Abstract/Summary

This thesis presents three chapters, each addressing the key variables affecting the wage premium of graduates. The first chapter gives the heterogeneity analysis of differences in gender wage premium. The second chapter explores the impact of the financial crisis on the evolution of new graduates’ wage premiums. Lastly, the third chapter answers how the graduate wage premium varies with individuals' skill level and family background and how individual achievement score at school level and family background influence degree subject choices. The first chapter starts with the understanding that there has been a gender wage premium difference in the UK labour market and men are likely to earn a higher wage premium compared to women. We analyse this difference in-depth and differentiate among subject choices, part-time and full-time workers, white and non-white ethnicity individuals, and London based and non-London based individuals. The results show that graduates in medicine, maths and engineering earn the highest premium compared to other subjects for both part-time and full-time workers. Further heterogeneity analysis shows that being employed in London and coming from ethnic minority backgrounds also significantly affect the wage premium. The second chapter is based on the understanding that there has been a significant impact of the financial crisis, 2008/09 on the labour market of the UK. We in this chapter explore how the financial crisis of 2008/09 had an impact on the wage premium of new graduates and on the probability of individuals securing a professional job. We cannot categorically say that the financial crisis had an impact on the wage premium or on the likelihood of new graduates securing a professional job. Lastly, literature has shown that there has been a significant effect of cognitive/non-cognitive skills and family background on the subject choices made at degree level and (the individuals’) wage premium. This chapter presents significant evidence that in the UK, the graduate wage premium is impacted by (the individuals’) numeracy and literacy scores at Key stage 3 and family background. We have also depicted that the Key Stage 3 achievement score and family background has a significant impact on the subject choices made by individuals at degree level.