The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK
AbstractThis paper provides findings from the UK Labour Force Surveys from 1996 to 2003 on the financial private returns to a degree – the "college premium". The data covers a decade when the university participation rate doubled – yet we find no significant evidence that the mean return to a degree dropped in response to this large increase in the flow of graduates. However, we do find quite large falls in returns when we compare the cohorts that went to university before and after the recent rapid expansion of HE. The evidence is consistent with the notion that new graduates are a close substitute for recent graduates but poor substitutes for older graduates. There appears to have been a very recent increase in the number of graduates getting "non-graduate" jobs but, conditional on getting a graduate job the returns seem stable. Our results are consistent across almost all degree subjects – the exception being maths and engineering where we find that for men, and especially for women, there is a large increase in the proportion with maths and engineering degrees getting graduate jobs and that, conditional on this, the return is rising.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1627.
Length: 32 pages
Date of creation: Jun 2005
Date of revision:
Publication status: published in: Scandinavian Journal of Economics, 110, 695-709, 2008
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Find related papers by JEL classification:
- I20 - Health, Education, and Welfare - - Education - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-14 (All new papers)
- NEP-EDU-2005-06-14 (Education)
- NEP-EEC-2005-06-14 (European Economics)
- NEP-LAB-2005-06-14 (Labour Economics)
- NEP-LTV-2005-06-14 (Unemployment, Inequality & Poverty)
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