Graduates in the Labour Market: Does Socio-economic Background Have an Impact? The Case of Hungary

Abstract

This article looks at the status attainment process of young Hungarian graduates, devoting special attention to the impact of social origin, defined as the education and occupation of parents. The authors' estimates show that graduates from high status families enjoy notable advantages in the labour market, even when type of education, field of study, and a range of labour market experience factors are held constant. The greatest wage-premium for coming from a 'good' family is measured for men, occurring four-to-five years after graduation. Patterns of status inheritance are found to be gender-dependent, with women being more influenced by their social background at earlier phases of their careers. The authors argue that the substantial growth in the number of graduates and the increasing variety of jobs they occupy contribute to a social-selection process, moving further up from the educational ladder to the labour market. The authors describe possible mechanisms driving the direct inheritance of social advantages, but further research is needed to explore them in detail.