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What Determines the Return to Education: An Extra Year or a Hurdle Cleared?

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Listed:
  • Dickson, Matt

    () (University of Bath)

  • Smith, Sarah

    () (University of Bristol)

Abstract

The 1973 Raising of the School Leaving Age in England and Wales has been used to identify returns to years’ schooling. However, the reform affected the proportion with qualifications, as well as schooling length. To shed light on whether the returns reflect extra schooling or qualifications, we exploit another institutional rule – the Easter Leaving Rule – to obtain unbiased estimates of the effect of qualifications. We find sizeable returns to academic qualifications – increasing the probability of employment by 40 percentage points. This is more than 70% of the estimated return based on RoSLA, suggesting that qualifications drive most – but not all – of the returns to education.

Suggested Citation

  • Dickson, Matt & Smith, Sarah, 2011. "What Determines the Return to Education: An Extra Year or a Hurdle Cleared?," IZA Discussion Papers 5524, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5524
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sander Gerritsen, 2014. "Zero returns to compulsory schooling: Is it certification or skills that matters?," CPB Discussion Paper 293, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Buscha, Franz & Dickson, Matt, 2015. "The Wage Returns to Education over the Life-Cycle: Heterogeneity and the Role of Experience," IZA Discussion Papers 9596, Institute for the Study of Labor (IZA).
    3. Dickson, Matt & Gregg, Paul & Robinson, Harriet, 2013. "Early, Late or Never? When Does Parental Education Impact Child Outcomes?," IZA Discussion Papers 7123, Institute for the Study of Labor (IZA).
    4. Claire Crawford, 2014. "Socio-economic differences in university outcomes in the UK: drop-out, degree completion and degree class," IFS Working Papers W14/31, Institute for Fiscal Studies.
    5. Ettore Scappini & Marco Trentini, 2016. "Education and employment in Italy of the cohort of adults born in 1954–1958: an analysis from 1993 to 2009," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(4), pages 1611-1631, July.
    6. repec:zbw:espost:162940 is not listed on IDEAS
    7. JAMES, Jonathan & VUJIC, Suncica, 2016. "From high school to the high chair: Education and fertility timing," Working Papers 2016005, University of Antwerp, Faculty of Applied Economics.
    8. repec:eee:labeco:v:48:y:2017:i:c:p:87-104 is not listed on IDEAS
    9. Huebener, Mathias & Marcus, Jan, 2017. "Compressing instruction time into fewer years of schooling and the impact on student performance," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-14.
    10. Dinda, Soumyananda, 2015. "Return on Universal Education: SSA Case Study on Bihar," MPRA Paper 64831, University Library of Munich, Germany, revised 06 Jun 2015.
    11. Dickson, Matt & Harmon, Colm, 2011. "Economic returns to education: What We Know, What We Don’t Know, and Where We Are Going—Some brief pointers," Economics of Education Review, Elsevier, vol. 30(6), pages 1118-1122.
    12. Claire Tyler, 2016. "The role of non-cognitive and cognitive skills in accounting for the intergenerational transmission of 'top job' status," DoQSS Working Papers 16-03, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    13. Devereux, Paul J. & Fan, Wen, 2011. "Earnings returns to the British education expansion," Economics of Education Review, Elsevier, vol. 30(6), pages 1153-1166.
    14. Dan Anderberg & Yu Zhu, 2014. "What a difference a term makes: the effect of educational attainment on marital outcomes in the UK," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 387-419, April.
    15. A. Bergeaud & G. Cette & R. Lecat, 2016. "The role of production factor quality and technology diffusion in 20th century productivity growth," Working papers 588, Banque de France.
    16. Daniel Gray & Alberto Montagnoli & Mirko Moro, 2017. "Does education improve financial outcomes? Quasi-experimental evidence from Britain," Working Papers 2017010, The University of Sheffield, Department of Economics.
    17. Hart, Robert A & Moro, Mirko & Roberts, J Elizabeth, 2012. "Date of birth, family background, and the 11 plus exam: short- and long-term consequences of the 1944 secondary education reforms in England and W ales," Stirling Economics Discussion Papers 2012-10, University of Stirling, Division of Economics.

    More about this item

    Keywords

    qualifications; returns to education; RoSLA;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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