Chunmian Ge

Abstract

Investigating the Determinants of Starting Salary of IT Graduates

The starting salary of a fresh graduate is considered a potential indicator of career advancement. Yet few studies have examined the determinants of starting salaries of information technology (IT) graduates. Further, existing studies have focused on how demographics affect either the salary or the kind of job the graduate enters into, but rarely both. In this paper, we explore both and examine if entry into an IT job mediates the effects of demographics on the starting salaries of fresh IT graduates. Our model is tested using data from annual surveys of undergraduate students majoring in IT at a large public university in Singapore over a 5-year period. We find that gender and foreigner status influence both starting salary and fresh graduates’ entry into an IT vs. non IT job. Further, the effect of gender on the starting salaries of IT graduates is partially mediated by their entry into an IT job. In other words, part of the reason for a gender difference in starting salary could be attributed to female IT majors being less likely to enter IT jobs upon graduation than their male counterparts. On the other hand, foreign IT graduates are more likely to enter IT jobs, yet their starting salaries are found to be lower than local graduates. The implications of the results for research and practice are discussed.

Chunmian Ge South China University of Technology Atreyi Kankanhalli National University of Singapore Ke-Wei Huang National University of Singapore

Keywords: Starting Salary, IT Job Entry, Gender, Foreigner Status, Fresh IT Graduate ACM Categories: H.1.2, K.3.2. General Terms: Management

Introduction Most information technology (IT) students and professionals consider salary as an important career motivator. Particularly, the topic of starting salary has drawn much attention since it is a major concern for fresh graduates and their educational institutions. For universities or academic programs, the average starting salary of their graduates is typically used as a major criterion in their ranking and in calculating their return on education (PayScale 2013). From students’ viewpoint, an article from the Wall Street Journal (Needleman 2008) highlights that the salaries of graduates from all types of schools increase at almost the same rate throughout ten or more years of their career. Thus, the starting salary of a graduate appears salient for his or her career advancement, making it important to explore its determinants. However, existing literature has mainly focused on the salaries of IT professionals, with relatively few studies (Fang et al. 2004; Sandvig et al. 2005) examining the determinants of the starting salaries of fresh IT graduates. In the literature, gender (e.g.,

Acknowledgment We gratefully acknowledge support from National Natural Science Foundation of China, Grant 71503084, and Singapore Ministry of Education, Academic Research Fund, Grant R-253-000-091-112 and Grant R-253-000-103-112, and Guangdong Soft Science Research Project 2014A070704005.

The DATA BASE for Advances in Information Systems

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Volume 46, Number 4, November 2015

Igbaria and Baroudi 1995) and foreigner status (e.g., Mithas and Lucas 2010) have been suggested as key demographic antecedents of salary.

(2) the mediating effects of IT job entry on the relationships between the demographic factors and starting salaries of fresh IT graduates. This is accomplished through a longitudinal, 5-year survey of the first full-time employment of undergraduate students completing an IT major in a large public university. The findings add to research in this area and also provide implications for practice, as will be discussed subsequently.

Indeed, gender has been examined as a determinant of employee salaries for several decades now. Gender salary gap refers to the salary difference between comparable males and females in the workforce. This topic has been widely studied by researchers from various academic disciplines (e.g., Goldin and Polachek 1987; Macpherson and Hirsch 1995; O’Neill 2003) and continues to draw research interest (e.g., Fortin 2008; Grove et al. 2011) as professions and circumstances change. Several prior studies examining fresh graduates of all majors have suggested that gender influences earnings, with male college graduates, on average, earning more than female graduates (e.g., Grove et al. 2011; Loury 1996; Weinberger 1998). However, for the IT industry, the findings have been mixed and there is no consensus on the existence of a gender salary gap, with some studies (e.g., Nezlek and DeHondt 2011) supporting it, while others (e.g., Fang et al. 2004) did not.

