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Empirical Essays on the Economics of Education and Pay

Dr Matthew Dickson has been awarded a two-year Fellowship awards grant from the Economic and Social Research Council (ESRC).  The grant will start on 1st April 2009 and run until March 2011.

Summary of award

Economics research can help us to answer important questions facing individuals and the Government today, questions such as: to get the best education for my child, when should they begin their schooling, and does it matter where they start their education? Is it worth staying in school beyond the compulsory age - does education really increase my wages, and if so by how much? Should I choose to work in the public sector or in the private sector and how will this decision affect my earnings, career prospects and job security?

The answers to these questions have major implications for the individuals concerned and also for the Government as it seeks to make policies that will ensure that children from all backgrounds get the best possible start in education and that we have a well educated workforce, filling the roles that need to be performed in each sector of the economy. All of my research is directed towards answering questions such as these; my aim is to help to inform our understanding of the best ways in which to ensure the development of skills in children and adults - two very active areas of policy debate - and communicate this to policy makers and a broader audience.

Part of my research looks at the Government's policy of allowing all children in England to start their education part-time at the age of three. I have analysed the effects of the policy on test scores when these children take reading, writing and maths assessments at age seven and find that in poorer areas if more three-year olds begin attending state schools parttime, test scores improve in reading and writing. This has direct relevance to the debate surrounding early investments in children and thus for the Government's early years policy, hence it is important for me to communicate these findings not only to academics but also to policy makers and to parents.

Another important question for individuals and for policy is how much does an additional year of schooling increase an individual's hourly earnings? Answering this question is notoriously difficult to do, because the amount of education individuals acquire is a choice that is influenced by many factors, some of which we cannot observe - such as ability, motivation and time preference - and these factors also influence the wage an individual earns. There have been many attempts to tackle the problem, and I have implemented some of the approaches recently taken, then compared the estimates using the same sample of British males working during the 1990s and early part of the new millennium. The next challenge is to look in more detail at the ways in which education improves individual's life outcomes - is it just through higher initial wages or is wage growth also improved, and how does greater education affect employment patterns and earnings over a lifetime? These questions are extremely relevant to the current debate concerning the plan to raise the school leaving age to 18, and my continued research will shed further light on these issues.

In the UK and in many major countries across Europe, a substantial proportion of workers are employed in the public sector and there is a lively ongoing debate concerning whether or not public sector workers are better off than their private sector counterparts. My research looks at the value of employment in each sector, though not just looking at differences in earnings at a single point in time but also taking into account the differences in the range of earnings, the growth of earnings and the security of employment in each sector over time. The analysis takes account of the differences between individuals who choose to work in either sector, and my plan is to develop this model further to understand more clearly the differences between the sectors and their workers, and the implications this has not just for the individuals themselves but for the Government as it seeks to recruit and retain workers for a whole range of public sector jobs.

Matthew Dickson