O próximo ISEG Research Seminar tem lugar no dia 30 de outubro, e conta com a participação de Monica Costa-Dias, que irá apresentar o artigo “Higher Education Sorting and Social Mobility“.
A sessão decorre das 13h00 às 14h00, no Anfiteatro 3 (Edifício Quelhas, piso 4).
Entrada livre.
Abstract:
Education is a main facilitator of social mobility, and higher education (HE) plays a major role in this. But while returns to HE are large, they also vary widely with the characteristics of programmes, students and how they align. This paper investigates the role of HE sorting to explain heterogeneity in returns. Using rich administrative data for England, we document that students from disadvantaged backgrounds are less likely to enrol in HE than equally skilled higher SES peers, particularly in the most selective programmes, and that low SES is associated with lower wages conditional on education and skills. To investigate the drivers of these gaps, we develop a life-cycle model of education, labour supply and earnings that allows for a rich characterisation of heterogeneity in the skills that students have and that different educational programmes provide. A key feature of our model is that students and programmes meet in a matching market in equilibrium, where sorting is determined. Exploiting geographical and cohort size variation, we can separate the preferences of students and programmes and identify the returns to heterogeneous programmes. Our model reproduces empirical patterns accurately. Using our model, we find that students from poorer backgrounds benefit more from investing in HE than better off students, but benefit less from enrolling in more selective programmes. We also find that low SES students are less willing to pay for a match that promises higher future earnings. However, students’ preferences cannot fully explain differences in HE sorting by SES. Rather, systematic differences in skills and admission rules that favour better off students also play a role. Counterfactual analysis of HE policies shows that demand side policies subsidising tuition fees or incentivising investments in STEM are insufficient to move the needle on social mobility; supply side policies could potentially be highly effective.