Literature Review This section reviews the relevant literature related to the effects of the two demographic variables on salary and starting salary, particularly for IT graduates and professionals. It also reviews studies on IT job preference and entry for IT students and professionals. The aim is to identify the gaps in the literature that this study seeks to address as well as position this research with respect to the existing studies. Gender and Salary

Foreigner status is another key demographic that may influence graduates’ starting salaries. Foreigner status implies that the person is not a citizen of the country he or she is staying in. While there is a lack of information systems (IS) studies examining the starting salaries of foreign students, Mithas and Lucas (2010) found that foreign IT workers received a salary premium compared to local IT workers in the U.S. This contradicts the belief that foreign workers are cheap substitutes for local workers (Claburn 2013) and also indicates mixed views in this area.

Earning differences between men and women have drawn substantial research interest. A seminal study by Becker (1985) posited that married women obtain lower hourly earnings than married men, even with the same human capital. The basis for this argument was that married women may have less financial need for work outside the home than men, resulting in lower salary. This is attributed to activities such as childcare and housework that are traditionally assigned to women and are often incompatible with a paid work role (Becker 1985; Bertrand et al. 2010). Further, women who are thinking of childrearing in the future may earn less even before they have children due to investing less in their human capital e.g., training, bargaining, job search (Chevalier 2007; Goldin and Polachek 1987). While gender differences may be reducing over time, studies (e.g., Fortin 2008; Grove et al. 2011) still show that women with families often find they must reduce their commitment to paid work. At the same time, employees are often expected to exhibit strong commitment to their organizations, such as working long hours and relocating to other cities when asked (Trauth 2002). Thus, gender roles could lead to women’s disadvantage in terms of both salary and career development (Blau and DeVaro 2007; Lyness and Heilman 2006; Yap and Konrad 2009).

Further, prior research did not consider if entering an IT job plays a role in the relationship between demographics and starting salaries of IT majors. This could be the case because IT majors with varying demographics may have different likelihood of entering IT jobs (Trauth et al. 2009) and, on average, the starting salary of an IT job differs from that of a non-IT job (Adams 2013). This is also consistent with the suggestion that salary difference in terms of demographics such as gender may be partly due to individual differences in career preferences and entry (Weinberger 1998). Given the mixed findings about demographic effects in the literature, there is a need to study the intervening mechanisms behind how these factors influence the starting salary of fresh IT graduates, such as through their entry into IT vs. non-IT jobs. Yet, there is a lack of research on such a mediating mechanism. Thus, the goal of this study is to examine: (1) the direct effects of two demographic factors (i.e., gender and foreigner status) on the starting salaries and IT job entry of IT fresh graduates;


Nevertheless, the findings about the relationship between gender and salary have been mixed for the IT industry. On one hand, several studies reported that gender influences salary. For example, Bretts (1993) observed a salary gap between men and women based on a survey of demographics, salary, and job satisfaction for IS jobs. The article also

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suggested that there was a ‘glass ceiling’ that kept women in mid-level jobs. Using data gathered by the Society of Information Management, Truman and Baroudi (1994) found that women received lower salaries than men in managerial IS positions even when job level, age, education, and work experience were controlled for. Similarly, Tan and Igbaria (1994) found that salary varied by gender in many IT jobs based on Singapore data. More recently, using data from the Current Population Survey (CPS), Nezlek and DeHondt (2011) observed a persistent gender earnings gap for IS positions in the U.S. for the period 1991 through 2009.

They argue that this is because foreign employees had limited employment duration and received fewer inducements (e.g., pay, benefit, career development opportunities) from the organization. As a result, they did not reciprocate the same level of performance or organizational citizenship behavior as local workers. Consequently, one of the concerns raised regarding foreign IT workers is that employers may exploit them as a source of cheap labor, which implies that they would receive lower salaries than local workers. For example, Singh (2003) observed that the cost of hiring an Indian high-tech worker in the U.S. is lower than hiring an American worker. An empirical study by Matloff (2003) concluded that the motivation for hiring 1 computer-related H-1Bs in the U.S. was primarily a desire for cheap, compliant labor since an H-1B holder couldn’t move around freely in the open market to obtain the best salary, nor could the holder negotiate a better salary from his/her current employer by threatening to leave.

