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Rates of Return to Degrees across British Regions


  • Nigel O'leary
  • Peter Sloane


O'Leary N. C. and Sloane P. J. Rates of return to degrees across British regions, Regional Studies. Earlier papers have found considerable heterogeneity in the returns to degrees in relation to subjects of study, degree classification and higher education institution. This paper examines heterogeneity of returns across British regions using the Labour Force Survey. It finds substantial regional variations in the financial rewards available to graduates, with much higher returns in London and the South East than elsewhere. Adjusting for regional differences in the cost-of-living narrows such differences considerably. Decompositional analysis suggests that coefficient effects dominate composition effects, consistent with agglomeration and productivity spillover effects being important. [image omitted] O'Leary N. C. et Sloane P. J. Le taux de rendement des diplomes universitaires a travers les regions de la Grande-Bretagne, Regional Studies. Des articles anterieures ont trouve que le rendement des diplomes universitaires par rapport a la matiere, a la mention et a l'universite est dans une large mesure heterogene. A partir de l'enquete sur l'emploi, cet article cherche a examiner l'heterogeneite du rendement a travers les regions de la Grande-Bretagne. Il s'avere d'importantes variations regionales des recompenses financieres offertes aux diplomes universitaires, dont des recompenses nettement plus elevees a Londres et dans le Sud-est qu'ailleurs. Une fois ajustees pour tenir compte des ecarts des couts de la vie, les differences se reduisent fortement. Une analyse par composantes laisse supposer que les effets des coefficients l'emportent sur les effets des composantes, ce qui correspond a l'importance des retombees d'agglomeration et de productivite. Education Diplomes universitaires Taux de rendement Regions O'Leary N. C. und Sloane P. J. Die Hohe der Einkommenssteigerung durch Hochschulabschlusse in verschiedenen britischen Regionen, Regional Studies. In fruheren Beitragen wurde eine ausgepragte Heterogenitat hinsichtlich der Einkommenssteigerung durch Hochschulabschlusse festgestellt, was das Studienfach, die Art des Abschlusses und die Art der Hochschule anbelangt. In diesem Artikel untersuchten wir mit Hilfe des Labour Force Survey die Heterogenitat der Einkommenssteigerung zwischen verschiedenen britischen Regionen. Wir stellten erhebliche regionale Schwankungen hinsichtlich der finanziellen Vorteile fur Hochschulabsolventen fest; insbesondere fallt die Einkommenssteigerung in London und im Sudosten Grossbritanniens deutlich hoher aus als anderswo. Diese Unterschiede verringern sich jedoch betrachtlich, wenn man die regionalen Unterschiede hinsichtlich der Lebenshaltungskosten berucksichtigt. Aus einer Dekompositionsanalyse geht hervor, dass die Koeffizienzeffekte die Kompositionseffekte dominieren, was zur Tatsache passt, dass die Effekte von Agglomeration und Produktivitatsubertragung eine wichtige Rolle spielen. Bildung Hochschulabschluss Hohe der Einkommenssteigerung Regionen O'Leary N. C. y Sloane P. J. Indices de los ingresos en funcion de los diplomas en las regiones britanicas, Regional Studies. Se ha observado en otros documentos previos una heterogeneidad considerable en los ingresos en funcion de los diplomas con relacion a las asignaturas, la clasificacion de licenciaturas y la universidad. En este ensayo examinamos la heterogeneidad de las devoluciones en las regiones britanicas mediante la Encuesta de Poblacion Activa. Observamos variaciones regionales significativas en las recompensas financieras disponibles para licenciados que son muy superiores en Londres y el sureste que en otras regiones. Estas diferencias se limitan de manera significativa si se tienen en cuenta las diferencias regionales en cuanto al indice del coste de la vida. Los analisis de descomposicion indican que los efectos de coeficiente dominan los efectos de composicion de acuerdo con los efectos de aglomeracion y desbordamientos de productividad que desempenan un papel importante. Educacion Diploma Tasas de devoluciones Regiones

Suggested Citation

  • Nigel O'leary & Peter Sloane, 2008. "Rates of Return to Degrees across British Regions," Regional Studies, Taylor & Francis Journals, vol. 42(2), pages 199-213.
  • Handle: RePEc:taf:regstd:v:42:y:2008:i:2:p:199-213 DOI: 10.1080/00343400601142811

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    References listed on IDEAS

    1. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
    2. F. L. Jones, 1983. "On Decomposing the Wage Gap: A Critical Comment on Blinder's Method," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 126-130.
    3. 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.
    4. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    5. Weale, Martin, 1993. "A Critical Evaluation of Rate of Return Analysis," Economic Journal, Royal Economic Society, vol. 103(418), pages 729-737, May.
    6. 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.
    7. Blackaby, D H & Manning, D N, 1990. "The North-South Divide: Questions of Existence and Stability?," Economic Journal, Royal Economic Society, vol. 100(401), pages 510-527, June.
    8. Enrico Moretti, 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions," American Economic Review, American Economic Association, vol. 94(3), pages 656-690, June.
    9. H. Battu & C. R. Belfield & P. J. Sloane, 1999. "Overeducation Among Graduates: a cohort view," Education Economics, Taylor & Francis Journals, vol. 7(1), pages 21-38.
    10. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February.
    11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    1. repec:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1122-4 is not listed on IDEAS
    2. Kristinn Hermannsson & Katerina Lisenkova & Patrizio Lecca & Peter McGregor & Kim Swales, 2010. "The Importance of Graduates for the Scottish Economy: A "Micro-to-Macro" Approach," Working Papers 1026, University of Strathclyde Business School, Department of Economics.
    3. Pamela Lenton, 2011. "Part time employment and happiness: A cross-country analysis," Working Papers 2011001, The University of Sheffield, Department of Economics, revised Jan 2011.
    4. Kidd, Michael & O'Leary, Nigel C. & Sloane, Peter J., 2014. "Should I Stay or Should I Go? An Investigation of Graduate Regional Mobility in the UK and its Impact upon Early Career Earnings," IZA Discussion Papers 8325, Institute for the Study of Labor (IZA).
    5. Kidd, Michael P. & O'Leary, Nigel & Sloane, Peter, 2017. "The impact of mobility on early career earnings: A quantile regression approach for UK graduates," Economic Modelling, Elsevier, vol. 62(C), pages 90-102.
    6. Cinzia Rienzo, 2017. "Real wages, wage inequality and the regional cost-of-living in the UK," Empirical Economics, Springer, vol. 52(4), pages 1309-1335, June.

    More about this item


    Education; Degree; Rates of return; Regions;

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics


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