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What determines the return to education: An extra year or a hurdle cleared?

Listed author(s):
  • Dickson, Matt
  • Smith, Sarah

The 1973 Raising of the School Leaving Age from 15 to 16 has been used to identify returns to years’ schooling. However, because the first set of “high stakes” exams are taken in the UK at age 16, the reform affected the proportion with qualifications, as well as schooling length. In order to shed light on whether the returns reflect the extra length of schooling or the increase in qualifications, we exploit another institutional rule – the Easter Leaving Rule – which we argue only affected the probability of obtaining qualifications (and not the length of schooling). We find sizeable returns to academic qualifications – increasing the probability of employment by 40% points – and our results suggest that qualifications drive most of the returns to education.

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File URL: http://www.sciencedirect.com/science/article/pii/S0272775711000744
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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 6 ()
Pages: 1167-1176

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1167-1176
DOI: 10.1016/j.econedurev.2011.05.004
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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  1. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003. "Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS," IFS Working Papers W03/20, Institute for Fiscal Studies.
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  3. Devereux, Paul J. & Hart, Robert A, 2008. "Forced to be Rich? Returns to Compulsory Schooling in Britain," CEPR Discussion Papers 6679, C.E.P.R. Discussion Papers.
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  8. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics, Finance and Accounting Department Working Paper Series n540195, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  9. Robertson, Erin, 2011. "The effects of quarter of birth on academic outcomes at the elementary school level," Economics of Education Review, Elsevier, vol. 30(2), pages 300-311, April.
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  13. Lorraine Dearden, 1999. "Qualifications and earnings in Britain: how reliable are conventional OLS estimates of the returns to education?," IFS Working Papers W99/07, Institute for Fiscal Studies.
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  15. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2005. "Evaluating the effect of education on earnings: models, methods and results from the National Child Development Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 473-512.
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