Australian universities use tertiary admissions ranks (ATARs) as the main part of their admissions process. It helps universities to select which students to admit into competitive university courses. But how does ATAR translate to future earnings? We answer this question by using new taxation data to look at the relationship between university admissions ranks and long-run earnings outcomes. We find that:
- University graduates with higher ATARs earn higher median salaries. For example, at the age of 30, the median graduate with an ATAR above 98 earned $33,000 more than the median graduate with an ATAR below 70.
- Having a high ATAR does not guarantee a high salary. People who have similar ATARs earn different wages.
Several mechanisms can explain these findings. Further research by e61 will aim to examine these mechanisms.