1. Economics in the Real World Popn and YRFT workers, '99Popn TotalEmp’d% YRFT emp'd% YRFT med $ 21 to 64 years159m117m73.586m5432,717 Earnings in the US (2000 Census data) ESRC Festival of Social Science, CAGE, 6/11/12 1 Let’s consider how employment and median earnings vary by education level... (and then by age as well)... Source: https://www.census.gov/hhes/www/income/data/earnings/call1usboth.html

2. ESRC Festival of Social Science, CAGE, 6/11/12 2 Popn and YRFT workers, 1999, aged 21-64total no.dist %Employed%YRFT emp'd% YRFT med $ Not a high school graduate19,543,6851210,109,190526,528,4103321,332 High school graduate44,071,3902831,150,5507123,102,8455227,351 Some college48,530,1603137,571,0907727,232,6105631,988 Bachelor degree26,875,4351722,288,7908317,008,0956342,877 Advanced degree13,901,140911,986,215869,319,4106755,242 Higher employment rate for those with more education Higher median earnings for those with a degree: College Wage Prem=57% 17% have a bachelor degree

3. ESRC Festival of Social Science, CAGE, 6/11/12 3 $

4. 4 Earnings rise with Education for all age groups...... but especially in later years. “The Jam is thicker tomorrow.” $

5. Previously, we said that the (raw) college wage premium in the US is 57%. What is the evidence for the UK? Blundell et al. (EJ, 2000): 12% men, 34% women (rel. to 2+ A-levels, aged 33 in 1991). Naylor and Smith: circa 15% for both men and women (rel. to 2+ A-levels, aged 30 in 2000), but... Substantial variation. Eg by academic attainment; ca12% for 2.2 or below, ca18% for 2.1 or above. ESRC Festival of Social Science, CAGE, 6/11/12 5

6. Conclusion HE is an expensive investment But it’s worth it...... and the more so the more effort you put in to it. PS Do ‘shop around’! Robin Naylor Department of Economics University of Warwick ESRC Festival of Social Science, CAGE, 6/11/12 6