Research in Higher Education

, Volume 58, Issue 8, pp 843–878 | Cite as

Who Benefits Most from a University Degree?: A Cross-National Comparison of Selection and Wage Returns in the US, UK, and Germany

  • Renee Reichl LuthraEmail author
  • Jennifer Flashman


Recent research on economic returns to higher education in the United States suggests that those with the highest wage returns to a college degree are least likely to obtain one. We extend the study of heterogeneous returns to tertiary education across multiple institutional contexts, investigating how the relationship between wage returns and the propensity to complete a degree varies by the level of expansion, differentiation, and cost of higher education. Drawing on panel data and matching techniques, we compare findings from the US with selection into degree completion in Germany and the UK. Contrary to previous studies, we find little evidence for population level heterogeneity in economic returns to higher education.


Selection Cross-national comparison Returns to higher education Wage returns 



This research was supported by a Grant from the John Fell Fund at the University of Oxford, by a Grant from the British Academy, and the Economic and Social Research Council [Grant No. ES/L009153/1]. Previous versions of this article were presented at the European Population Conference in 2012 and the Population Association of America meetings in 2013. We would like to thank Mike Brewer, Tom DiPrete, and Eric Grodsky for their comments and advice on previous drafts. This Project was completed with research assistance from Gwendolyn Blossfeld, Beatriz Diaz Cuervo, and Sarah Wilkins Laflamme.


