IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v79y2022ics0927537122001580.html
   My bibliography  Save this article

How much does degree choice matter?

Author

Listed:
  • Britton, Jack
  • van der Erve, Laura
  • Belfield, Chris
  • Vignoles, Anna
  • Dickson, Matt
  • Zhu, Yu
  • Walker, Ian
  • Dearden, Lorraine
  • Sibieta, Luke
  • Buscha, Franz

Abstract

We use a large and novel administrative dataset to investigate returns to different university ‘degrees’ (subject-institution combinations) in the United Kingdom. Conditioning on a rich set of background characteristics, we find substantial variation in returns across degrees with similar selectivity levels, suggesting students’ degree choices matter a lot for later-life earnings. Returns increase with university selectivity much more at the top of the selectivity distribution than further down, and much more for some subjects than others. Returns are poorly correlated with observable degree characteristics other than selectivity, which could have important implications for student choices and the incentives of universities.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:labeco:v:79:y:2022:i:c:s0927537122001580
    DOI: 10.1016/j.labeco.2022.102268
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927537122001580
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.labeco.2022.102268?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    2. Gibbons, Stephen & Neumayer, Eric & Perkins, Richard, 2015. "Student satisfaction, league tables and university applications: Evidence from Britain," Economics of Education Review, Elsevier, vol. 48(C), pages 148-164.
    3. Haroon Chowdry & Claire Crawford & Lorraine Dearden & Alissa Goodman & Anna Vignoles, 2013. "Widening participation in higher education: analysis using linked administrative data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(2), pages 431-457, February.
    4. Massimo Anelli, 2020. "The Returns to Elite University Education: a Quasi-Experimental Analysis," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 2824-2868.
    5. Stuart Campbell & Lindsey Macmillan & Richard Murphy & Gill Wyness, 2022. "Matching in the Dark? Inequalities in Student to Degree Match," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 807-850.
    6. Caroline M. Hoxby, 2018. "The Productivity of US Postsecondary Institutions," NBER Chapters, in: Productivity in Higher Education, pages 31-66, National Bureau of Economic Research, Inc.
    7. Walker, Ian & Zhu, Yu, 2018. "University selectivity and the relative returns to higher education: Evidence from the UK," Labour Economics, Elsevier, vol. 53(C), pages 230-249.
    8. Raj Chetty & John N. Friedman & Emmanuel Saez & Nicholas Turner & Danny Yagan, 2017. "Mobility Report Cards: The Role of Colleges in Intergenerational Mobility," Working Papers 2017-059, Human Capital and Economic Opportunity Working Group.
    9. Emily Oster, 2019. "Unobservable Selection and Coefficient Stability: Theory and Evidence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 187-204, April.
    10. Stuart Campbell & Lindsey Macmillan & Richard Murphy & Gill Wyness, 2019. "Inequalities in student to course match: evidence from linked administrative data," CEP Discussion Papers dp1647, Centre for Economic Performance, LSE.
    11. Stacy B. Dale & Alan B. Krueger, 2014. "Estimating the Effects of College Characteristics over the Career Using Administrative Earnings Data," Journal of Human Resources, University of Wisconsin Press, vol. 49(2), pages 323-358.
    12. O'Leary, Nigel C. & Sloane, Peter J., 2005. "The Return to a University Education in Great Britain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 193, pages 75-89, July.
    13. Raj Chetty & John N Friedman & Emmanuel Saez & Nicholas Turner & Danny Yagan, 2020. "Income Segregation and Intergenerational Mobility Across Colleges in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(3), pages 1567-1633.
    14. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
    15. 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.
    16. Zachary Bleemer & Aashish Mehta, 2022. "Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 1-22, April.
    17. Webber, Douglas A., 2016. "Are college costs worth it? How ability, major, and debt affect the returns to schooling," Economics of Education Review, Elsevier, vol. 53(C), pages 296-310.
    18. Seth D. Zimmerman, 2019. "Elite Colleges and Upward Mobility to Top Jobs and Top Incomes," American Economic Review, American Economic Association, vol. 109(1), pages 1-47, January.
    19. Cunha, Jesse M. & Miller, Trey, 2014. "Measuring value-added in higher education: Possibilities and limitations in the use of administrative data," Economics of Education Review, Elsevier, vol. 42(C), pages 64-77.
    20. Andrew Foote & Kevin M. Stange, 2022. "Attrition from Administrative Data: Problems and Solutions with an Application to Postsecondary Education," NBER Working Papers 30232, National Bureau of Economic Research, Inc.
    21. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1491-1527.
    22. Arnaud Chevalier & Gavan Conlon, 2003. "Does it pay to attend a prestigious university?," CEE Discussion Papers 0033, Centre for the Economics of Education, LSE.
    23. Seth D. Zimmerman, 2014. "The Returns to College Admission for Academically Marginal Students," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 711-754.
    24. 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.
    25. Chevalier, Arnaud, 2011. "Subject choice and earnings of UK graduates," Economics of Education Review, Elsevier, vol. 30(6), pages 1187-1201.
    26. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    27. Dan A. Black & Jeffrey A. Smith, 2006. "Estimating the Returns to College Quality with Multiple Proxies for Quality," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 701-728, July.
    28. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2020. "The Consequences of Academic Match between Students and Colleges," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 767-808.
