Essays in Labour Economics

This thesis studies the interactions between parental background, education and later life outcomes. The first chapter analyses differences across England in the early career earnings of children from low-income families, and the role educational differences play in explaining this variation. Children from lowincome families who grew up in the lowest mobility areas are expected to end up around fifteen percentiles lower in the earnings distribution at age 28 than similar children from the highest mobility areas. Differences in educational achievement across areas can explain 25% of this variation for men, and more than 45% for women. This indicates that education policy can potentially play an important role in equalising opportunities for children from low-income families. A second chapter estimates the impact of different higher education degrees on earnings, controlling for the impact of parental background and prior attainment. It finds substantial variation in earnings returns within subjects and across universities with very similar selectivity levels, suggesting degree choices matter a lot for later-life earnings. These returns are poorly correlated with observable degree characteristics, implying students have to make potentially life changing degree choices based on limited information. The third chapter estimates “mobility rates” for all English universities, subjects and degrees, by combining access rates and labour market success of students from low-income families. It finds that less selective institutions outperform the most prestigious universities on this measure. Mobility rates are mostly uncorrelated with average earnings returns, which implies that any policies which restrict funding or access to courses with lower earnings returns can have negative implications for mobility. The final chapter looks at the intergenerational impact of parental unemployment. It finds a strong and persistent negative impact of paternal unemployment on the educational achievement and home ownership rates of women, though not of men

Income contingent student loan design: Lessons from around the world

The use of income contingent loans (ICLs) for Higher Education (HE) students is becoming increasingly prevalent around the world. Using a model of simulated lifetime earnings for graduates, in this paper we show that the impact of the design of ICLs on the magnitude and distribution of government subsidies is highly dependent on the institutional setting. In particular, the average debt level as a share of average earnings is a key determinant of the impact of various policy parameters. The variance of earnings within the graduate population is also shown to be a determinant of ICL taxpayer costs. This paper is the first comparative exercise of impact of the design of ICLs in different settings, and the findings are highly relevant to countries looking to implement or reform their student loan systems