  1. Ainsworth, J. W., & Roscigno, V. J. (2005). Stratification, school-work linkages and vocational education. Social Forces, 84(1), 257–284.CrossRefGoogle Scholar
  2. Arum, R., & Roksa, J. (2011). Academically adrift: Limited learning on college campuses. Chicago: University of Chicago Press.Google Scholar
  3. Bar Haim, E., & Shavit, Y. (2013). Expansion and inequality of educational opportunity: A comparative study. Research in Social Stratification and Mobility, 31, 22–31. doi: 10.1016/j.rssm.2012.10.001.CrossRefGoogle Scholar
  4. Beattie, I. R. (2002). Are all” adolescent econometricians” created equal? Racial, class, and gender differences in college enrollment. Sociology of Education, 75(1), 19–43.CrossRefGoogle Scholar
  5. Becker, G. S. (1994). Human capital: A theoretical and empirical analysis, with special reference to education. Chicago: University of Chicago Press.Google Scholar
  6. Becker, R., & Hecken, A. E. (2009). Why are working-class children diverted from universities?—An empirical assessment of the diversion thesis. European Sociological Review, 25(2), 233–250. doi: 10.1093/esr/jcn039.CrossRefGoogle Scholar
  7. Becker, S. O., & Ichino, A. (2002). Estimation of average treatment effects based on propensity scores. Stata Journal, 2(4), 358–377.Google Scholar
  8. Blossfeld, H. -P., & Stockmann, R. (1999). The german dual system in comparative perspective. International Journal of Sociology, 28, 3–28.CrossRefGoogle Scholar
  9. Blossfeld, H. -P., & Timm, A. (2003). Who marries whom?: educational systems as marriage markets in modern societies (Vol. 12). New York: Springer Science & Business Media.Google Scholar
  10. Bourdieu, P., & Passeron, J. -C. (1990). Reproduction in education, society and culture (Vol. 4). London: Sage.Google Scholar
  11. Brand, J. E., & Xie, Y. (2010). Who benefits most from college? Evidence for negative selection in heterogeneous economic returns to higher education. American Sociological Review, 75(2), 273–302. doi: 10.1177/0003122410363567.CrossRefGoogle Scholar
  12. Breen, R., Choi, S., & Holm, A. (2015). Heterogeneous causal effects and sample selection bias. Sociological Science, 2, 351–369. doi: 10.15195/v2.a17.CrossRefGoogle Scholar
  13. Breen, R., & Goldthorpe, J. H. (1997). Explaining educational differentials towards a formal rational action theory. Rationality and society, 9(3), 275–305.CrossRefGoogle Scholar
  14. Buchmann, C., DiPrete, T. A., & McDaniel, A. (2008). Gender inequalities in education. Annual Review of Sociology, 34, 319–337.CrossRefGoogle Scholar
  15. Card, D. (1999). The causal effect of education on earnings. In O. Ashenfelter & D. Card (Eds.), Handbook of labor economics (Vol. 3, pp. 1801–1863). New york: North Holland.Google Scholar
  16. Card, D., & Lemieux, T. (2001). Can falling supply explain the rising return to college for younger men? A cohort-based analysis. The Quarterly Journal of Economics, 116(2), 705–746. doi: 10.1162/00335530151144140.CrossRefGoogle Scholar
  17. Carneiro, P., Heckman, J. J., & Vytlacil, E. J. (2011). Estimating marginal returns to education. American Economic Review, 101(6), 2754–2781. doi: 10.1257/aer.101.6.2754.CrossRefGoogle Scholar
  18. Carnevale, A. P., Rose, S. J., & Cheah, B. (2011). The college payoff: Education, occupations, Lifetime Earnings. Washington D.C.: Georgetown University Center on Education and the Workforce.Google Scholar
  19. Cheung, S. Y., & Egerton, M. (2007). Great Britain: Higher education expansion and reform—changing educational inequalities. In Y. Shavit, R. ARum, & A. Gamoran (Eds.), Stratification in higher education: A comparative study. Standford: Stanford University Press.Google Scholar
  20. Dearden, L., McGranahan, L., & Sianesi, B. (2004). Returns to education for the’marginal learner’: evidence from the BCS70. London School of Economics and Political Science: Centre for the Economics of Education.Google Scholar
  21. Deil-Amen, R., & Turley, R. L. (2007). A review of the transition to college literature in sociology. Teachers College Record, 109(10), 2324–2366.Google Scholar
  22. Dex, S. (1995). The reliability of recall data: A literature review. Bulletin de Methodologie Sociologique, 49, 58–89.CrossRefGoogle Scholar
  23. Douglas, J. W. B. (1964). The home and the school; A study of ability and attainment in the primary school (Studies in society). London: Macgibbon & Kee.Google Scholar
  24. Ganzeboom, H. B. G., & Treiman, D. J. (1996). Internationally comparable measures of occupational status for the 1988 International Standard Classification of Occupations. Social Science Research, 25(3), 201–239.CrossRefGoogle Scholar
  25. Goebel, J. (Ed.). (2015). Documentation on Biography and Life History Data for SOEP v30 (SOEP Survey Papers 266: Series D). Berlin: DIW/SOEP.Google Scholar
  26. Grodsky, E., & Jones, M. T. (2007). Real and imagined barriers to college entry: Perceptions of cost. Social Science Research, 36(2), 745–766. doi: 10.1016/j.ssresearch.2006.05.001.CrossRefGoogle Scholar
  27. Hanushek, E. A., & W ößmann, L. (2006). Does educational tracking affect performance and inequality? Differences- in-differences evidence across countries*. The Economic Journal, 116(510), C63–C76. doi: 10.1111/j.1468-0297.2006.01076.x.CrossRefGoogle Scholar
  28. Hauser, R. M., Tsai, S. L., & Sewell, W. H. (1983). A model of stratification with response error in social and psychological variables. Sociology of Education, 56(1), 20–46.CrossRefGoogle Scholar
  29. Heckman, J. J., Urzua, S., & Vytlacil, E. (2006). Understanding instrumental variables in models with essential heterogeneity. The Review of Economics and Statistics, 88(3), 389–432.CrossRefGoogle Scholar
