In this paper, we study the internal quantum efficiency and lasing threshold of AlGaN/GaN separate confinement heterostructures designed for ultraviolet laser emission. We discuss the effect of carrier localization and carrier diffusion on the optical performance. The implementation of graded index separate confinement heterostructures results in an improved carrier collection at the multi-quantum well, which facilitates population inversion and reduces the lasing threshold. However, this improvement is not correlated with the internal quantum efficiency of the spontaneous emission. We show that carrier localization at alloy inhomogeneities results in an enhancement of the radiative efficiency but does not reduce the laser threshold, which is more sensitive to the carrier injection efficiency.