Critical Business Enquiry Project (UMCD9W-40-3)
1.1 Wage Returns to schooling
Numerous studies have suggested that there is a strong positive correlation between additional years of schooling undertaken and average wage returns (see Card 1999, 2001, Kane et al 1999, Kirby and Riley 2008, Silles 2007 and Park 1996). However, more recent UK research has focused upon returns related to the type of qualifications attained (Croucher et al, 2006). It has been found that most typically there are higher wage returns to academic qualifications than that of vocational qualifications whereas low level vocational qualifications bring little return - (see Dearden et al, 2002 and Sianesi, 2003). Suggesting then that low level vocational qualifications are in fact not worth pursuing and instead it is more beneficial to pursue an academic qualification.
However, other studies have challenged the perception that low level vocational qualifications are of no use. Dearden et al (2002) used data from the 1991 National Child Development Study and also the labour force survey from 1998, and found that the gap between academic and vocational qualifications reduced somewhat when the amount of time taken to acquire a qualification is controlled. For example vocational courses generally take much less time to complete, therefore giving the worker the time advantage in the labour market, although this seems a common sense finding, it is important because it had been overlooked in many previous studies, which can cause resulting errors.
As new findings are published about returns related to the type of qualifications attained, new policy implications are being highlighted. A more recent study by Mcintosh (2006) also used the labour force survey and his fin...
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... residence, quality childcare and a better quality school (Blanden, 2004). However it’s important to note that this is not the case for the whole population, as a child could live in a much lower income family and still gain the same levels of support and guidance from their parents. Given this however, over the past few decades even though participation in high levels of education has increased for someone from a more disadvantaged family background, the level of participation is still much less than those who have been brought up in a stable, above average annual wage household.
Parental Education has also been shown to have a positive effect on children’s return to education see (Oreopoulos et al 2003, Chevalier 2004, Black et al 2005 and Maurin and McNally 2008). All these studies aimed to find the causal impact of the parents education on the child’s outcomes.