Educational returns, ability composition and cohort effects: theory and evidence for cohorts of early-career UK graduates

Norman Ireland, Robin A. Naylor, Jeremy Smith and Shqiponja Telhaj

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: An increase over time in the proportion of young people obtaining a degree is likely to impact on the relative ability compositions (i) of graduates and non-graduates and (ii) across graduates with different classes of degree award. In a signalling framework, we examine the implications of this on biases across cohorts in estimates of educational returns. In an empirical analysis, we exploit administrative data on whole populations of UK university students for ten graduate cohorts to investigate the extent to which early labour market outcomes vary with class of degree awarded. Consistent with our theoretical model, we find that returns by degree class increased across cohorts during a period of substantial graduate expansion. We also corroborate the empirical findings with evidence from complementary data on graduate sample surveys.

Keywords: Educational Returns; College Wage Premium; Degree Class; Ability Bias; Statistical Discrimination (search for similar items in EconPapers)
JEL-codes: D82 I21 J24 J31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://eprints.lse.ac.uk/28608/ Open access version. (application/pdf)

Related works:
Working Paper: Educational Returns, ability composition and cohort effects: theory and evidence for cohorts of early-career UK graduates (2009)
Working Paper: Educational Returns, Ability Composition and Cohort Effects: Theory and Evidence for Cohorts of Early-Career UK Graduates (2009)
Working Paper: Educational Returns, ability composition and cohort effects: theory and evidence for cohorts of early-career UK graduates (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:28608

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