However, there are also prior IS studies reporting that gender is not related to salary. For instance, Ang et al. (2002) analysed archival salary data from 1,576 IT professionals in Singapore and found that gender as a control variable did not influence salary. Based on data from 85 IT certification programs in the U.S., Quan et al. (2007) reported that gender was not significantly associated with the salary of IT workers. It is important to note though, that the regressions were run separately for different job functions and industries, which could influence their results. Regarding gender’s effect on starting salaries, Fang et al. (2004) observed that there was no gender difference in the starting salaries of management information systems (MIS) graduates, using survey data from 213 subjects in three U.S. universities. Yet, the results were obtained by comparing gender groups without controlling for other variables. Also, the data set covered one year. Another study by Sandvig et al. (2005) found no significant relationship between gender and starting salary based on placement data from 126 MIS graduates at a public university. However, the sample size was relatively small, with 18 observations per year on average.

However, several empirical studies do not support the popular belief that foreign IT workers are cheap substitutes for local IT workers. For example, Tan and Igbaria (1994) found that non-Singaporeans earn S$700/month (~US$620) more than Singaporeans in the IT industry. They also noted that the largest salary gap was between non-Singaporean (with S$6,530 monthly salary) and Singaporean IT managers (with S$4,323 monthly salary). More recently, Mithas and Lucas (2010) reported that foreign IT professionals earn a salary premium as compared to U.S. citizens after controlling for human capital attributes, including education level, IT experience, as well as total work experience. Yet, existing studies are unable to control for the unobservable skills and knowledge of workers. For example, controlling for the education level of subjects may not be effective as education quality may vary for universities within and outside the U.S.

Our study differs from and extends the literature in several ways. First, we focused on demographic effects on starting salaries of fresh IT graduates, which is an under-studied area. Second, our study utilized longitudinal survey data over 5 years, which could provide a more robust analysis in response to our research questions. Last, this study is unique in exploring IT job entry as a potential mediating variable between demographic factors and the starting salaries of IT graduates.

Our study contributes to this line of research as our subjects are from the same faculty in the same university, which could control for education quality. Further, as explained in the Method and Data section, we control for their academic ability. This study also adds to the literature since there is a lack of research examining the starting salaries of foreign vs. local fresh IT graduates.

Foreign IT Workers and Salary The issue of foreign IT workers has drawn considerable research attention. For example, Ang et al. (2003) found that foreign IT workers in Singapore had less positive work perceptions and exhibited lower organizational citizenship behavior and performance as compared to local employees who held the same jobs and performed the same tasks.


1

The H-1B is a non-immigrant and temporal work visa in the United States. It allows U.S. employers to temporarily employ foreign workers in specialty occupations. Most of the foreign IT workers in the U.S. are H-1B holders.

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IT Jobs for IT Graduates Gender

Prior literature has suggested that salary differences in terms of demographics such as gender may also be due to individual differences in career preferences (Weinberger 1998). For instance, anecdotal evidence suggests that women while choosing jobs place greater importance on their value to society and personal interactions, and less importance on money and prestige than men (Fortin 2008). For IT careers, too, Kuhn and Joshi (2009) observed gender differences in job attribute preferences among undergraduate IT students. One of their findings was that female students valued work-life balance and social interaction more than males in their job preference. In general, previous literature reports that there is gender heterogeneity of job preferences (Booth 2009; Croson and Gneezy 2009).

