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

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Ireland, Norman J., Naylor, Robin, Smith, Jeremy and Telhaj, Shqiponje (2009) Educational returns, ability composition and cohort effects: theory and evidence for cohorts of early-career UK graduates. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.906).

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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.

Item Type: Working or Discussion Paper (Working Paper)
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): Wages -- Effect of education on, Wages -- College graduates, Cohort analysis, Degrees, Academic
Series Name: Warwick economic research papers
Publisher: University of Warwick, Department of Economics
Place of Publication: Coventry
Official Date: 5 May 2009
Dates:
DateEvent
5 May 2009Published
Number: No.906
Number of Pages: 41
Institution: University of Warwick
Status: Not Peer Reviewed
Access rights to Published version: Open Access (Creative Commons)

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