Rates of Return to Degrees across British Regions

Abstract

Earlier papers have found considerable heterogeneity in the returns to degrees in relation to subjects of study, degree classification and higher education institution. In this paper we examine heterogeneity of returns across British regions using the Labour Force Survey. We find substantial regional variations in the financial rewards available to graduates, with much higher returns in London and the South East than elsewhere. Adjusting for regional differences in the cost-of-living narrows such differences considerably. Decompositional analysis suggests that coefficient effects dominate composition effects, consistent with agglomeration effects being important.