THE EFFECTS OF GRADE POINT AVERAGE ON THE STARTING SALARY OF ECONOMICS GRADUATES AT FOREIGN TRADE UNIVERSITY FROM 2016 TO 2020

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS

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-RESEARCH PROPOSAL THE EFFECTS OF GRADE POINT AVERAGE ON THE STARTING SALARY OF ECONOMICS GRADUATES AT FOREIGN TRADE UNIVERSITY FROM 2016 TO 2020

Group number:

Instructor: Dr Phạm Thị Cẩm Anh

Class: KTEE206(GĐ1-HK1-2022-2023).1

Hanoi, 10/2022

TABLE OF CONTENTS

During the school years, students are often very concerned about their grades, as onlywith good scores will they be able to pass crucial examinations and continue theirpursuit of higher education However, in university, it seems that grades are no longerthe top priority It has been established (Potter, 2017) that Grade Point Average (GPA)reflects average academic performance and progress, and is considered when assessingstudents’ eligibility for passing courses and programmes at university Generally, GPA

is measured on a scale to a maximum score of 4.0, and is calculated by dividingquality points on a 4.0 scale (convertible from various types of grades), with totalamount of course credits For the majority of institutions, a GPA of 3.0 to 3.5 isdecent, and above 3.5 is considered remarkable When asked about students'preferences during the college years, most do not prioritize study or GPA, but focusmore on practical experience, professional skills, internships, etc Such a pattern hasbeen consistent in a dynamic environment like Foreign Trade University, at whichstudents always want to explore and experience new challenges Nonetheless, time isalways limited, and it is difficult to balance and master everything simultaneously.This means that more emphasis on practical experience would result in less time forstudies, which in turn directly affects GPA, diploma quality, and starting salary lateron

For those reasons, we decided to choose the topic: “GPA effects on the starting salary

of economics graduates at Foreign Trade University from 2016-2020” This study aims

to analyze the influence of GPA on the starting salaries of Economics graduates atForeign Trade University from 2016 to 2020 Through statistical data processing andanalysis, the results are hoped to provide Foreign Trade University students with adeeper insight into the importance of GPA, thereby helping them have betterorientations to improve their scores

LITERATURE REVIEW

1 Overview of determinants of starting salaries

Many people dream of a high starting salary, particularly graduates from elite andprestigious universities Considering the gap between starting salaries of graduates, ithas been determined to be different factors, including the level of education, years ofexperience, specific training, organizational pay system, workplace, and other startingcompensation (Milano, 2008) Analyzing and understanding these determinants is ofutmost importance as it helps graduates to know what factors to consider whenchoosing a job, and to help explain student starting salary disparities

2 Published related research

Among all the factors mentioned above, the level of education (or GPA, to be morespecific) is always catching the interest of researchers

The topic was analyzed (Johnson, 2003) and came the conclusion that GPA does notaffect the income of some groups, which was later further supported (Fan E, Meng X,Wei Z, Zhao G., 2018)

It was also believed that GPA affects starting salaries both negatively andinsignificantly (Johnson, 2006) The aforementioned researcher supports his theory byexplaining a phenomenon called “GPA inflation” which implies “the sustainablegrowth of GPA all over the world in the last decades.” This has eliminated thedifference between gifted and ordinary students; and as a result, the signaling role ofGPA is decreasing

From an examination of the correlation between GPA and earnings of graduates at atop Russian university in 2019 (Rudakov V, Roshchin S., 2019), it is concluded thatGPA significantly positively affects the salaries of BA graduates (9–12% wagepremium for an additional GPA point), whereas the inverse happens to MA programsones (7–8% wage penalty for an extra GPA point)

In addition, there was a demonstration that the educational system significantlyinfluenced wages, considering the case of a Taiwan university (Tao-Ming Cheng;Hsing-Yu Hou; Agrawal, Dinesh Chandra; Long-Sheng Chen; Ching-Jung Chi, 2019)

