The mismatch earnings penalty
We disentangle the relationship between student ability, course quality and the match between the two on earnings, estimating the first mismatch parameter in the literature. Using administrative data on all state-educated students in England linked to tax records, we show that high ability students attending low quality courses earn significantly less than their well-matched counterparts. By contrast, we find no evidence that lower ability students that overmatch to high quality courses go on to earn any less than well-matched students. This is evidence that affirmative action does not appear to have a detrimental effect on students’ future earnings.
Chiara Cavaglia, Lindsey Macmillan, Konstantina Maragkou, Richard Murphy and Gill Wyness
11 November 2024 Paper Number CVERDP041