IDEAS home Printed from https://ideas.repec.org/a/eee/ecoedu/v30y2011i6p1167-1176.html
   My bibliography  Save this article

What determines the return to education: An extra year or a hurdle cleared?

Author

Listed:
  • Dickson, Matt
  • Smith, Sarah

Abstract

The 1973 Raising of the School Leaving Age from 15 to 16 has been used to identify returns to years’ schooling. However, because the first set of “high stakes” exams are taken in the UK at age 16, the reform affected the proportion with qualifications, as well as schooling length. In order to shed light on whether the returns reflect the extra length of schooling or the increase in qualifications, we exploit another institutional rule – the Easter Leaving Rule – which we argue only affected the probability of obtaining qualifications (and not the length of schooling). We find sizeable returns to academic qualifications – increasing the probability of employment by 40% points – and our results suggest that qualifications drive most of the returns to education.

Suggested Citation

  • Dickson, Matt & Smith, Sarah, 2011. "What determines the return to education: An extra year or a hurdle cleared?," Economics of Education Review, Elsevier, vol. 30(6), pages 1167-1176.
    • Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1167-1176
    DOI: 10.1016/j.econedurev.2011.05.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0272775711000744
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econedurev.2011.05.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages 499-517, November.
    2. Del Bono, Emilia & Galindo-Rueda, Fernando, 2006. "The long term impacts of compulsory schooling: evidence from a natural experiment in school leaving dates," ISER Working Paper Series 2006-44, Institute for Social and Economic Research.
    3. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2011. "Too Young to Leave the Nest? The Effects of School Starting Age," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 455-467, May.
    4. Paul J. Devereux & Robert A. Hart, 2010. "Forced to be Rich? Returns to Compulsory Schooling in Britain," Economic Journal, Royal Economic Society, vol. 120(549), pages 1345-1364, December.
    5. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics Department Working Paper Series n540195, Department of Economics, National University of Ireland - Maynooth.
    6. Silles, Mary A., 2009. "The causal effect of education on health: Evidence from the United Kingdom," Economics of Education Review, Elsevier, vol. 28(1), pages 122-128, February.
    7. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003. "Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS," IFS Working Papers W03/20, Institute for Fiscal Studies.
    8. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
    9. Claire Crawford & Lorraine Dearden & Costas Meghir, 2010. "When you are born matters: the impact of date of birth on educational outcomes in England," IFS Working Papers W10/06, Institute for Fiscal Studies.
    10. Robertson, Erin, 2011. "The effects of quarter of birth on academic outcomes at the elementary school level," Economics of Education Review, Elsevier, vol. 30(2), pages 300-311, April.
    11. Julien Grenet, 2013. "Is Extending Compulsory Schooling Alone Enough to Raise Earnings? Evidence from French and British Compulsory Schooling Laws," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 176-210, January.
    12. Lorraine Dearden, 1999. "Qualifications and earnings in Britain: how reliable are conventional OLS estimates of the returns to education?," IFS Working Papers W99/07, Institute for Fiscal Studies.
    13. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2005. "Evaluating the effect of education on earnings: models, methods and results from the National Child Development Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 473-512, July.
    14. Devereux, Paul J. & Fan, Wen, 2011. "Earnings returns to the British education expansion," Economics of Education Review, Elsevier, vol. 30(6), pages 1153-1166.
    15. Del Bono, Emilia & Galindo-Rueda, Fernando, 2004. "Do a Few Months of Compulsory Schooling Matter? The Education and Labour Market Impact of School Leaving Rules," IZA Discussion Papers 1233, Institute of Labor Economics (IZA).
    16. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