In a report published in 2010, a higher GPA was argued to directly lead to higherstarting earnings (Arcidiacono, Peter; Patrick Bayer and Aurel Hizmo, 2010) To bemore specific, the CVs of university graduates offer a wide range of information,including grades, results of different tests, etc, which enables job-seekers to revealtheir abilities and confirm them to employers

The theory of cultural capital was used to explain the relationship between GPA andstarting wages (Kingston, P W., 1981) The author wrote in his report: “Employerswho hire graduates for particularly highly privileged and well-paid positions mayvalue specific cultural resources and reward the amount of accumulated culturalcapital Higher academic achievement, which can be reflected by a degree from aprestigious university or diploma cum laude, is one of the standardized forms ofcultural capital and may provide higher returns”.

In a study, the effect of GPA on graduating students’ wages was researched using adata set from an elite university in China (Zou, T., Zhang, Y., & Zhou, B., 2022) Theauthors found out that as GPA increases by 1 unit, the starting monthly wage increases

by 29.6 percent on average Theoretically, the GPA matters for wages due to both thehuman capital and signaling effect

3 Research gap

The data sample of some studies is not complete and uniform; some research periodsare not long enough Therefore, there are still some shortcomings, and the accuracy isnot entirely accurate for scientific applications Besides, some research was conducted

a long time ago so the results can be outdated

Furthermore, among the previous studies presented, none of them examined the case

of Vietnamese graduates Things can happen differently in various countries, so wecannot make any conclusion concerning Vietnamese economics graduates based on theresearch results mentioned earlier

In this research, we would like to apply the theories of former reports and includesurveys to examine the impact of GPA on starting salaries of economics graduates.However, our data have some limitations and may not represent the whole population

of university graduates Also, almost all people are homogenous regardingprofessional skills and knowledge and even similar in personality traits Thus, thereport is prone to flaws

RESEARCH OBJECTIVES AND RESEARCH QUESTIONS

1 Research objectives

Due to limitations on research and literature on GPA as a factor in job application andemployment in general in Vietnam as a whole, we believe that it is imperative to setrelated objectives in order to give more coverage and raise public awareness about theissue Therefore, the study serves to:

- Compare the number of excellent, very good, good, and average degrees andresearch the relationship between diploma quality/GPA and starting salary, rank, orposition in the company

- Gather opinions of Foreign Trade University graduates about the application ofGPA into the future career

- Compare GPA with other criteria in the recruitment process of businesses andenterprises

2 Research questions

In the light of the above discussion my work aims to provide Foreign Trade Universitystudents with a deeper insight into the importance of GPA, thereby helping them havebetter orientations to improve their scores In summary, there is a need for a betterunderstanding of factors that affect economics graduates starting salary Morespecifically, the following research questions need to be addressed:

- What is the average graduation rate of excellent, very good, good and averagestudents majoring in Economics and International Economics at Foreign TradeUniversity in the past five years?

- What is the percentage of students working outside their majors when theygraduate?

- How can the knowledge learned in school be applied in the workingenvironment?

- Does GPA still remain a top priority for students?

- What are the factors that businesses and enterprises put on top of theirrecruitment process?

RESEARCH DESIGN AND DATA COLLECTION

1 Objective and approach to number method

- We consider the combination of quantitative and qualitative data, as well as themixed methods research approach according to our research objective, which is to gainlarge-scale statistical insights into the correlation between GPA and starting salary

⮚ Quantitative data is data value that comes in the forms of counts or numbers,constituting specific datasets with unique numerical value (Questionpro, 2018).Essentially, questions such as “How many?”, “How often?”, “How much”, areused to collect quantitative data As far as our research topic is concerned, wemake use of quantitative data to gather statistics such as amounts of startingsalary or the number of applicants of a business who were Foreign TradeUniversity’s graduates Afterwards, several techniques would be considered toform analysis of such quantitative data With such scope of analysis, quantitativedata is conducive to detailed research with minimized bias