H3 H1 IT Job Entry H5

Starting Salary H4

Foreigner Status

Figure 1. Research Model IT jobs require knowledge of complex and often abstract, technical concepts such as data modeling, database design, process engineering, information architectures, network design and software design theory (Feeny and Willcocks 1998; Slaughter et al. 2007). Such knowledge and skills are generally first obtained during students’ undergraduate education in IT-related fields, such as computer science and MIS. The human capital developed during the training in computer science and MIS subjects is mainly valuable for IT jobs (Slaughter et al. 2007). Considering the fit between their human capital and IT job requirements, if IT majors enter IT jobs upon graduation, their knowledge acquired in university should be valuable for their employers. In contrast, if they work in non-IT jobs, their undergraduate training may not be as useful for their employers. Therefore, employers for IT jobs should be willing to offer a higher salary to an IT graduate than employers for non-IT jobs, as per the human capital perspective (Becker 1993).

Trauth et al. (2012) also noted that IT majors with varying demographics may have different preference and likelihood of entering IT jobs. While an IT job may offer various advantages such as a casual or flexible work environment e.g., a jeans and T-shirt culture, these jobs are also notorious for their stressful nature, long working hours, and need to continuously update skills due to rapidly-changing technologies (WetFeet 2009). Therefore, some IT students may prefer nonIT jobs, which could garner them lower salaries since their IT skills and knowledge are expected to be more suited for and valued in IT jobs. This is because the human capital developed during the training for an IT major is largely valuable for IT jobs (Slaughter et al. 2007). Consequently, salary variance may not only result from demographics, but also from IT graduates’ entry into IT vs. non-IT jobs. However, prior research did not consider if entering an IT vs. non-IT job plays a role in the relationship between demographics and starting salaries of IT graduates. Given the mixed findings about direct demographic effects in the literature, there is a need to study the intervening mechanisms behind how these factors influence the starting salaries of fresh IT graduates. Therefore, in this study, we intend to explore if IT job entry plays a mediating role in the relationship between gender, foreigner status, and fresh IT graduates’ starting salary.

In other words, IT graduates’ IT job entry may affect their starting salaries. According to a survey of IT graduates from three universities in the U.S., these entry-level job seekers believe that IT oriented firms (IT consultancies and IT vendors) provide more opportunities for compensation and advancement than non-IT oriented firms (Thatcher et al. 2012). Also, a 2013 salary survey conducted by the National Association of Colleges and Employers reported that, among computer science majors, those who enter the information sector earn the most as compared to 2 those who join other sectors (Adams 2013). Therefore, we hypothesize that: H1.The starting salaries of fresh IT graduates will be higher if they enter IT jobs rather than non-IT jobs as their first full-time employment

Hypotheses Development Our research model is shown in Figure 1. As discussed above and elaborated in our hypotheses below, we expect IT job entry to mediate the relationships between gender, foreigner status and the starting salaries of fresh IT graduates. Direct effects of the two demographic variables are also proposed.


H2

2

Note that this is based on a comparison of average starting salary, without controlling for other variables that may also affect the starting salary.

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At the same time, IT employers’ attitudes towards female newcomers could also affect the likelihood of female graduates’ entry into IT jobs. Prior research has found that male IT newcomers were expected to perform better, reported a higher quality of work relationships, and felt more empowered than female IT newcomers (Chen and Klimoski 2003). This suggests that IT employers may prefer male newcomers due to past experience or socially constructed biases. IT employers may also prefer male applicants because they perceive that the nature of IT jobs and culture fits male workers better 5 than women (Chao and Rones 2007) . Therefore, due to the effects both from the graduate and employer sides, we expect that:

The Effect of Gender As discussed previously, women in general may spend less time on paid work than men due to a lower financial need or a socially expected role of having to undertake house-hold activities (e.g., Bertrand et al. 2010). This can lead to less working hours (Grove et al. 2011) 3 and thus lower remuneration for women than men. Employers may harbor such beliefs when hiring a female IT graduate, where they expect women employees to work fewer hours and accordingly pay them a lower starting salary than male hires. Also, employers may expect that female IT workers are more likely to leave their job (Joseph et al. 2012) and thus are more willing to pay males higher salaries than women4.

