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

Abstract

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.

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Change history

  • 03 June 2017

    An erratum to this article has been published.

Notes

  1. 1.

    Available from authors on request.

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Acknowledgements

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.

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Correspondence to Renee Reichl Luthra.

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The original version of this article was revised: The error in author group and affiliation have been corrected. Yammer Microsoft is the affiliation of the second author.

An erratum to this article is available at https://doi.org/10.1007/s11162-017-9461-3.

Appendices

Appendix 1

See Tables 6 and 7.

Table 6 Estimated relationship between college completion and log wages under the assumption of homogeneity, NLSY
Table 7 Effects of college completion on log wages by propensity score strata, NLSY

Appendix 2

See Table 8.

Table 8 Comparing homogeneous and heterogeneous returns in GSOEP and NEPS

Appendix 3

See Tables 9 and 10.

Table 9 Heterogeneous effects of a university degree, including controls for marriage and children
Table 10 Homogeneous and heterogeneous effects of a university degree on earnings, including 0 wages and self employed

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Luthra, R.R., Flashman, J. Who Benefits Most from a University Degree?: A Cross-National Comparison of Selection and Wage Returns in the US, UK, and Germany. Res High Educ 58, 843–878 (2017). https://doi.org/10.1007/s11162-017-9451-5

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Keywords

  • Selection
  • Cross-national comparison
  • Returns to higher education
  • Wage returns