Graduates celebrating at of California State University, Northridge’s 2014 commencement ceremonies. Photo by Lee Choo.

Graduates from California State University, Northridge earn more than $64,000 annually — nearly $16,000 a year more than their classmates who dropped out — 10 years after leaving the university.

Research by a pair of CSUN faculty members in the David Nazarian College of Business and Economics led to the development of what they believe is a more accurate way of measuring the success of college graduates using state employment and tax data to track how much alumni earn two years, five years and 10 years after they graduate from an institution. Their method takes into account students who drop out or transfer to other institutions, and it tracks the success of students who go on to graduate school.

In 2013, management professor Richard Moore and economics professor Kenneth Chapman issued their first report on the status of CSUN graduates five years after graduation, about the time President Barack Obama first started pushing for a new rating system for colleges. The president advocated for a system that, among other things, judged schools on the success of their graduates.

The White House abandoned the ratings system earlier this month for a new “College Scorecard” that includes measurements of students’ earnings six and 10 years after they started at a college, a concept very similar to the research done by Moore, Chapman and study contributor Bettina Huber, CSUN’s director of institutional research.

“We salute the federal government for making the extraordinary effort to provide comparable information on the cost of college and the earning of students, after they leave,” Moore said. “But this first effort comes up short by our standards. The federal earning measures are based on the 36 percent of CSUN students who took out federal loans, and then mix together the earning of graduates who earned bachelor’s degrees with dropouts and students who went on to earn graduate degrees.

“We look at these groups separately,” Moore continued. “In our search, we found data for almost 60 percent of all students and a higher percentage of graduates. The Department of Education reports average earning of $44,000 10 years after graduation. Our results with a larger population of students find earnings of $48,000 for dropouts and $64,000 for graduates with only bachelor’s degrees 10 years after leaving CSUN. In terms of earnings, this is a huge difference. The federal estimate, while showing CSUN to be above average, significantly underestimates the value of a CSUN degree.”

Moore, Chapman and Huber established five guiding principles they argue would create a realistic, unbiased way of measuring success of an institution’s students: follow all matriculated students over time; use standard data available in every state, such as employment records and tax rolls; create standard, easy-to-understand labor market measures; break down the data to the campus and program level; and make the results public.

The trio of researchers used this method to measure the economic success of CSUN students. They collected records for all entering students, including first-time freshmen and transfer and post-baccalaureate students, for the years 1995-2000. They issued their first report in 2013, offering a snapshot of CSUN students’ success.

Five years after leaving CSUN, the average annual salary for the university’s graduates was about $51,000. For those who completed graduate degrees, the average annual salary five years out of CSUN was more then $68,000, while the salary for those who dropped out of the university was about $38,000.

The follow-up study takes a look at the annual salary for CSUN students 10 years after they leave the university. CSUN graduates earn, on average, $64,000 annually a decade after leaving the university. Those who completed graduate degrees have an average annual salary of more than $73,000. Those who dropped out of the university earned, on average, about $44,000 a year 10 years after leaving CSUN.

“Any group that you look at has different job market characteristics,” Chapman said. “They all start out pretty close to each other when they exit school, but the really impressive differences are over time because the earnings profile gets steeper for the higher level of education received. The gap between the ones who got their degrees and the [dropouts] is always there, but the more years you are out of school, the bigger the gap is.”

The follow-up study also includes a look into the industries CSUN graduates choose for careers. Five years after leaving the university, the top five industries for CSUN graduates are: educational services; health care and social assistance; professional, scientific and technical services; finance and insurance; and information.

“If you look at the industries that our graduates are going into, we are aligned with the modern service economy,” Moore said, noting that some skeptics wonder why such a report is even necessary. “This tells the story about how aligned we are with the economy, as well as how our students are doing, and communicates the value of graduating and providing information to students and their families for making choices.”

A copy of the complete report, including a breakdown by college and program, can be found on the university’s Office of Institutional Research website in the “CSUN by the Numbers” link under Alumni Earnings.

Alumni, David Nazarian College of Business and Economics, Featured, Graduate Earnings