H3. Female IT graduates are less likely to enter an IT job than their male counterparts, for their first full-time employment

Also, women are reported to value the non-monetary job attributes of their expected future job more while men place more importance on wealth (Fortin 2008; Grove et al. 2011). This implies that women may have less motivation than men to negotiate a higher salary with their employers. These arguments suggest that a lower starting salary will be offered to female IT graduates than males, other factors being equal. Therefore, we hypothesize that:

The Effect of Foreigner Status As discussed previously, foreigners in computerrelated occupations generally lack the bargaining power to negotiate a better salary from their employers because of higher switching costs due to visa policies (e.g., Matloff 2003). 6 Thus, employers may exploit them as a source of cheap labor. Ang et al. (2003) found that foreign IT employees were offered limited employment duration and received fewer inducements (e.g., pay, benefit, and career development opportunities) from the organization than local employees. Similarly, in the case of fresh IT graduates, employers may realize this issue and offer lower starting salaries to foreigners as compared to locals. Therefore, we expect that, after controlling for other factors:

H2. The starting salaries of female IT graduates will be lower than their male counterparts According to the social constructionist perspective, individuals’ perceptions are socially constructed, accepted, and internalized (Trauth et al. 2012). Thus, men are socially perceived to be well-suited to perform stereotypically masculine roles whereas women are viewed to fit well in stereotypically feminine roles. The IT profession is often considered to be male-dominated and possessing a masculine culture, as technology is inherently masculine in nature (Wilson 2004). It is, thus, expected that females will be less likely to enter an IT job compared to males due to these social norms. Additionally, female students were found to have lower outcome expectations in terms of how satisfied they think they would be in an IT career (Heinze and Hu 2009). The stereotype of the average computer worker as an introverted male (McConnell 2003) would likely affect outcome expectations and attitudes towards IT jobs (Heinze and Hu 2009), and in turn lead to fewer female IT graduates entering IT jobs.

H4. The starting salaries of foreign IT graduates will be lower than their local counterparts Foreign workers from several large developing countries have been playing an important role in the IT industries of developed countries. According to Park (2007), about 60% of H-1B visas in the U.S. are issued to the IT industry. Nevertheless, large IT companies such as Microsoft have still argued that they can’t find enough qualified local workers and called for the U.S. government to loosen its visa

5

This does not imply that the authors condone such practices, but recognize that they exist.

3

In their sample of MBA graduates, females reported working about one hour less per week than males, and the difference was statistically significant. 4 This does not imply that the authors condone such practices, but recognize that they exist.


6

The restriction on work visas is a global issue. Many developed countries require foreign workers to stay employed. Losing a job is usually associated with losing one’s legal residential status (e.g., in the U.S. and Singapore).

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policies to allow the hiring of more foreigners (CNET 2008). The shortage of local IT workers may be due to the salary levels. A recent study in the U.S. shows that salaries in the IT workforce remained flat, with real salaries hovering around their late 1990s’ levels (Salzman et al. 2013). Therefore, local students in developed countries may be reluctant to enter IT jobs.

Mithas and Lucas 2010). The families of foreign IT professionals are often abroad and/or there is less work-family conflict for foreign IT professionals. They may thus be more willing to travel and to work during odd hours to coordinate with colleagues in other time zones than local IT professionals (Mithas and Lucas 2010). Therefore, foreign IT graduates could be preferred by employers for several reasons including their inability to negotiate salaries and switch jobs easily. Overall, we expect that,

At the same time, a foreign IT student may be willing to join the IT workforce for several reasons. First, foreign students could take up the vacancies in IT jobs due to few local students entering these jobs as discussed above. Second, visa restrictions may also encourage foreign IT students to enter an IT job in order to secure a legal residential status. Foreign students will have to leave the country upon failure to obtain a temporary work visa within a certain period after graduation. Entering IT jobs as compared to non-IT jobs as their first full-time employment should make it easier for foreign students to get their temporary work visa approved given that many countries are trying to attract and retain IT talents.

