A Cost-Benefit Analysis of High-Quality University Education in Brazil

With a strictly economic view, this study estimates the productivity differential of graduates from three of the best universities in Brazil (USP, Unicamp, and Unesp) compared to professionals trained by other higher education institutions. We performed a cost-benefit analysis comparing the value of the aggregate productivity differential with the expenditures incurred. We compared the productivity levels of over 138,000 graduates of the three universities between 2005 and 2015 with more than 13 million professionals in the labor market in 2018. The results indicate that a person with a degree in these universities had 62% higher productivity levels (gross differential). When we control for the personal characteristics (gender, age) and the quality of employment obtained (sector of activity, tenure, location, and specific occupation), the difference reduces to 24% (net differential). For jobs in the private sector, the net difference is 30%. We concluded that the effects of high-quality teaching alone account for 81.5% of the costs involved in the operation of the three universities.