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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

Related research

Keywords: Return to education; Higher education expansion;

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References

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  1. 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).
  2. Giorgio Brunello, 2007. "The Effects of Cohort Size on European Earnings," "Marco Fanno" Working Papers 0036, Dipartimento di Scienze Economiche "Marco Fanno".
  3. Devereux, Paul J. & Hart, Robert A., 2008. "Forced to Be Rich? Returns to Compulsory Schooling in Britain," IZA Discussion Papers 3305, Institute for the Study of Labor (IZA).
  4. 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 10-09, Department of Quantitative Social Science - Institute of Education, University of London.
  5. Dickson, Matt, 2009. "The Causal Effect of Education on Wages Revisited," IZA Discussion Papers 4419, Institute for the Study of Labor (IZA).
  6. Berlinski, Samuel & Galiani, Sebastian, 2007. "The effect of a large expansion of pre-primary school facilities on preschool attendance and maternal employment," Labour Economics, Elsevier, vol. 14(3), pages 665-680, June.
  7. 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).
  8. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003. "Does education raise productivity, or just reflect it?," Working Papers 200304, School Of Economics, University College Dublin.
  9. 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.
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  11. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2010. "Widening Participation in Higher Education: Analysis Using Linked Administrative Data," DoQSS Working Papers 10-08, Department of Quantitative Social Science - Institute of Education, University of London.
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  13. 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.
  14. 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.
  15. Andrea Ichino & Rudolf Winter-Ebmer, 2004. "The Long-Run Educational Cost of World War II," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 57-86, January.
  16. 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.
  17. 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.
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Citations

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Cited by:
  1. Dickson, Matt & Harmon, Colm, 2011. "Economic returns to education: What We Know, What We Don’t Know, and Where We Are Going—Some brief pointers," Economics of Education Review, Elsevier, vol. 30(6), pages 1118-1122.
  2. Machin, Stephen & Marie, Olivier & Vujić, Sunčica, 2012. "Youth Crime and Education Expansion," IZA Discussion Papers 6582, Institute for the Study of Labor (IZA).
  3. Lindley, Joanne & Machin, Stephen, 2011. "Rising Wage Inequality and Postgraduate Education," IZA Discussion Papers 5981, Institute for the Study of Labor (IZA).
  4. 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).
  5. 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).
  6. Bhuller, Manudeep & Mogstad, Magne & Salvanes, Kjell G., 2014. "Life Cycle Earnings, Education Premiums and Internal Rates of Return," IZA Discussion Papers 8316, Institute for the Study of Labor (IZA).
  7. Wen Fan, 2011. "Estimating the Return to College in Britain Using Regression and Propensity Score Matching," Working Papers 201119, School Of Economics, University College Dublin.

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