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Returns to Higher Education - Graduate and Discipline Premiums

Yu Zhu and Lei Xu ()
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Lei Xu: Loughborough University

No 15299, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper reviews and evaluates progress in recent research on the graduate premium in general as well as the differential graduate premiums by discipline, accounting for higher-education choice by individuals under substantial uncertainty. The contribution of this review, relative to previous reviews, is the collection of a wider variety of evidence that all bears on a relatively narrow issue, namely the graduate and discipline premiums, allowing for selection into undergraduate degree and degree subjects which include the option value of undertaking postgraduate degrees. The issue of subject-job match quality after graduation is only treated as a sensitivity check to the main results, due to concerns with self-selection. We emphasize that the sizes of the graduate and discipline premiums are context-specific, especially regarding how HE is structured and financed in a country, without going into details. Much higher weight is placed on the most up-to-date research that sheds light on the causal effects of higher-education and subject choice, and the conclusions are heavily driven by the best evidence rather than by consensus built around correlations. This paper ends with a short summary of the empirical evidence and a brief discussion of possible areas for future research.

Keywords: graduate premium; discipline premiums; higher-education choice; subject-job match; causal effects (search for similar items in EconPapers)
JEL-codes: I23 I24 I26 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2022-05
New Economics Papers: this item is included in nep-edu and nep-lab
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Forthcoming - Forthcoming as a book chapter in the Springer Nature Handbook of Labor, Human Resources and Population Economics

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