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University Selectivity and the Relative Returns to Higher Education: Evidence from the UK

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  • Walker, Ian
  • Zhu, Yu

Abstract

We study the labour market wage outcomes of university graduates by course (i.e. by subject and institution) in the UK using the Labour Force Survey (LFS). We match this data to a measure of course “selectivity” (the mean standardised admission scores at the course level) using data on high school achievement scores of students admitted to these courses. Unlike earlier UK studies, we are able to consider the effect of differences across undergraduate degree subjects, and in particular the selectivity of both the subject studied and of the Higher Education Institution (HEI) attended. Our results show that selectivity of undergraduate degree programmes plays an important role in explaining the variation in the relative graduate wages across HEIs and subjects. In fact, much of the observed differential in relative wage outcomes across courses is due to the quality of students that HEIs select. That is not to say that the effect of course selectivity on wages implies that degrees are just signals of existing ability differences.

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  • Walker, Ian & Zhu, Yu, 2017. "University Selectivity and the Relative Returns to Higher Education: Evidence from the UK," GLO Discussion Paper Series 133, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:133
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    2. Leah Achdut & Elad Gutman & Idan Lipiner & Inbal Maayan & Noam Zussman, 2018. "The Wage Premium on Higher Education: Universities and Colleges," Bank of Israel Working Papers 2018.13, Bank of Israel.
    3. Zhu,Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," GLO Discussion Paper Series 1091, Global Labor Organization (GLO).
    4. Adamecz-Völgyi, Anna & Henderson, Morag & Shure, Nikki, 2021. "Intergenerational Educational Mobility – The Role of Non-cognitive Skills," IZA Discussion Papers 14580, Institute of Labor Economics (IZA).
    5. Patrick Lehnert & Madison Dell & Uschi Backes-Gellner & Eric Bettinger, 2024. "The Effect of Postsecondary Educational Institutions on Local Economies: A Bird's-Eye View," Economics of Education Working Paper Series 0210, University of Zurich, Department of Business Administration (IBW).
    6. Silva, Pedro Luís & Sá, Carla & Biscaia, Ricardo & Teixeira, Pedro N., 2022. "High School and Exam Scores: Does Their Predictive Validity for Academic Performance Vary with Programme Selectivity?," IZA Discussion Papers 15350, Institute of Labor Economics (IZA).
    7. Suqin Ge & Elliott Isaac & Amalia Miller, 2022. "Elite Schools and Opting In: Effects of College Selectivity on Career and Family Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 383-427.
    8. Anna Adamecz & Morag Henderson & Nikki Shure, 2024. "Intergenerational educational mobility – The role of non-cognitive skills," Education Economics, Taylor & Francis Journals, vol. 32(1), pages 59-78, January.
    9. Shure, Nikki & Zierow, Larissa, 2023. "High Achieving First-Generation University Students," IZA Discussion Papers 16654, Institute of Labor Economics (IZA).
    10. Guilherme Strifezzi Leal & Ã lvaro Choi, 2021. "Racial quotas in higher education and pre-college academic performance: Evidence from Brazil," UB School of Economics Working Papers 2021/411, University of Barcelona School of Economics.
    11. Zheng, Yanqiao & Zhang, Xiaoqi & Zhu, Yu, 2021. "Overeducation, major mismatch, and return to higher education tiers: Evidence from novel data source of a major online recruitment platform in China," China Economic Review, Elsevier, vol. 66(C).
    12. Adamecz-Völgyi, Anna & Shure, Nikki, 2022. "The gender gap in top jobs – The role of overconfidence," Labour Economics, Elsevier, vol. 79(C).
    13. Kang, Lili & Peng, Fei & Zhu, Yu, 2018. "Returns to higher education subjects and tiers in China - Evidence from the China Family Panel Studies," GLO Discussion Paper Series 238, Global Labor Organization (GLO).
    14. Britton, Jack & van der Erve, Laura & Belfield, Chris & Vignoles, Anna & Dickson, Matt & Zhu, Yu & Walker, Ian & Dearden, Lorraine & Sibieta, Luke & Buscha, Franz, 2022. "How much does degree choice matter?," Labour Economics, Elsevier, vol. 79(C).
    15. Yee, Karol Mark Ramirez, 2023. "Raising the floor while lowering the ceiling: Reduced inequities in education returns in the Philippines," International Journal of Educational Development, Elsevier, vol. 101(C).
    16. Adamecz-Völgyi, Anna & Henderson, Morag & Shure, Nikki, 2020. "Is ‘first in family’ a good indicator for widening university participation?," Economics of Education Review, Elsevier, vol. 78(C).
    17. Hongyun Zheng & Wanglin Ma, 2023. "Smartphone-based information acquisition and wheat farm performance: insights from a doubly robust IPWRA estimator," Electronic Commerce Research, Springer, vol. 23(2), pages 633-658, June.
    18. Del Bono, Emilia & Fumagalli, Laura & Holford, Angus & Rabe, Birgitta, 2022. "University access: the role of background and COVID-19 throughout the application process," ISER Working Paper Series 2022-07, Institute for Social and Economic Research.
    19. Huang, Bin & Xu, Lei & Zhu, Yu, 2019. "Does the higher education expansion in the UK reduce the returns to education? A comparison of returning-from-work versus fresh out-of-school graduates," Economic Modelling, Elsevier, vol. 79(C), pages 276-285.
    20. Nikki Shure & Larissa Zierow, 2023. "High Achieving First-Generation University Students," CESifo Working Paper Series 10832, CESifo.
    21. Ghulam Mustafa, 2023. "Is the Decision to Obtain Higher Education in Pakistan Worth Repaying? New Evidence from Returns on Education for Paid-Employees," PIDE-Working Papers 2023:6, Pakistan Institute of Development Economics.

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    More about this item

    Keywords

    College selectivity; relative returns to higher education;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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