H5. Foreign IT graduates are more likely to enter an IT job than their local counterparts, for their first fulltime employment

Method and Data Data Collection We obtained our dataset from an employment survey of fresh graduates in a large public university in Singapore. The Singapore government has the vision of establishing an Asian innovation hub of technology industries and has implemented economic incentives to attract major software companies to the country, which greatly increases the demand for skilled IT labor and leads to a highly competitive IT labor market (Slaughter et al. 2007). This makes it a suitable context for the study of IT jobs as has been done previously (Ang et al. 2002; Ang et al. 2003; Slaughter et al. 2007).

Third, perceptions about IT jobs among foreign students from developing countries may be less negative (or may even be positive) as compared to local students. This is because an IT major or IT job could be seen as attractive in their country of origin. A recent Bloomberg report, based on data from PayScale and the International Monetary Fund (IMF), ranked countries by the relative salary of software engineers among all jobs i.e., the ratio of median software engineer’s pay to the average national st income (Bloomberg 2014). The U.S. was ranked 21 th with a ratio of 1.38, while Singapore is ranked 46 with a ratio of 0.7. In contrast, developing countries such as India (rank 2 with ratio of 3.9) and China (rank 5 with ratio of 3.15) were highly ranked. Therefore, foreign IT majors may be more likely to enter an IT job than local IT majors for several supply side reasons.

The survey we drew from is conducted annually and anonymously from the fresh graduates of the university. Our sample covered the period from 2007 to 2011. The subjects were undergraduate students who had just graduated from the university within the past 6 months, for each year in that period. Our dataset consists of students graduating with a bachelor’s degree in IT, which includes computer science and MIS. The survey items assessed the graduates’ demographic information and first full-time employment particulars. Since our data is from students of the same faculty in the same university, we are largely able to control for factors such as university reputation and education quality.

Further, from the demand side, given the prevalence of IT outsourcing in modern businesses, foreign IT workers are needed by IT employers because successful outsourcing relationships typically involve people who bridge cultures (Krishna et al. 2004), i.e., a mixed cultural team can be vital to address issues arising from cultural differences. In the globalized economy, IT projects are often implemented by IT professionals from all over the world. Foreign IT employees frequently act as boundary spanners to bridge communication gaps between the employees of the foreign outsourcing providers and customers located onshore (Mithas and Lucas 2010). Additionally, IT professionals may need to travel frequently and work at night or early in the morning to coordinate with co-workers, vendors, or business partners in other time zones (Krishna et al. 2004;


Variables The dependent variable in this study is the starting salary of IT graduates. It is measured by taking the logarithm of the reported starting salary (as per studies such as Sandvig et al. 2005) in the survey. The mediating variable, IT job entry is constructed as follows. To decide whether the first job of a graduate is IT or non-IT in nature, a PhD student in this area manually went through and classified each record by considering the job title, job description, company name, and industry sector of the graduate’s first job.

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The judgment was primarily based on the job function description, with additional information from the company’s nature of business. The classification was validated by two IS professors. Examples of IT jobs included programmer, software developer, IT designer and analyst, while examples of non-IT jobs included sales and marketing personnel, accountant, and bank teller.

Analysis and Results Hypotheses Results The proposed model was tested using Partial Least Square (PLS) as it is suitable for analysing multistage models such as ours (Gefen et al. 2011). Further, the PLS method has fewer distributional requirements as compared to covariance-based structural analyses, but still delivers consistent estimation results (Götz et al. 2010). The hypotheses testing results are shown in Figure 2 and Table 3.

In addition to the mediating variable, the independent variables of the model were also coded as dichotomous values. Gender equals 1 if the graduate is female and 0 if male. Foreigner status equals 1 if the graduate is a foreigner (most of the foreign students were Indian or Chinese) and 0 if not.

