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University Selectivity and the Graduate Wage Premium: Evidence from the UK

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  • Walker, Ian

    () (Lancaster University)

  • Zhu, Yu

    () (University of Dundee)

Abstract

We study the relative labour market wage outcomes of university graduates in the UK using the Labour Force Survey (LFS), matched to mean standardised admission scores at the institution*subject*cohort 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 in undergraduate degree subjects, degree class, and in particular the selectivity of the subject at 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 graduate wage premium across HEIs and subjects. In fact, much of the observed differential in relative wage outcomes across institutions*subjects is due to the quality of students that HEIs select.

Suggested Citation

  • Walker, Ian & Zhu, Yu, 2017. "University Selectivity and the Graduate Wage Premium: Evidence from the UK," IZA Discussion Papers 10536, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10536
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    References listed on IDEAS

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    1. Smith, Jonathan, 2013. "Ova and out: Using twins to estimate the educational returns to attending a selective college," Economics of Education Review, Elsevier, vol. 36(C), pages 166-180.
    2. Chevalier, Arnaud & Conlon, Gavan, 2003. "Does It Pay to Attend a Prestigious University?," IZA Discussion Papers 848, Institute for the Study of Labor (IZA).
    3. Goodman, Joshua & Hurwitz, Michael & Smith, Jonathan & Fox, Julia, 2015. "The relationship between siblings’ college choices: Evidence from one million SAT-taking families," Economics of Education Review, Elsevier, vol. 48(C), pages 75-85.
    4. 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, Oxford University Press, vol. 117(4), pages 1491-1527.
    5. Wise, David A, 1975. "Academic Achievement and Job Performance," American Economic Review, American Economic Association, vol. 65(3), pages 350-366, June.
    6. Lewis C. Solomon, 1975. "The Definition of College Quality and Its Impact on Earnings," NBER Chapters,in: Explorations in Economic Research, Volume 2, number 4, pages 537-587 National Bureau of Economic Research, Inc.
    7. Chen, Weiwei & Grove, Wayne A. & Hussey, Andrew, 2012. "The payoff to school selectivity: An application of Dale and Krueger’s method to MBA programs," Economics Letters, Elsevier, vol. 116(2), pages 247-249.
    8. Hurwitz, Michael & Goodman, Joshua Samuel & Smith, Jonathan & Fox, Julia, 2015. "The relationship between siblings’ college choices: Evidence from one million SAT-taking families," Scholarly Articles 22805380, Harvard University Department of Economics.
    9. Loury, Linda Datcher & Garman, David, 1995. "College Selectivity and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 289-308, April.
    10. 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.
    11. Caroline M. Hoxby, 2009. "The Changing Selectivity of American Colleges," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 95-118, Fall.
    12. Dominic J. Brewer & Eric R. Eide & Ronald G. Ehrenberg, 1999. "Does It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 104-123.
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    Cited by:

    1. Milla, Joniada, 2017. "The Context-Bound University Selectivity Premium," IZA Discussion Papers 11025, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    college selectivity; graduate wage premium;

    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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