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CEP discussion paper
Graduate Returns, Degree Class Premia and Higher Education Expansion in the UK
Robin Naylor, Jeremy Smith and Shqiponja Telhaj November 2015
Paper No' CEPDP1392:
Full Paper (pdf)

JEL Classification: J31; J24; I23; D82

Tags: graduate returns; higher education participation; ability composition

We investigate the extent to which graduate returns vary according to the class of degree achieved by UK university students and examine changes over time in estimated degree class premia. Using a variety of complementary datasets for individuals born in Britain around 1970 and aged between 30 and 40, we estimate an hourly wage premium for a ‘good’ (relative to a ‘lower’) class of degree of 7% to 9%, implying a wide spread around the average graduate premium. We also estimate the premium for a good relative to a lower degree for different cohorts (those born between the mid-1960s and early-1980s) and find evidence that the premium for a good degree has risen over time as the proportions of cohorts participating in higher education have increased.

This paper has been published as:
Graduate returns, degree class premia and higher education expansion in the UK, Robin Naylor, Jeremy Smith and Shqiponja Telhaj, Oxford Economic Papers, Volume 68, Issue 2, April 2016