Table 1. Summary Statistics and Variable Descriptions

The control variables for our study are academic ability, major, financial assistance, student loan, and year since these factors may influence IT job entry and the starting salary of the graduate. Academic ability equals 1 if the graduate is a scholarship holder 7 and 0 if not. In the university under study, a scholarship is considered as an indicator of superior academic ability. Financial assistance equals 1 if the graduate received financial assistance from the university or any third-party organization, and 0 if not. Student loan equals 1 if the graduate is on student loan and 0 if not. Major equals 1 if the graduate’s major is MIS, and 0 if it is computer science. We used 4 dichotomous variables to indicate graduation year in our sample (2011 was the baseline). A year variable equals 1 if the graduate belongs to that year, and 0 otherwise. We excluded IT graduates who entered finance jobs from our sample because the salary for those jobs is much higher than other jobs in our sample and would confound our analysis. Additionally, we also excluded IT graduates who entered public sector jobs because more Singaporeans are employed in the public sector than foreigners. Further, Singaporean males who enrolled for military service would receive a salary premium if they work in the public sector. Finally, our dataset consisted of 828 IT graduates. Table 1 shows the summary statistics and descriptions of the model variables. More sample details are provided in Table A in the Appendix. The correlations of the model variables are shown in Table 2.

Description

Counts

IT Job Entry

Equals 1 if IT Job and 0 if non-IT job

IT job: 684 Non-IT job: 144

Gender

Equals 1 if female and 0 otherwise

Female: 234 Male: 594

Foreigner Status

Foreigner: 229 Equals 1 for foreigner and 0 Citizen and Resident: for citizen and resident 599

Academic Ability

Equals 1 if scholarship holder and 0 otherwise

Major

Equals 1 if the major is MIS MIS: 248 and 0 if computer science Comp. Sc.: 580

Scholarships are offered by the university to high calibre students who demonstrate academic excellence. Their performance is monitored and reviewed every semester and the scholarships are continued as long as the students maintain their academic excellence.

Scholarship: 110 No schol.: 718

Fin

Assistance

Equals 1 if financially assisted and 0 otherwise

Fn. Asst.: 28 Non Fn Asst.: 800

Student Loan

Equals 1 if on student loan and 0 otherwise

Std. Loan: 339 Non Std loan: 489

Year 2007

Equals 1 for students Students graduated in graduated in year 2007 and 2007: 210 0 other wise

Year 2008


Year 2009


Year 2010


Year 2011

Students graduated in year 2011 will have value 0 for all the (other) 4 year variables

(benchmark)

7


Variable

Students graduated in 2011: 145

N = 828

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Table 2. Correlations of Variables Starting Salary

