Differences by Degree: Evidence of the Net Financial Rates of Return to Undergraduate Study for England and Wales
This paper uses the Quarterly Labour Force Survey, the latest and largest dataset available, to provide independent estimates of returns to higher education qualifications in the UK for graduates with different degree majors, class of first degree, and postgraduate qualifications. For reasons of sample size, we collapse various undergraduate degrees into four broad subject groups: STEM (Science, Technology, Engineering and Mathematics - and here we also include Medicine); LEM (Law, Economics and Management), OSSAH (other social sciences, arts and humanities which includes languages), and COMB (those with degrees that combine more than one subject). We adopt a method which allows our data to identify the effects of experience on earnings separately from cohort effects in wages for different degree majors. We also allow for tuition fees and the tax system in calculating the NPV associated with higher education (and also the loan scheme). Ordinary Least Squares estimates show high average returns for women that does not differ by subject. For men, we find very large returns for LEM but not for other subjects. Degree class has large effects in all subjects suggesting the possibility of large returns to effort and ability. Postgraduate study has large effects, independently of first degree class. A large rise in tuition fees across all subjects has only a modest impact on relative rates of return suggesting that little substitution across subjects would occur. The strong message that comes out of this research is that even a large rise in tuition fees makes little difference to the quality of the investment – those subjects that offer high returns (LEM for men, and all subjects for women) continue to do so. And those subjects that do not (especially OSSAH for men) will continue to offer poor returns. The effect of fee rises is dwarfed by existing cross subject differences in returns.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sloane, Peter J. & O'Leary, Nigel C., 2004.
"The Return to a University Education in Great Britain,"
IZA Discussion Papers
1199, Institute for the Study of Labor (IZA).
- Nigel C. Oâ€™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.
- Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2010.
"The Effect of Financial Rewards on Students' Achievement: Evidence from a Randomized Experiment,"
Journal of the European Economic Association,
MIT Press, vol. 8(6), pages 1243-1265, December.
- Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2004. "The e ect of financial rewards on students achievement: Evidence from a randomized experiment," HEW 0410002, EconWPA.
- Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2003. "The Effect of Financial Rewards on Students' Achievements: Evidence from a Randomized Experiment," CEPR Discussion Papers 3921, C.E.P.R. Discussion Papers.
- Bas van der Klaauw & Edwin Leuven & Hessel Oosterbeek, 2006. "The effect of financial rewards on students' achievement: Evidence from a randomized experiment," Artefactual Field Experiments 00078, The Field Experiments Website.
- Hussain, Iftikhar & McNally, Sandra & Telhaj, Shqiponja, 2009.
"University Quality and Graduate Wages in the UK,"
IZA Discussion Papers
4043, Institute for the Study of Labor (IZA).
- Iftikhar Hussain & Sandra McNally & Shqiponja Telhaj, 2009. "University quality and graduate wages in the UK," LSE Research Online Documents on Economics 25486, London School of Economics and Political Science, LSE Library.
- 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.
- MONTMARQUETTE, Claude & CANNINGS, Kathy & MAHSEREDJIAN, Sophie, 1997.
"How do Young People Choose College Majors?,"
Cahiers de recherche
9719, Universite de Montreal, Departement de sciences economiques.
- Kathy Cannings & Sophie Mahseredjian & Claude Montmarquette, 1997. "How Do Young People Choose College Majors ?," CIRANO Working Papers 97s-38, CIRANO.
- Montmarquette, C. & Cannings, C. & Mahseredjian,S., 1997. "How do Young People Choose College Majors?," Cahiers de recherche 9719, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Eide, Eric & Brewer, Dominic J. & Ehrenberg, Ronald G., 1998. "Does it pay to attend an elite private college? Evidence on the effects of undergraduate college quality on graduate school attendance," Economics of Education Review, Elsevier, vol. 17(4), pages 371-376, October.
When requesting a correction, please mention this item's handle: RePEc:laa:wpaper:33. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.