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

The 1973 Raising of the School Leaving Age in England and Wales has been used to identify returns to years’ schooling. However, the reform affected the proportion with qualifications, as well as schooling length. To shed light on whether the returns reflect extra schooling or qualifications, we exploit another institutional rule – the Easter Leaving Rule – to obtain unbiased estimates of the effect of qualifications. We find sizeable returns to academic qualifications – increasing the probability of employment by 40 percentage points. This is more than 70% of the estimated return based on RoSLA, suggesting that qualifications drive most – but not all – of the returns to education.Returns to education; RoSLA; qualifications

Gaining more education does lead to higher wages

Economists have long been asking whether increasing education leads to higher wages. In his recently published work, Matt Dickson exploits the relationship between smoking as a teenager and education choice to tease out the causal relationship. He finds that, across the distribution of education levels and the ability range, getting more education does result in a higher wage. For policy, this means that raising the participation age is a good move and – if properly enforced – should lead to tangible benefits for those affected

The Causal Effect of Education on Wages Revisited

This paper estimates the return to education using two alternative instrumental variable estimators: one exploits variation in schooling associated with early smoking behaviour, the other uses the raising of the minimum school leaving age. Each instrument estimates a 'local average treatment effect' and my motivation is to analyse the extent to which these differ and which is more appropriate for drawing conclusions about the return to education in Britain. I implement each instrument on the same data from the British Household Panel Survey, and use the over-identification to test the validity of my instruments. I find that the instrument constructed using early smoking behaviour is valid as well as being strong, and argue that it provides a better estimate of the average effect of additional education, akin to ordinary least squares but corrected for endogeneity. I also exploit the dual sources of exogenous variation in schooling to derive a further IV estimate of the return to schooling. I find the OLS estimate to be considerably downward biased (around 4.6%) compared with the IV estimates of 12.9% (early smoking), 10.2% (RoSLA) and 12.5% (both instruments).human capital, endogeneity, local average treatment effect

Employment, Family Union, and Childbearing Decisions in Great Britain

The paper investigates the relationship between work and family life in Britain. Using appropriate statistical techniques we estimate a five-equation model, which includes birth events, union formation, union dissolution, employment and non-employment events. The model allows for unobserved heterogeneity that is correlated across all five equations. We use information from the British Household Panel Survey, including the retrospective histories concerning work, union, and child bearing, to estimate this model. We obtain well-defined parameter estimates, including significant and correlated unobserved heterogeneity. We find that transitions in and out of employment for men are relatively independent of other transitions. In contrast, there are strong links between female employment, having children and union formation. By undertaking a detailed micro simulations analysis, we show that different levels of female labour force participation do not necessarily lead to large changes in fertility levels. Changes in union formation and fertility levels, on the other hand, do have a significant impact on employment rates.demographic transitions, marriage, divorce, birth, employment

Modelling poverty by not modelling poverty: An application of a simultaneous hazards approach to the UK

We pursue an economic approach to analysing poverty. This requires a focus on the variables that individuals can influence, such as forming or dissolving a union or having children. We argue that this indirect approach to modelling poverty is the right way to bring economic tools to bear on the issue. In our implementation of this approach, we focus on endogenous demographic and employment transitions as the driving forces behind changes in poverty. We construct a dataset covering event histories over a long window and estimate five simultaneous hazards with unrestricted correlated heterogeneity. The model fits the demographic and poverty data reasonably well. We investigate the important parameters and processes for differences in individuals' poverty likelihood. Employment, and particularly employment of disadvantaged women with children, is important.poverty dynamics, poverty transitions, simultaneous hazards

Raising the age of participation in education or training to 18 in Wales

In England, the compulsory age of participation in education or training was raised to 17 in 2013 and then 18 in 2015. In Wales, Scotland, and Northern Ireland, the school leaving age is 16. The idea of raising the age of participation in education or training is gaining traction in the Scottish context, as well as in Wales. The Wales Centre for Public Policy (WCPP) conducted research for the Welsh Government to explore the implications of pursuing this policy in Wales. The research considered how RPA might interact with ongoing reforms to school age and post-16 provision in Wales, and explored alternative policies which concentrate on reducing early school leaving, as opposed to policies that legally require young people to remain in learning for longer periods of time

Inequality in Access to Grammar Schools

There are 163 grammar schools in England, that select pupils based on their performance on a test at age 11 – the ‘11 plus’. Selective school systems increase inequalities in outcomes that persist into the labour market (Burgess et al., 2020). Children from low-and middle-income families are far less likely to attend grammar schools, even when comparing children with the same achievement at age 11. Children from poorer families face multiple barriers to accessing grammar schools: fewer educational resources at home, and less time to engage in home learning. Richer parents in selective areas are more likely to pay for tutoring and extra lessons, particularly in subjects that are covered in the ’11 plus’ such as English and maths. The likely widening attainment gap as a result of Covid-19 school closures will exacerbate inequalities in access to grammar schools, This raises serious questions about a ‘business as usual’ model for ‘11 plus’ tests in September 2020

Early, late or never? When does parental education impact child outcomes?

We study the intergenerational effects of parents’ education on their children’s educational outcomes. The endogeneity of parental education is addressed by exploiting the exogenous shift in education levels induced by the 1972 Raising of the School Leaving Age (RoSLA) from age 15 to 16 in England and Wales. Using data from the Avon Longitudinal Study of Parents and Children – a rich cohort dataset of children born in the early 1990s in Avon, England – allows us to examine the timing of impacts throughout the child’s life, from pre-school assessments through the school years to the final exams at the end of the compulsory schooling period. We also determine whether there are differential effects for literacy and numeracy. We find that increasing parental education has a positive causal effect on children’s outcomes that is evident at age 4 and continues to be visible up to and including the high stakes exams taken at age 16. Children of parents affected by the reform gain results just under 0.1 standard deviations higher than those whose parents were not impacted. The effect is focused on the lower educated parents where we would expect there to be more of an impact: children of these parents gaining results approximately 0.2 standard deviations higher. The effects appear to be broadly equal across numeracy and literacy test scores