IT Job Entry

Gender

Foreigner Status

Academic Ability

Major

Fin Assistance

Student Loan

Year 2007

Year 2008

Year 2009

Starting Salary

1.000

IT Job Entry

0.095***

1.000

Gender

-0.130***

-0.130***

1.000

Foreigner Status

-0.054

0.070**

-0.040

1.000

Academic Ability

0.040

-0.027

-0.009

0.347***

1.000

Major

0.043

-0.117***

0.122***

-0.174***

-0.031

1.000

Fin Assistance

-0.053

-0.002

0.016

0.093***

-0.073**

0.024

1.000

Student Loan

-0.006

0.052

-0.015

0.062*

-0.326***

0.045

-0.156***

1.000

Year 2007

-0.060*

0.040

0.096***

-0.019

0.025

-0.218***

-0.109***

-0.062*

1.000

Year 2008

0.022

0.046

0.016

-0.088**

-0.017

0.121***

-0.082**

-0.072**

-0.256***

1.000

Year 2009

-0.154***

0.003

-0.081**

0.088**

0.003

-0.025

0.126***

0.033

-0.289***

-0.218***

1.000

Year 2010

0.080**

-0.003

-0.064*

0.029

0.040

0.124***

0.001

0.090***

-0.303***

-0.228***

-0.257***

Note: *** p Starting Salary Major -> Starting Salary

0.040

0.037

1.077

Not Significant

Fin Assistance-> Starting Salary

-0.036

0.044

0.806

Not Significant

Student Loan -> Starting Salary

0.003

0.035

0.098

Not Significant

Year2007 -> Starting Salary

-0.170

0.052

3.260

Significant


-0.107

0.045

2.373

Significant


-0.244

0.049

4.996

Significant


-0.073

0.048

1.514

Not Significant

Post-hoc Test of Mediating Effects We followed the well-accepted method of Baron and Kenny (1986) to test the mediating effects of IT job entry. Their method requires the following steps: (a) regressing the mediator on the independent variable; (b) regressing the dependent variable on the independent variable; (c) regressing the dependent variable on the mediator; (d) regressing the dependent variable on both the independent variable and the mediator. To establish mediation, the effects of the independent variables need to be significant in step (a) and (b), while the effect of the mediator needs to be significant in step (c). The results are summarized in Table 4. To test whether the mediating effects are significant, we followed the method and calculated the Z-statistics. The results of the Z-values for each potential mediating effect are shown in the last row of Table 4. From the table we can see that IT job entry

N = 828: Bootstrapping Cases = 828; Samples = 5000

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Note that all our model variables have dichotomous, single indicators. Consequently, a limitation of our analysis is that we do not perform the typical steps of testing convergent and discriminant validity in PLS-SEM that are meant for multi-item constructs. However, we have included several robustness checks to make sure that our results are stable. 10 Due to data availability issues, we were able to test a slightly smaller sample (N = 778) for this variable.

Among the control variables, year dichotomous variables of 2007-2009 are negatively significant as compared to the baseline year of 2011 (particularly year 2009 shows the most negative effect during the financial crisis). Additionally, academic ability has a positive effect on starting salary as expected. IT graduates with high academic ability, on average, earn 7.1% more than those with low academic ability.


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significantly mediates the relationship between gender and the starting salary of the IT graduate. This partial mediating effect is statistically significant at 5% level. However, IT job entry does not mediate the relationship between foreigner status and starting salary of the IT graduate.

Generalizability of Findings Overall, our results regarding gender are consistent with previous findings that fewer computer-related jobs are occupied by females e.g., Panko (2008) reported 25% of such jobs were held by women based on data from U.S. and Western Europe. Indeed, it has been a global phenomenon that females are underrepresented in the IT workforce, including in the U.S. (Trauth et al. 2009), the U.K. (Tattersall et al. 2006), Australia (Byrne et al. 2006), India (Pande 2006), Canada, Germany, and New Zealand (Trauth et al. 2008). The trend continues with the latest statistics from the U.S. indicating that women account for 11 26.1% of jobs in computer-related occupations. Thus, we believe our findings with respect to gender may be generalizable to a broad range of countries.

Table 4. Four Steps of Mediation Test

Dependent Variable

Gender

Foreigner Status

IT Job Entry

Step (a)

IT Job Entry

-0.118***

0.065*

-

Step (b)

Starting Salary

-0.141***

-0.063*

-

Step (c)

Starting Salary

-

-

0.095**

Step (d)

Starting Salary

-0.129***

0.071**

0.101***

Z-value

N.A.

-2.025**

1.454

N.A.

However, we expect our results regarding foreigner status to be mainly generalizable to developed countries where the dominant sources of foreign students in IT majors are from developing countries and have employment opportunities in that country after graduation. Thus, it would be worthwhile to study this phenomenon in other countries to assess the applicability of our findings. Particularly, the U.S. would be a useful case to examine since its IT industry has been considered the most competitive in 12 the world and was expected to show the highest IT employment growth in 2013 (KPMG, 2013). We expect that our findings regarding foreigner status could be generalizable to the U.S. as its main sources of foreign students in computer-related subjects are from China and the rest of Asia13, where the relative wage of IT workers is much higher than that in the U.S. (Bloomberg 2014). Also, the U.S. offers opportunities for foreign students to be employed after they graduate. However, the findings may differ in other developed countries such as the U.K. and Germany where the job opportunities for foreign IT graduates (particularly non-EU graduates) are more limited than in the U.S.

Note: *** p