Estimating the human capital of graduates

Access to higher education is often an important stepping stone to a professional career and higher earnings, though these are not the only benefits of a degree.

This project will analyse the earnings of graduates over the first decade or so of their working lives. The aim is to better understand the full distribution of graduate earnings by institution attended and subject area, and consequently to understand the implications of improving access to higher education in terms of students’ future earnings. If different degrees from different institutions result in very different levels of earnings for students with similar pre university qualifications and from similar socio-economic backgrounds, then this might affect both student choice and policies designed to increase participation and improve social mobility. The project also has the potential to inform our understanding of the value, management and design of the student loan system.

Researchers will use administrative data from both the Student Loan Company (SLC) and Her Majesty’s Revenue and Customs (HMRC) to observe how the earnings of those who take out a loan from the SLC change through the years as they mature in the labour market. The analysis will produce estimates of the variation in earnings by institution type and subject for otherwise similar students. In this work there are a number of methodological issues that need to be considered and the limits to both the data and the subsequent analysis will be explored and made clear by the research team.

The lead researchers are:

The project is funded by the Nuffield Foundation and is independent of government.

More information about the project

 

First results from the project are likely to be available in the second half of 2015. Queries should be directed to Anna Vignoles or Jonathan Wood

The UK wage premium puzzle: how did a large increase in university graduates leave the education premium unchanged?

| Working Paper

Since the early-1990s the UK experienced an unprecedented increase in university graduates, but at the same time the age profile of the graduate premium remained largely unchanged across cohorts. This paper establishes the facts using a detailed analysis of micro-data on wage and employment patterns over the last two decades, benchmarked against the US economy. We then show that the stability of the age profile in the premium across different birth cohorts is unlikely to be explained by either composition changes or selection on unobservables.

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Human capital and inequality in the United Kingdom

| Journal Articles

Human capital and inequality in the United Kingdom

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