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Earnings returns to the British education expansion

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  • Devereux, Paul J.
  • Fan, Wen

Abstract

We study the effects of the large expansion in British educational attainment that took place for cohorts born between 1970 and 1975. Using the Quarterly Labour Force Survey, we find that the expansion caused men to increase education by about a year on average and gain about 8% higher wages; women obtained a slightly greater increase in education and a similar increase in wages. Clearly, there was a sizeable gain from being born late enough to take advantage of the greater educational opportunities offered by the expansion. Treating the expansion as an exogenous increase in educational attainment, we obtain instrumental variables estimates of returns to schooling of about 6% for both men and women.

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Bibliographic Info

Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 6 ()
Pages: 1153-1166

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1153-1166

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Web page: http://www.elsevier.com/locate/econedurev

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Keywords: Return to education; Higher education expansion;

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References

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  1. Andrea Ichino & Rudolf Winter-Ebmer, 2004. "The Long-Run Educational Cost of World War II," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(1), pages 57-86, January.
  2. Jo Blanden & Stephen Machin, 2004. "Educational Inequality and the Expansion of UK Higher Education," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(2), pages 230-249, 05.
  3. Sebastian Galiani & Samuel Berlinski, 2005. "The Effect of a Large Expansion of Pre-Primary School Facilities on Preschool Attendance and Maternal Employment," Working Papers 77, Universidad de San Andres, Departamento de Economia, revised Aug 2005.
  4. Jorn-Steffen Pischke & Till von Wachter, 2008. "Zero returns to compulsory schooling in Germany: evidence and interpretation," LSE Research Online Documents on Economics 19509, London School of Economics and Political Science, LSE Library.
  5. Uusitalo, R. & Conneely, K., 1998. "Estimating Heterogeneous Treatment Effects in the Becker Schooling Model," University of Helsinki, Department of Economics, Department of Economics 435, Department of Economics.
  6. Paul J Devereux & Robert A Hart, 2009. "Forced to be Rich? Returns to Compulsory Schooling in Britain," Working Papers, School Of Economics, University College Dublin 200924, School Of Economics, University College Dublin.
  7. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2010. "Widening participation in higher education: analysis using linked administrative data," IFS Working Papers, Institute for Fiscal Studies W10/04, Institute for Fiscal Studies.
  8. Giorgio Brunello, 2010. "The effects of cohort size on European earnings," Journal of Population Economics, Springer, vol. 23(1), pages 273-290, January.
  9. Claire Crawford & Lorraine Dearden & Costas Meghir, 2010. "When you are born matters: the impact of date of birth on educational outcomes in England," DoQSS Working Papers, Department of Quantitative Social Science - Institute of Education, University of London 10-09, Department of Quantitative Social Science - Institute of Education, University of London.
  10. Chevalier, Arnaud & Harmon, Colm & Walker, Ian & Zhu, Yu, 2003. "Does Education Raise Productivity or Just Reflect It?," CEPR Discussion Papers 3993, C.E.P.R. Discussion Papers.
  11. Levin, Jesse & Plug, Erik J. S., 1999. "Instrumenting education and the returns to schooling in the Netherlands," Labour Economics, Elsevier, vol. 6(4), pages 521-534, November.
  12. Dickson, Matt & Smith, Sarah, 2011. "What Determines the Return to Education: An Extra Year or a Hurdle Cleared?," IZA Discussion Papers 5524, Institute for the Study of Labor (IZA).
  13. Devereux, Paul J. & Hart, Robert A., 2005. "Real Wage Cyclicality of Job Stayers, Within-Company Job Movers, and Between-Company Job Movers," IZA Discussion Papers 1651, Institute for the Study of Labor (IZA).
  14. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-86, December.
  15. Kelly Bedard & Elizabeth Dhuey, 2006. "The Persistence of Early Childhood Maturity: International Evidence of Long-Run Age Effects," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 121(4), pages 1437-1472, November.
  16. Daniel A. Ackerberg & Paul J. Devereux, 2009. "Improved JIVE Estimators for Overidentified Linear Models with and without Heteroskedasticity," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 351-362, May.
  17. Dickson, Matt, 2009. "The Causal Effect of Education on Wages Revisited," IZA Discussion Papers 4419, Institute for the Study of Labor (IZA).
  18. Brunello, Giorgio & Miniaci, Raffaele, 1999. "The economic returns to schooling for Italian men. An evaluation based on instrumental variables1," Labour Economics, Elsevier, vol. 6(4), pages 509-519, November.
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Citations

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Cited by:
  1. Bhuller, Manudeep & Mogstad, Magne & Salvanes, Kjell G., 2011. "Life-Cycle Bias and the Returns to Schooling in Current and Lifetime Earnings," IZA Discussion Papers 5788, Institute for the Study of Labor (IZA).
  2. Dickson, Matt & Smith, Sarah, 2011. "What determines the return to education: An extra year or a hurdle cleared?," Economics of Education Review, Elsevier, Elsevier, vol. 30(6), pages 1167-1176.
  3. Lindley, Joanne & Machin, Stephen, 2011. "Rising Wage Inequality and Postgraduate Education," IZA Discussion Papers 5981, Institute for the Study of Labor (IZA).
  4. Bhuller, Manudeep & Mogstad, Magne & Salvanes, Kjell G., 2014. "Life Cycle Earnings, Education Premiums and Internal Rates of Return," Discussion Paper Series in Economics 24/2014, Department of Economics, Norwegian School of Economics.
  5. Colm Harmon, 2011. "Economic Returns to Education: What We Know, What We Don’t Know, and Where We Are Going – Some Brief Pointers," Working Papers, Geary Institute, University College Dublin 201115, Geary Institute, University College Dublin.
  6. Machin Stephen & Marie Olivier & Vujić Sunčica, 2012. "Youth Crime and Education Expansion," Research Memorandum 037, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  7. Wen Fan, 2011. "Estimating the Return to College in Britain Using Regression and Propensity Score Matching," Working Papers, School Of Economics, University College Dublin 201119, School Of Economics, University College Dublin.

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