Differences by Degree: Evidence of the Net Financial Rates of Return to Undergraduate Study for England and Wales
AbstractThis paper uses the Quarterly Labour Force Survey, the latest and largest dataset available, to provide independent estimates of returns to higher education qualifications in the UK for graduates with different degree majors, class of first degree, and postgraduate qualifications. For reasons of sample size, we collapse various undergraduate degrees into four broad subject groups: STEM (Science, Technology, Engineering and Mathematics - and here we also include Medicine); LEM (Law, Economics and Management), OSSAH (other social sciences, arts and humanities which includes languages), and COMB (those with degrees that combine more than one subject). We adopt a method which allows our data to identify the effects of experience on earnings separately from cohort effects in wages for different degree majors. We also allow for tuition fees and the tax system in calculating the NPV associated with higher education (and also the loan scheme). Ordinary Least Squares estimates show high average returns for women that does not differ by subject. For men, we find very large returns for LEM but not for other subjects. Degree class has large effects in all subjects suggesting the possibility of large returns to effort and ability. 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by AlmaLaurea Inter-University Consortium in its series Working Papers with number 33.
Date of creation: Sep 2011
Date of revision:
Contact details of provider:
Web page: http://www.almalaurea.it
Rate of return; college premium;
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.
- Walker, Ian & Zhu, Yu, 2010. "Differences by Degree: Evidence of the Net Financial Rates of Return to Undergraduate Study for England and Wales," IZA Discussion Papers 5254, Institute for the Study of Labor (IZA).
- 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-2011-11-01 (All new papers)
- NEP-EDU-2011-11-01 (Education)
- NEP-LAB-2011-11-01 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Iftikhar Hussain & Sandra McNally & Shqiponja Telhaj, 2009.
"University quality and graduate wages in the UK,"
LSE Research Online Documents on Economics
25486, London School of Economics and Political Science, LSE Library.
- Hussain, Iftikhar & McNally, Sandra & Telhaj, Shqiponja, 2009. "University Quality and Graduate Wages in the UK," IZA Discussion Papers 4043, Institute for the Study of Labor (IZA).
- 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.
- Nigel C. Oâ€™Leary & Peter J. Sloane, 2005.
"The Return to a University Education in Great Britain,"
National Institute Economic Review,
National Institute of Economic and Social Research, vol. 193(1), pages 75-89, July.
- Sloane, Peter J. & O'Leary, Nigel C., 2004. "The Return to a University Education in Great Britain," IZA Discussion Papers 1199, Institute for the Study of Labor (IZA).
- Kathy Cannings & Sophie Mahseredjian & Claude Montmarquette, 1997.
"How Do Young People Choose College Majors ?,"
CIRANO Working Papers
- MONTMARQUETTE, Claude & CANNINGS, Kathy & MAHSEREDJIAN, Sophie, 1997. "How do Young People Choose College Majors?," Cahiers de recherche 9719, Universite de Montreal, Departement de sciences economiques.
- Montmarquette, C. & Cannings, C. & Mahseredjian,S., 1997. "How do Young People Choose College Majors?," Cahiers de recherche 9719, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Eide, Eric & Brewer, Dominic J. & Ehrenberg, Ronald G., 1998. "Does it pay to attend an elite private college? Evidence on the effects of undergraduate college quality on graduate school attendance," Economics of Education Review, Elsevier, vol. 17(4), pages 371-376, October.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Tjaša Bartolj & Aleš Ahcan & Aljoša Feldinb & Sašo Polanec, 2012.
"Evolution of Private Returns to Tertiary Education during Transition: Evidence from Slovenia,"
LICOS Discussion Papers
31412, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Tjaša Bartolj & Aleš AhCan & Aljoša Feldin & Sašo Polanec, 2013. "Evolution of private returns to tertiary education during transition: evidence from Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 407-424, September.
- Denny, Kevin & Doyle, Orla & McMullin, Patricia & O'Sullivan, Vincent, 2014.
"Money, mentoring and making friends: The impact of a multidimensional access program on student performance,"
Economics of Education Review,
Elsevier, vol. 40(C), pages 167-182.
- Kevin Denny & Orla Doyle & Patricia O'Reilly & Vincent O'Sullivan, 2010. "Money, Mentoring and Making Friends: The Impact of a Multidimensional Access Program on Student Performance," Working Papers 201011, School Of Economics, University College Dublin.
- Kevin Denny & Orla Doyle & Patricia O'Reilly & Vincent O'Sullivan, 2010. "Money, Mentoring and Making Friends: The Impact of a Multidimensional Access Program on Student Performance," Working Papers 201021, Geary Institute, University College Dublin.
- Denny, Kevin & Doyle, Orla & O’Reilly, Patricia & O’Sullivan, Vincent, 2010. "Money, Mentoring and Making Friends : The Impact of a Multidimensional Access Program on Student Performance," The Warwick Economics Research Paper Series (TWERPS) 932, University of Warwick, Department of Economics.
- Kevin Denny & Orla Doyle & Patricia O'Reilly & Vincent O'Sullivan, 2010. "Money, mentoring and making friends: the impact of a multidimensional access program on student performance," IFS Working Papers W10/12, Institute for Fiscal Studies.
- Jo Blanden & Lindsey Macmillan, 2014. "Education and Intergenerational Mobility: Help or Hindrance?," DoQSS Working Papers 14-01, Department of Quantitative Social Science - Institute of Education, University of London.
- MORIKAWA Masayuki, 2013. "Postgraduate Education, Labor Participation, and Wages: An empirical analysis using micro data from Japan," Discussion papers 13065, Research Institute of Economy, Trade and Industry (RIETI).
- Lindley, Joanne, 2012. "The gender dimension of technical change and the role of task inputs," Labour Economics, Elsevier, vol. 19(4), pages 516-526.
- Lindsey Macmillan & Claire Tyler & Anna Vignoles, 2013. "Who gets the Top Jobs? The role of family background and networks in recent graduates' access to high status professions," DoQSS Working Papers 13-15, Department of Quantitative Social Science - Institute of Education, University of London.
- Andrew Mearman & Aspasia Papa & Don Webber, 2014.
"Why do Students Study Economics?,"
Economic Issues Journal Articles,
Economic Issues, vol. 19(1), pages 119-147, March.
- MORIKAWA Masayuki, 2012. "Postgraduate Education and Human Capital Productivity in Japan," Discussion papers 12009, Research Institute of Economy, Trade and Industry (RIETI).
- Javier Valbuena, 2012. "A Longitudinal Perspective on Higher Education Participation in the UK," Studies in Economics 1215, Department of Economics, University of Kent.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.