Differences by Degree: Evidence of the Net Financial Rates of Return to Undergraduate Study for England and Wales
AbstractThis paper provides estimates of the impact of higher education qualifications on the earnings of graduates in the UK by subject studied. We use data from the recent UK Labour Force Surveys which provide a sufficiently large sample to consider the effects of the subject studied, class of first degree, and postgraduate qualifications. Ordinary Least Squares estimates show high average returns for women that does not differ by subject. For men, we find very large returns for Law, Economics and Management but not for other subjects. Quantile Regression estimates suggest negative returns for some subjects at the bottom of the distribution, or even at the median in Other Social Sciences, Arts and Humanities for men. Degree class has large effects in all subjects suggesting the possibility of large returns to effort. Postgraduate study has large effects, independently of first degree class. A large rise in tuition fees across all subjects has only a modest impact on relative rates of return suggesting that little substitution across subjects would occur. The strong message that comes out of this research is that even a large rise in tuition fees makes little difference to the quality of the investment – those subjects that offer high returns (LEM for men, and all subjects for women) continue to do so. And those subjects that do not (especially OSSAH for men) will continue to offer poor returns. The effect of fee rises is dwarfed by existing cross subject differences in returns.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5254.
Length: 28 pages
Date of creation: Oct 2010
Date of revision:
Publication status: published in: Economics of Education Review, 2011, 30 (6), 1177-1186
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Other versions of this item:
- Walker, Ian & Zhu, Yu, 2011. "Differences by degree: Evidence of the net financial rates of return to undergraduate study for England and Wales," Economics of Education Review, Elsevier, vol. 30(6), pages 1177-1186.
- Yu Zhu & Ian Walker, 2011. "Differences by Degree: Evidence of the Net Financial Rates of Return to Undergraduate Study for England and Wales," Working Papers 33, AlmaLaurea Inter-University Consortium.
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-06 (All new papers)
- NEP-EDU-2010-11-06 (Education)
- NEP-EUR-2010-11-06 (Microeconomic European Issues)
- NEP-LAB-2010-11-06 (Labour Economics)
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