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The College Wage Premium and the Expansion of Higher Education in the UK

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  • Ian Walker
  • Yu Zhu

Abstract

This paper reports estimates of the UK “college premium” for young graduates across successive cohorts from large cross‐section datasets for the UK pooled from 1994 to 2006—a period when the higher education participation rate increased dramatically. The growth in relative labour demand suggests that graduate supply considerably outstripped demand which ought to imply a fall in the premium. We find no significant fall for men and even a large, but insignificant, rise for women. Quantile regression results reveal a fall in the premium only for men in the bottom quartile of the distribution of unobserved skills.

Suggested Citation

  • Ian Walker & Yu Zhu, 2008. "The College Wage Premium and the Expansion of Higher Education in the UK," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 695-709, December.
  • Handle: RePEc:bla:scandj:v:110:y:2008:i:4:p:695-709
    DOI: 10.1111/j.1467-9442.2008.00557.x
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    References listed on IDEAS

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    1. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages 499-517, November.
    2. Steven Mcintosh, 2006. "Further Analysis of the Returns to Academic and Vocational Qualifications," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(2), pages 225-251, April.
    3. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    4. Claudia Goldin & Lawrence F. Katz, 2007. "Long-Run Changes in the Wage Structure: Narrowing, Widening, Polarizing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(2), pages 135-168.
    5. O'Leary, Nigel C. & Sloane, Peter J., 2005. "The Changing Wage Return to an Undergraduate Education," IZA Discussion Papers 1549, Institute of Labor Economics (IZA).
    6. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 635-666.
    7. Nigel C. O’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.
    8. Christopher R. Taber, 2001. "The Rising College Premium in the Eighties: Return to College or Return to Unobserved Ability?," Review of Economic Studies, Oxford University Press, vol. 68(3), pages 665-691.
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    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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