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Does Higher Education Quality Matter in the UK?

In: Factors Affecting Worker Well-being: The Impact of Change in the Labor Market

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  • Arnaud Chevalier

Abstract

This paper estimates the financial returns to higher education quality in the UK. To account for the selectivity of students to institution, we rely on a selection on observable assumption. We use several estimates including the Generalised Propensity Score (GPS) of Hirano and Imbens, which relies on a continuous measure of institutional quality. This highlights that the returns to quality are heterogeneous and mostly driven by high-quality institutions. Moving from an institution in the third quality quartile to a top quality institution is associated with a 7% increase in earnings.

Suggested Citation

  • Arnaud Chevalier, 2014. "Does Higher Education Quality Matter in the UK?," Research in Labor Economics, in: Factors Affecting Worker Well-being: The Impact of Change in the Labor Market, volume 40, pages 257-292, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rleczz:s0147-912120140000040010
    DOI: 10.1108/S0147-912120140000040010
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    References listed on IDEAS

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    1. Smith, Jonathan, 2013. "Ova and out: Using twins to estimate the educational returns to attending a selective college," Economics of Education Review, Elsevier, vol. 36(C), pages 166-180.
    2. Chevalier, Arnaud & Conlon, Gavan, 2003. "Does It Pay to Attend a Prestigious University?," IZA Discussion Papers 848, Institute of Labor Economics (IZA).
    3. Kosuke Imai & David A. van Dyk, 2004. "Causal Inference With General Treatment Regimes: Generalizing the Propensity Score," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 854-866, January.
    4. Chevalier, Arnaud & Gibbons, Steve & Thorpe, Andy & Snell, Martin & Hoskins, Sherria, 2009. "Students' academic self-perception," Economics of Education Review, Elsevier, vol. 28(6), pages 716-727, December.
    5. Iftikhar Hussain & Sandra McNally & Shqiponja Telhaj, 2009. "University Quality and Graduate Wages in the UK," CEE Discussion Papers 0099, Centre for the Economics of Education, LSE.
    6. Mark L. Hoekstra, 2007. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," Working Paper 303, Department of Economics, University of Pittsburgh, revised Apr 2008.
    7. Brad J. Hershbein, 2013. "Worker Signals among New College Graduates: The Role of Selectivity and GPA," Upjohn Working Papers 13-190, W.E. Upjohn Institute for Employment Research.
    8. Robst, John, 1995. "College quality and overeducation," Economics of Education Review, Elsevier, vol. 14(3), pages 221-228, September.
    9. Long, Mark C., 2008. "College quality and early adult outcomes," Economics of Education Review, Elsevier, vol. 27(5), pages 588-602, October.
    10. Stacy B. Dale & Alan B. Krueger, 2014. "Estimating the Effects of College Characteristics over the Career Using Administrative Earnings Data," Journal of Human Resources, University of Wisconsin Press, vol. 49(2), pages 323-358.
    11. Kosuke Imai & Gary King & Elizabeth A. Stuart, 2008. "Misunderstandings between experimentalists and observationalists about causal inference," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(2), pages 481-502, April.
    12. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    13. Kawaguchi, Daiji & Ma, Wenjie, 2008. "The causal effect of graduating from a top university on promotion: Evidence from the University of Tokyo's 1969 admission freeze," Economics of Education Review, Elsevier, vol. 27(2), pages 184-196, April.
    14. James, Estelle, et al, 1989. "College Quality and Future Earnings: Where Should You Send Your Child to College?," American Economic Review, American Economic Association, vol. 79(2), pages 247-252, May.
    15. Xavier de Luna & Mathias Lundin, 2014. "Sensitivity analysis of the unconfoundedness assumption with an application to an evaluation of college choice effects on earnings," Journal of Applied Statistics, Taylor & Francis Journals, vol. 41(8), pages 1767-1784, August.
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    Citations

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    Cited by:

    1. Joanne Lindley & Stephen Machin, 2016. "The Rising Postgraduate Wage Premium," Economica, London School of Economics and Political Science, vol. 83(330), pages 281-306, April.
    2. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2020. "The Consequences of Academic Match between Students and Colleges," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 767-808.
    3. Arnaud Chevalier & Xiaoxuan Jia, 2016. "Subject-Specific League Tables and Students' Application Decisions," Manchester School, University of Manchester, vol. 84(5), pages 600-620, September.
    4. Claire Crawford & Anna Vignoles, 2014. "Heterogeneity in graduate earnings by socio-economic background," IFS Working Papers W14/30, Institute for Fiscal Studies.
    5. Silvia Kopecny & Steffen Hillmert, 2021. "Place of study, field of study and labour-market region: What matters for wage differences among higher-education graduates?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-21, December.
    6. Bacalhau, Priscilla & Mattos, Enlinson & Ponczek, Vladimir Pinheiro, 2019. "College quality signaling and individual performance: effects on labor market outcomes after graduation," Textos para discussão 502, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    7. Kopecny, Silvia & Hillmert, Steffen, 2021. "Place of study, field of study and labour-market region: What matters for wage differences among higher-education graduates?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-19.
    8. repec:iab:iabjlr:v:55:i::p:art.19 is not listed on IDEAS
    9. Sevilla, Almudena & Borra, Cristina, 2015. "Parental Time Investments in Children: The Role of Competition for University Places in the UK," IZA Discussion Papers 9168, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    College quality; returns to education; generalised propensity score; I22; J31;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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