Event Details

Economics Seminar

Abstract: The undergraduate Student Number Cap (SNC) for higher education institutions (HEIs) in England was formally abolished in 2015, while admissions to Scottish HEIs remain capped. Using utilising tailored individual-level Higher Education Statistical Agency (HESA) administrative data and applying quintile matching and Ordinary Least Squares regressions, we first show that the SNC removal increased under-matching among low-SES students, who ended up at universities and on degree courses of lower academic quality. Leveraging this natural experiment, we then implement a quasi-experimental design to identify the impact of the higher education expansion on graduate earnings. While average treatment effects are statistically insignificant, heterogenous effect difference-in-differences (DID) analyses indicate considerable disciplinary heterogeneities. Compared to Core STEM graduates, the SNC reform resulted in wage penalty of 3.4 percentage points for graduates in Other Social Sciences, Arts, and Humanities (OSSAH). Penalties related to socioeconomic backgrounds concentrated among graduates with reported disabilities (5.9%). Distributional analysis suggests the OSSAH wage penalties induced by the SNC reform are more pronounced at higher quantiles.