activities from 2011 to 2019.

Table 4.

Current status of college graduates in university-industry cooperation activities

4.2.2 Relationship Between Starting Salary of College Graduates and Their Participation in UIC Activities

The study conducted a t-test to examine the relationship between college graduates' starting salary and their participation in UIC activities during their college life. Table 5 shows the results of the analysis. The result tells that the starting salary of college graduates who participated in UIC activities was statistically lower than those who did not participate in UIC activities. The result can be understood that participating in UIC activities alone does not affect or even can negatively affect the starting salary. The study assumes that the starting salaries for college graduates participating in the UIC activities were lower because the on-site practical training was centered around small and medium enterprises (SMEs).

Table 5.

Statistical Result of Average Starting Salary of College Graduates Grouped by Their UIC Activity Participation(KRW 10,000)

Furthermore, the study conducted a t-test analysis of college graduates who participated in UIC activities and whether they thought the UIC activities helped them during their job search process. The results show that college graduates who thought the UIC activities were helpful during their job search process earned a higher starting salary than those who did not think that the UIC activities were helpful during their job search process. Table 6 shows the t-test results in detail.

Table 6.

Statistical Result of Average Starting Salary of College Graduates and Their Level of Helpfuleness in terms of Job Searchinga

From the analysis results, it can be understood that the UIC activities do not increase the starting salary of college graduates. In addition, the results show a difference in starting salaries of college graduates depending on how active the college graduates participated in UIC activities and whether the college graduates took advantage of participating in such activities.

4.3 Discussion

The analysis results are summarized as follows. First, the empirical analysis results explain that college graduates have utilized their opportunities during college life and participated in various UIC activities. The study found, on average, 45% of the total college graduates from 2011 to 2019 have participated in UIC activities such as on-site practical training in SMEs. It was also interesting that the participation rate did not greatly increase or decrease from the average in the nine years.

Second, participating in UIC activities alone does not increase the starting salaries of college graduates, as college graduates who participated in UIC activities during their college life showed similar or even lower starting salary ranges than those who did not participate.

Lastly, participating in UIC activities showed no or even a negative impact on the starting salary. However, college graduates who actively participated and got the most out of their opportunity and found the UIC activities helpful in their job search process showed a higher starting salary than those who did not believe UIC activities were helpful in their job search.