  30. Heller, D. E. (1997). Student price response in higher education: An update to Leslie and Brinkman. Journal of Higher Education, 68(6), 624–659.Google Scholar
  31. Henderson, D. J., Polachek, S. W., & Wang, L. (2011). Heterogeneity in schooling rates of return. Economics of Education Review, 30(6), 1202–1214. doi: 10.1016/j.econedurev.2011.05.002.CrossRefGoogle Scholar
  32. Hillmert, S., & Jacob, M. (2003). Social inequality in higher education. Is vocational training a pathway leading to or away from university? European Sociological Review, 19(3), 319–334. doi: 10.1093/esr/19.3.319.CrossRefGoogle Scholar
  33. Hilmer, M. J., & Hilmer, C. E. (2012). On the relationship between student tastes and motivations, higher education decisions, and annual earnings. Economics of Education Review, 31(1), 66–75. doi: 10.1016/j.econedurev.2011.09.004.CrossRefGoogle Scholar
  34. Hout, M. (2012). Social and economic returns to college education in the United States. Annual Review of Sociology. doi: 10.1146/annurev.soc.012809.102503.Google Scholar
  35. Hunter, J. E., Crosson, J. J., & Friedman, D. H. (1985). The validity of the Armed Services Vocational Aptitude Battery (ASVAB) for civilian and military job performance. Washington, DC: Department of Defense.Google Scholar
  36. Kalleberg, A. L. (2000). Nonstandard employment relations: Part-time, temporary and contract work. Annual Review of Sociology, 26, 341–365.CrossRefGoogle Scholar
  37. Lau, L. K. (2003). Institutional factors affecting student retention. Education, 124(1), 126–136.Google Scholar
  38. Long, M. C. (2010). Changes in the returns to education and college quality. Economics of Education Review, 29(3), 338–347.CrossRefGoogle Scholar
  39. Lucas, S. R. (2001). Effectively maintained inequality: Education transitions, track mobility, and social background effects 1. American Journal of Sociology, 106(6), 1642–1690.CrossRefGoogle Scholar
  40. Lunt, M. (2013). PBALCHK: Checking covariate balance. Accessed 14 Mar 2017.
  41. Malamud, O., & Pop-Eleches, C. (2011). School tracking and access to higher education among disadvantaged groups. Journal of Public Economics, 95(11–12), 1538–1549. doi: 10.1016/j.jpubeco.2011.03.006.CrossRefGoogle Scholar
  42. McLanahan, S., & Sandefur, G. D. (1994). Growing up with a single parent: What hurts, what helps. Cambridge: Harvard University Press.Google Scholar
  43. Meek, V. L., Goedegebuure, L., Kivinen, O., & Rinne, R. (1996). The mockers and mocked: Comparative perspectives on differentiation, convergence, and diversity in higher education. Oxford: IAU Press.Google Scholar
  44. OECD (2011). Education at a glance 2011: OECD indicators. OECD Publishing. doi: 10.1787/eag-2011-en
  45. Paterson, L., & Iannelli, C. (2007). Social class and educational attainment: A comparative study of England, Wales, and Scotland. Sociology of Education, 80(4), 330–358. doi: 10.1177/003804070708000403.CrossRefGoogle Scholar
  46. Perna, L. W., & Titus, M. A. (2005). The relationship between parental involvement as social capital and college enrollment: an examination of racial/ethnic group differences. The Journal of Higher Education, 76(5), 485–518.CrossRefGoogle Scholar
  47. Quinn, J. (2013). Drop-out and completion in higher education in Europe among students from under-represented groups. Network of Experts on Social aspects of Education and Training (NESET). European Union: European Commission.Google Scholar
  48. Raftery, A. E., & Hout, M. (1993a). Maximally maintained inequality: Expansion, reform, and opportunity in Irish education, 1921–1975. Sociology of Education, 66, 41–62.CrossRefGoogle Scholar
  49. Raftery, A. E., & Hout, M. (1993b). Maximally maintained inequality: Expansion, reform, and opportunity in Irish education, 1921–1975. Sociology of Education, 66(1), 41–62.CrossRefGoogle Scholar
  50. Shavit, Y., Arum, R., Gamoran, A., & Menachem, G. (2007). Stratification in higher education: A comparative study. Standford: Stanford University Press.Google Scholar
  51. Shavit, Y., & Müller, W. (1998). From school to work: a comparative study of educational qualifications and occupational destinations. Oxford: Clarendon Press.Google Scholar
  52. Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374.CrossRefGoogle Scholar
  53. Tam, T., & Jiang, J. (2014). The making of higher education inequality: How do mechanisms and pathways depend on competition? American Sociological Review, 79(4), 807–816. doi: 10.1177/0003122414534437.CrossRefGoogle Scholar
  54. Van de Werfhorst, H. G., & Mijs, J. J. B. (2010). Achievement inequality and the institutional structure of educational systems: A comparative perspective. In K. S. Cook, & D. S. Massey (Eds.), Annual Review of Sociology, Vol 36 (Vol. 36, pp. 407–428, Annual Review of Sociology). Palo Alto: Annual Reviews.Google Scholar
  55. Willis, R. J., & Rosen, S. (1978). Education and self-selection. Massachusetts: National Bureau of Economic Research Cambridge.CrossRefGoogle Scholar
  56. Xie, Y., Brand, J. E., & Jann, B. (2012). Estimating heterogeneous treatment effects with observational data. Sociological Methodology, 42(1), 314–347.CrossRefGoogle Scholar
  57. Zhou, X., & Xie, Y. (2016). Heterogeneous treatment effects in the presence of self-selection: A propensity score perspective. doi: 10.2139/ssrn.2905464

Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Department of SociologyUniversity of EssexColchesterUK
  2. 2.Yammer MicrosoftSan FranciscoUSA

Personalised recommendations