    17. Damon Clark & Heather Royer, 2010. "The Effect of Education on Adult Health and Mortality: Evidence from Britain," NBER Working Papers 16013, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tony Beatton & Michael P. Kidd & Matteo Sandi, 2020. "School indiscipline and crime," CEP Discussion Papers dp1727, Centre for Economic Performance, LSE.
    2. Dolton, Peter & Sandi, Matteo, 2017. "Returning to returns: revisiting the British education evidence," LSE Research Online Documents on Economics 85152, London School of Economics and Political Science, LSE Library.
    3. Dolton, Peter & Sandi, Matteo, 2017. "Returning to returns: Revisiting the British education evidence," Labour Economics, Elsevier, vol. 48(C), pages 87-104.
    4. Franz Buscha & Matt Dickson, 2018. "A Note on the Wage Effects of the 1972 Raising of the School Leaving Age in Scotland and Northern Ireland," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(5), pages 572-582, November.
    5. Paul J. Devereux & Robert A. Hart, 2010. "Forced to be Rich? Returns to Compulsory Schooling in Britain," Economic Journal, Royal Economic Society, vol. 120(549), pages 1345-1364, December.
    6. Mario Fiorini & Katrien Stevens, 2021. "Scrutinizing the Monotonicity Assumption in IV and fuzzy RD designs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(6), pages 1475-1526, December.
    7. Clementine Garrouste & Mathilde Godard, 2016. "The Lasting Health Impact of Leaving School in a Bad Economy: Britons in the 1970s Recession," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 70-92, November.
    8. Michael Geruso & Heather Royer, 2018. "The Impact of Education on Family Formation: Quasi-Experimental Evidence from the UK," NBER Working Papers 24332, National Bureau of Economic Research, Inc.
    9. Daniel Gray & Alberto Montagnoli & Mirko Moro, 2017. "Does education improve financial outcomes? Quasi-experimental evidence from Britain," Working Papers 2017010, The University of Sheffield, Department of Economics.
    10. Buscha, Franz & Dickson, Matt, 2015. "The Wage Returns to Education over the Life-Cycle: Heterogeneity and the Role of Experience," IZA Discussion Papers 9596, Institute of Labor Economics (IZA).
    11. Janke, Katharina & Johnston, David W. & Propper, Carol & Shields, Michael A., 2018. "The Causal Effect of Education on Chronic Health Conditions," IZA Discussion Papers 11353, Institute of Labor Economics (IZA).
    12. Devereux, Paul J. & Fan, Wen, 2011. "Earnings returns to the British education expansion," Economics of Education Review, Elsevier, vol. 30(6), pages 1153-1166.
    13. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Eff ects and Skill Formation," Ruhr Economic Papers 0446, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    14. Giorgio Brunello & Margherita Fort & Guglielmo Weber, 2009. "Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," Economic Journal, Royal Economic Society, vol. 119(536), pages 516-539, March.
    15. Lepinteur, Anthony & Nieto, Adrìan, 2021. "All about the money ? The gendered effect of education on industrial and occupational sorting," CEPREMAP Working Papers (Docweb) 2109, CEPREMAP.
    16. Ragui Assaad & Abdurrahman Aydemir & Meltem Dayioglu & Guray Kirdar, 2016. "Returns to Schooling in Egypt," Working Papers 1000, Economic Research Forum, revised May 2016.
    17. Judith M. Delaney & Paul J. Devereux, 2019. "More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle," Journal of Labor Economics, University of Chicago Press, vol. 37(1), pages 101-137.
    18. Gehrsitz, Markus & Williams, Jr., Morgan C., 2024. "The Effects of Compulsory Schooling on Health and Hospitalization over the Life Cycle," IZA Discussion Papers 17050, Institute of Labor Economics (IZA).
    19. James, Jonathan & Vujić, Sunčica, 2019. "From high school to the high chair: Education and fertility timing," Economics of Education Review, Elsevier, vol. 69(C), pages 1-24.
    20. Matt Dickson & Paul Gregg & Harriet Robinson, 2016. "Early, Late or Never? When Does Parental Education Impact Child Outcomes?," Economic Journal, Royal Economic Society, vol. 126(596), pages 184-231, October.

    More about this item

    Keywords

    Returns to education; RoSLA; Qualifications;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1167-1176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/econedurev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.