The college wage premium, overeducation, and the expansion of higher education in the UK

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Title: The college wage premium, overeducation, and the expansion of higher education in the UK
Authors: Walker, Ian
Zhu, Yu
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Date: 12-Jun-2007
Abstract: This paper provides findings from the UK Labour Force Surveys from 1993 to 2003 on the financial private returns to a degree – the "college premium". The data covers a decade when the university participation rate doubled – yet we find no significant1 evidence that the mean return to a degree dropped in response to this large increase in the flow of graduates. However, we do find quite large falls in returns when we compare the cohorts that went to university before and after the recent rapid expansion of HE. The evidence is consistent with the notion that new graduates are a close substitute for recent graduates but poor substitutes for older graduates. There appears to have been a very recent increase in the number of graduates getting "non-graduate" jobs but, conditional on getting a graduate job the returns seem stable. Our results are consistent across almost all degree subjects – the exception being maths and engineering where we find that, especially for women, there is a large increase in the proportion with maths and engineering degrees getting graduate jobs and that, conditional on this, the return is rising.
Funding Details: Great Britain. Department for Education and Skills (DfES)
Economic and Social Research Council
Type of material: Working Paper
Publisher: University College Dublin. Geary Institute
Keywords: Human capitalHigher educationCollege premium
Subject LCSH: Wages--College graduates--Great Britain
Wages--Effect of education on--Great Britain
College graduates--Supply and demand--Great Britain
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers

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