The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK

Ian Walker () and Yu Zhu

No 1627, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides findings from the UK Labour Force Surveys from 1996 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 significant 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 for men, and 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.

Keywords: college premium; higher education; human capital (search for similar items in EconPapers)
JEL-codes: I20 J30 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-06
New Economics Papers: this item is included in nep-edu, nep-eec, nep-lab and nep-ltv
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Citations: View citations in EconPapers (24)

Published - published in: Scandinavian Journal of Economics, 2008, 110 (4), 695-709

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