Is More Education Good For You?

Just looking through some recent research summaries online and found this interesting report on the effects of increasing the ages for compulsory education. I know it is not the full story (I don't suppose any researcher could afford the level of commitment and finance needed for such a study) but at least it is not a knee-jerk and non-reflective response to the idea of extra education.

New research presented this week at the Royal Economic Society Conference from our Department of Social & Policy Science questions the commonly held belief that more education is 'good for you' and results in higher wages and better life outcomes.

Previous work on this question generally suggested that the effect of 1972 school leaving age reform was positive; more recent estimates have challenged the magnitude of such effects suggesting a downward revision from 15% to 5%. But none of these studies examined the early parts of the life-cycle, concentrating only on the later working years.

But when comparing the lifetime wage trajectories of individuals who were born shortly before and shortly after the reform, the authors find that those with additional education suffered significantly lower wages in the first part of their working lives. On average, men with additional education suffered lower earnings until they were aged mid-30s. Post mid-30s wage differentials were non-significant.

Importantly, the authors argue that this negative effect is induced by the loss of early labour market experience and that previous studies did not adequately deal with this phenomenon. When correcting for this, the authors identify that the effect of education remains positive and significant.

Dr Buscha added: "Our research shows that it is important that when designing school leaving age reforms, such as the recent Raising of the Participation Age, that children are not only made to learn useful skills during this additional education but that practical arrangements are made to smooth integration into the labour market such that the negative effects of lost work experience are kept to a minimum."

Read more at: http://phys.org/news/2016-03-wont-necessarily-richer-reveals.html#jCp