    29. Richard Blundell & David A. Green & Wenchao (Michelle) Jin, 2016. "The UK wage premium puzzle: how did a large increase in university graduates leave the education premium unchanged?," IFS Working Papers W16/01, Institute for Fiscal Studies.
    30. Jack Mountjoy & Brent Hickman, 2020. "The Returns to College(s): Estimating Value-Added and Match Effects in Higher Education," Working Papers 2020-08, Becker Friedman Institute for Research In Economics.
    31. Jack Britton & Lorraine Dearden & Neil Shephard & Anna Vignoles, 2016. "How English domiciled graduate earnings vary with gender, institution attended, subject and socio-economic background," IFS Working Papers W16/06, Institute for Fiscal Studies.
    32. Blundell, Richard, et al, 2000. "The Returns to Higher Education in Britain: Evidence from a British Cohort," Economic Journal, Royal Economic Society, vol. 110(461), pages 82-99, February.
    33. Anna, Petrenko, 2016. "Мaркування готової продукції як складова частина інформаційного забезпечення маркетингової діяльності підприємств овочепродуктового підкомплексу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    34. Jack Britton & Neil Shephard & Anna Vignoles, 2019. "A comparison of sample survey measures of earnings of English graduates with administrative data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 182(3), pages 719-754, June.
    35. 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, July.
    36. Massimo Anelli, 0. "The Returns to Elite University Education: a Quasi-Experimental Analysis," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 2824-2868.
    37. Buchmueller, Gerda & Walker, Ian, 2020. "The Graduate Wage and Earnings Premia and the Role of Non-Cognitive Skills," IZA Discussion Papers 13248, Institute of Labor Economics (IZA).
    38. Broecke, Stijn, 2012. "University selectivity and earnings: Evidence from UK data on applications and admissions to university," Economics of Education Review, Elsevier, vol. 31(3), pages 96-107.
    39. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boero, Gianna & Nathwani, Tej & Naylor, Robin & Smith, Jeremy, 2021. "Graduate Earnings Premia in the UK : Decline and Fall?," The Warwick Economics Research Paper Series (TWERPS) 1387, University of Warwick, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. Cecilia Machado & Germ'an Reyes & Evan Riehl, 2023. "The Direct and Spillover Effects of Large-scale Affirmative Action at an Elite Brazilian University," Papers 2305.02513, arXiv.org, revised Jun 2023.
    3. Milla, Joniada, 2017. "The Context-Bound University Selectivity Premium," IZA Discussion Papers 11025, Institute of Labor Economics (IZA).
    4. Jack Britton & Monica Costa Dias & David Goll, 2023. "Can higher education policy boost intergenerational mobility? Evidence from an empirical matching model," IFS Working Papers W23/06, Institute for Fiscal Studies.
    5. Jack Mountjoy & Brent Hickman, 2020. "The Returns to College(s): Estimating Value-Added and Match Effects in Higher Education," Working Papers 2020-08, Becker Friedman Institute for Research In Economics.
    6. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2020. "The Consequences of Academic Match between Students and Colleges," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 767-808.
    7. Nicolás de Roux & Evan Riehl, 2019. "Isolating Peer Effects in the Returns to College Selectivity," Documentos CEDE 17413, Universidad de los Andes, Facultad de Economía, CEDE.
    8. Drydakis, Nick, 2016. "The effect of university attended on graduates’ labour market prospects: A field study of Great Britain," Economics of Education Review, Elsevier, vol. 52(C), pages 192-208.
    9. Anna Adamecz-Völgyi & Morag Henderson & Nikki Shure, 2023. "The labor market returns to “first-in-family” university graduates," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1395-1429, July.
    10. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    11. Rajashri Chakrabarti & Nicole Gorton & Michael F. Lovenheim, 2020. "State Investment in Higher Education: Effects on Human Capital Formation, Student Debt, and Long-Term Financial Outcomes of Students," CESifo Working Paper Series 8592, CESifo.
    12. Walker, Ian & Zhu, Yu, 2018. "University selectivity and the relative returns to higher education: Evidence from the UK," Labour Economics, Elsevier, vol. 53(C), pages 230-249.
    13. Peter Arcidiacono & Michael Lovenheim, 2016. "Affirmative Action and the Quality-Fit Trade-Off," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 3-51, March.
    14. Justine Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2015. "The Effects of Earnings Disclosure on College Enrollment Decisions," Working Papers 2015-1, Princeton University. Economics Department..
    15. 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.
    16. Zhu, Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," IZA Discussion Papers 15299, Institute of Labor Economics (IZA).
    17. Machado, Cecilia & Reyes, Germán & Riehl, Evan, 2022. "Alumni Job Networks at Elite Universities and the Efficacy of Affirmative Action," IZA Discussion Papers 15026, Institute of Labor Economics (IZA).
    18. Cecilia Machado & Germán Reyes & Evan Riehl, 2023. "The Efficacy of Large-Scale Affirmative Action at Elite Universities," CEDLAS, Working Papers 0311, CEDLAS, Universidad Nacional de La Plata.
    19. 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.
    20. Andrews, Rodney J. & Imberman, Scott A. & Lovenheim, Michael F., 2020. "Recruiting and supporting low-income, high-achieving students at flagship universities," Economics of Education Review, Elsevier, vol. 74(C).

    More about this item

    Keywords

    Returns to education; Degree choice;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:79:y:2022:i:c:s0927537122001580. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/labeco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.