Three Essays in the Economics of Higher Education

Abstract

This thesis presents three empirical analyses in the economics of Higher Education within the United Kingdom.

The first analysis evaluates the impact of student funding reforms on participation and course choice, through the use of a difference-in-differences strategy with heterogeneous treatment effects. The results show that students who received the largest increase in study costs were less likely to move further away and also more likely to study a subject with lower graduate wage premia due to the significant reduction in the risk of investing in higher education. Students who received the largest increase in up-front financial support were more likely to attend a university further away.

The second question addresses whether undergraduate subject choice is affected by changes in the expected benefits and opportunity costs of investing in HE through variation in the labour market. Students who reside in areas of high unemployment are found to be less likely to choose subjects with the largest graduate wage and employment premia. This suggests that students may be afraid of failure in challenging labour markets and instead choose to study subjects with a greater chance of success. However, lower socioeconomic status students are more likely to study subjects with the highest graduate wage and employment premia. This suggests that the students who may be the most aware of the costs, are also the most aware of the benefits.

Finally, the third analysis investigates whether students who are socioeconomically disadvantaged incur a further penalty in terms of degree attainment. The results show that the most disadvantaged students outperform their advantaged counterparts. This may be due to pre-university attainment being an imperfect measure of ability in the most disadvantaged students, or that students who have had to overcome the most challenges to attend university are better-equipped and more determined to succeed.