⮚ Qualitative data, by definition, is not numerical (Questionpro, 2018), and canapproximate and characterize Statistically, qualitative data can be categorizedbased on characteristics of the subject Likewise, qualitative data is of greatsignificance to insightful research, since this data form involves much lessrestricted answers For our research, qualitative data can be noticed in questionsrelated to opinions and evaluations of aspects of GPA and employment

⮚ Mixed methods enable researchers to utilize both quantitative and qualitative data(Shorten and Smith, 2017) It is apparent from the nature of our research, thateither quantitative or qualitative data is insufficient for wide and clear results, sothe mixed methods approach would better equip us with a diverse researchviewpoint and potentially resulting in more comprehensive insights

- We will make use of the Foreign Trade University's alumni in Economics from2016-2020 with details about graduates’ overall GPA and diploma quality, after askingfor permission from the university department (Political & Student Affairsdepartment), and propose self-made questionnaires for data collection, whose proposalwould be presented later in this paper

● Sample: 368 Foreign Trade University graduates majoring in Economics and

International Economics (according to sample size calculator)

(This means 368 or more measurements/surveys are needed to have a confidence level

of 95% that the real value is within ±5% of the measured/surveyed value.)

● Duration: 2016-2020 (longitudinal/ panel data, which includes observations

about different time cross sections (Erica, 2019) Longitudinal or panel data isadvantageous in a way that allows more information, variability and efficiencycompared to pure times series or cross-sectional data.)

● Collecting both quantitative and qualitative data through survey research usingquestionnaires (Google Forms): Survey research, by definition, is the process ofgathering information from individual samples through their responses to questions(Check & Schutt, 2011) In fact, in survey research, a mixture of quantitative andqualitative research strategies could be facilitated, hence our selection of the approach.Particularly, questionnaires allow for a wider range of forms including email, Internet-based programs or a mixture of both (Check and Schutt, 2011) It is then expected thatsurvey research would help us arrive at solid statistical findings that would be properlyrepresentative of a population We decided to propose Google Forms as a channel forour questionnaires, an online data collection tool that gives users significant freedomregarding the choice of templates, answer customization and interaction From GoogleForms, it is simple to use and straightforward to understand for both researchers andparticipants, and questionnaires could be converted into links that are readily available

to be sent to a large number of participants Multiple platforms, including mobile andweb browsers, could be used to access Google Forms, making the tool reallyconvenient and versatile; special software is not necessarily required for it as well Inaddition, Google Forms enables researchers to obtain immediate results and replies asthey arrive It can also use charts and graphs to summarize and report the survey

output Independently administered Internet-based questionnaires as such would savetime, efforts and budget (Check & Schutt, 2011) Because we will carry out our survey

by distributing questionnaires to our respondents, the data we collect will be entirelyprimary data

● Using simple random sampling as our sampling technique: In this research, weinvestigate the effect of GPA on the starting salary of economics graduates fromForeign Trade University from 2016 to 2020 Since our research draws on aquantitative research design, the ideal would be to use a probability samplingtechnique because this allows us to make statistical inferences (i.e., generalizations)from our sample of all Foreign Trade University graduates from 2016 to 2020 Such aprobability sampling technique would provide greater external validity for ourfindings We want to select a sample that can be a representative subset of thepopulation where every participant has an equal probability of being selected tominimize sampling bias Furthermore, the sampling frame of our research is the wholepopulation, there is no need to divide the population into subgroups based on relevantcharacteristics Therefore, a simple random sampling method is the most feasible one

to generate a reliable and generalized result This study uses primary data fromquestionnaire survey data among graduates The questionnaire survey is conducted for

a duration of three months We selected the sample size of 368 graduates, which wasbased on the expected confidence level of the result and the practicalities of cost andtime Afterwards, we randomly sent an online questionnaire to 495 graduates (with anexpected response rate of 75%) who graduated from 2016 to 2020 495 graduates arerandomly selected from FTU's graduate database On the other hand, the most andleast successful graduates are less likely to respond to the survey because they areeither too busy to fill in the survey form or reluctant to report their embarrassment.This may result in some bias, but due to data constraints, we are unable to investigatefurther Duration: 3 months, from October to December, presumably the busier periodfor fresh graduates with full-time employment

● Time to conduct research: We choose to distribute question forms and carry outthe survey within three months, notably the duration from October to December, asthis is likely to be a busy time for fresh university graduates with full-timeemployment

● Procedures:

⮚ Asking for permission from the university’s major department (Political &Student Affairs department) for the list of targeted graduates’ personalinformation and contacts

⮚ Looking for contacts of targeted businesses and enterprises’ heads of the HumanResources Department

⮚ Creating sets of survey questions

⮚ Informing the public of the purpose and benefits of the survey, as well as theabsolute guarantee of information privacy for the participants

⮚ Directing to the Google Forms link with the survey and delivering questionnaires

to graduated students and directors of enterprises’ Human Resources Department

⮚ After gathering a significant number of replies from our respondents, we willsummarize and visualize the data using Google Forms’ matrix tables, charts andgraphs Then, based on the statistics acquired, we will make reasonableinterpretations and draw conclusions

2.2 Data requirement table

In order to address the confusion around the relevance of data collected, a suggestedway is to create a data requirement table (Saunders et al., 2019), which thespecifications as follows:

● Investigative questions: questions needing to be answered for each researchquestion to be addressed properly and for each objective to be met Types ofinvestigative questions range in between facts/demographics, attitudes/opinions

or behaviors/events, which are influenced by theory, key concepts, discussionsand pilot studies

● Variable(s) required: sources for data collection, and could also be suggested byliterature review and relevant research

● Detail in which data measured: basically, summaries of possible answers orapproaches to answering investigative questions

● Relation to theory and key concepts in literature: assessment of investigativequestions’ association with theory and literature, either “Yes” or “No”

● Check included in questionnaire: evaluation of whether or not the question hasbeen deemed suitable to be included in the final questionnaire

a) First mixed method questionnaire proposal

● Questionnaire subject(s): Foreign Trade University alumni in Economics

majors from 2016-2020, specifically International Trade, Economics andInternational Development, International Economics, International BusinessEconomics and Economics-International Business Economics with Colorado StateUniversity

● Introduce the questionnaire

Greetings! We are a group of Foreign Trade University students doing research todetermine the influence of GPA on the beginning salary of Foreign Trade Universitygraduates Here is a list of questions to help us gain insights of the issue

The questions we would like to ask will only take about 5 minutes Please fill in all ofthe questions provided Try to complete the questions at a time when you are unlikely

to be interrupted Also, do not spend too much time on any one question Your initialthoughts are usually your best! Even if you feel the items covered may not directlypertain to your expertise, please do not ignore them Your response to this survey will

be a valuable contribution as it allows us and university to better assess the impact ofGPA on the starting wage and assist undergraduates in landing desirable jobs

Please notice that every information you provide will be kept strictly confidential.Your participation in this study is totally voluntary If any of your information isrevealed, we will immediately resolve the problem and recompense you

Research objective: Research the relationship between diploma quality and starting salary and rank/position in

the company, as well as opinions about the application of GPA in university into the future job

Type of research: Descriptive research

Detail in which data

is measured

Relation to theory and key concepts in literature

Check included in questionnair e

1

What was your

starting salary (per

month)? (Factual)

Starting salaryper month

A: Under 3.5 million

VNDB: 3.5 million - under5.5 million VNDC: 5.5 million - under7.5 million VNDD: 7.5 million - under

10 million VNDE: Over 10 million

VND

The minimum wage in

2

What is your current

salary (per month)?

(Factual)

Current salaryper month

A: Under 3.5 million

VNDB: 3.5 million - under5.5 million VNDC: 5.5 million - under7.5 million VNDD: 7.5 million - under

10 million VNDE: Over 10 million

A: Yes