Issue, No.16 (December 2020)

(LIS)2ER workshop: “The Distributional Effects of Higher-Education Expansion”

by Petra Sauer (Luxemburg Institute of Socio-economic Research (LISER)/ LIS / Research Institute Economics of Inequality (INEQ), Vienna University of Economics and Business), and Philippe Van Kerm (Luxemburg Institute of Socio-economic Research (LISER)/ University of Luxembourg)

Since the end of the 1980s, education has been rapidly expanding around the globe, and particularly in affluent countries. In OECD countries, on average 74% of the population at secondary-school-leaving age has been enrolled in tertiary education in 2018, and in 28 out of the 37 member countries half of the young population aged 25-34 attains a higher education degree.

The first (LIS)2ER workshop has aimed to expand and deepen the understanding of the implications of the mass expansion of higher education for inequality. Six presentations of comparative as well as country-specific studies from different fields in the social sciences dealt with the societal, economic and political causes and consequences of higher education expansion. By discussing how it affects educational and labour market outcomes as well as social mobility, the contributions provided insights on the role of education in fighting (or spurring) inequality.

The workshop was kicked off with Petra Sauer (LIS, LISER) presenting research which is conducted within the (LIS)2ER initiative, and which inspired the topic of the workshop. Based on a comparative study of 25 OECD countries, she showed that the majority of countries has expanded higher education by increasing the share of the population obtaining a Bachelor degree. Since Master and PhD levels have remained relatively exclusive, the implications for inequality in the distribution of labour income are more pronounced at these levels. Moreover, higher education expansion is driven by female education while male attainment has been stable recently. Women thus attain higher education levels then men in all affluent countries, and distributive effects are reverse: higher attainment of females contributes to a more equal distribution of labour income; higher attainment of males exerts disequalizing effects.

Based on the same source of harmonized micro-data from the Luxembourg Income Study (LIS), Louis Chauvel and Emily Murphy (University of Luxembourg) investigated the global relation between education and monetary gains at the macro and the micro level. For 44 high- and low-income countries they added empirical evidence to the stylized facts that first, countries with more educated populations are richer countries, and second, that within each country, individuals with the highest levels of education have greater incomes. Yet, they note the relevance of exemptions to general rules: Russia and Georgia are highly educated, but poorer than expected; conversely, Luxembourg’s income level exceeds its educational achievement. Moreover, in richer countries the gap in the educational premium for secondary and tertiary education has been increasing, what might have contributed to exacerbate inequality.

The third comparative study, presented by Krzystof Czarnecki (Poznan University), provided an explanation for cross-country differences in educational inequalities based on variations in higher education systems being embedded in institutional configurations of modern welfare states and linked to partisan politics. Using the novel Student Support and Fees Dataset provided within the Social Policy Indicators (SPIN) (Nelson et al. 2020), he revealed diversity in student funding across 32 affluent countries that can be traced back to the long-term cumulative power of four political-party families: Christian democratic and left-wing parties aim at making studying unconditional on student household’s labour market participation. But while Christian Democrats foster decommodification via family support measures, left-wing parties seek to ensure students’ independent transition to adulthood via direct payments. Commodification, e.g. via tuition fees, mostly results from a conservative rule, while both Conservatives’ and Liberals’ student funding schemes tend to be means-tested and targeted to students from low-income households.

The three comparative analyses were enriched by three country-specific studies which provided nuanced insights into the underlying mechanisms which shape the distributional effects of higher education expansion

Jo Blanden (University of Surrey) looked at educational inequality by family background in the UK. The British experience of educational expansion has been characterized by several changes in higher education policy between 1980 and 2015 – introduction and increase of university tuition fees from 1000 to 9000 Pounds, increasing availability, generosity and targeting of student funding and phasing out of student number caps – which have, however, not reduced the extend of vertical stratification of UK’s higher education. Thus, even if reforms at the secondary level which substantially reduced achievement gaps between children from privileged and disadvantaged backgrounds and contributed to enlarge the student population, this has not fully translated into reducing educational inequality. The share of students from disadvantaged groups who acquire a tertiary degree at age 23 has more than doubled between cohorts born in the 1950s and in the 1980s. But students from privileged groups are still overrepresented in “Russell Group Universities” as well as at the postgraduate level; they thus continue to distinguish themselves via high prestige qualifications which offer large labour market returns. Yet, the use of school-based assessments instead of exams as defining component in the university application process is able to put more emphasis on access on the basis of qualification and might contribute to level the playing field.

Inequalities in higher education not only arise from differing labour-market opportunities based on type, quality and prestige of the degree-providing University, but also from the inclination and ability to study abroad differing by students’ socio-economic background. In their presentation, Irina Gewinner and Frederik de Moll (University of Luxembourg) tackled the topic of international student mobility, which has accelerated simultaneously with education expansion. Based on an investigation of the student population in Luxembourg in 2019, they provided insights into the social, economic and psychological factors affecting students’ decisions to study abroad. International students are drawn to Luxembourg either because they value uniqueness, prestigiousness and language variety of the program, or because they have obtained a scholarship. Those students tend to come from the Greater Region, predominantly study at the Master or PhD level, and have a high-education parental background. In contrast, students who decide to remain in Luxembourg for their studies consider affordability, living conditions or personal reasons, tend to study at the Bachelor level and are from low-to-medium educated background.

Besides being determined by educational inequalities, the overall implications of higher education expansion for inequality also depend on labour demand: How many University graduates are required to perform high-skilled tasks? Golo Henseke (University College London, Institute of Education) provided answers to this question by analyzing the British labour market between 1997 and 2017. Over this time span, the graduate labour force more than doubled, and job task profiles changed, particularly demanding more specialist knowledge and IT skills. But this task-warranted upskilling of jobs only took place before 2006, thereafter, the expansion of jobs that required degree-level qualifications became decoupled from changes in the task content of jobs. This raises the question of why employers are willing to pay higher wages for graduates even if their technical skills are not entirely necessary to perform their work. Golo Henseke showed that higher educational attainment reduces on-the-job learning and training time and argued that employers might seek job ready’ candidates for otherwise unchanged jobs. Rising degree requirements have, however, implications for inequality if they redistribute access to top jobs’ away from non-graduates.

The inspiring exchange of different perspectives from sociology, economics and education shaped the workshop’s interdisciplinary nature. In his welcome address, LIS director Daniele Checchi noted that the “… topic is particularly `fit’ for such an approach, because no one can claim that the relation between inequality in education and inequality in income belongs to one particular field. Merging the different perspectives is a way to have a more realistic and more complete view on the topic.” Taken together, the insights of the workshop revealed that the mass expansion of higher education has greatly enlarged the student population and provided new opportunities for students hitherto from disadvantaged socio-economic backgrounds. However, (new) lines of differentiation along degree levels, degree providers, fields of study and international mobility have become more relevant and can contribute to spur inequality. The extent to which this is the case differs across countries and is related to institutional configurations of modern welfare states. This highlights the mediating role of policy which can be applied to secure that higher education expansion exerts its equalizing potential.

This workshop was the first international workshop in the realm of the (LIS)2ER initiative, an institutional collaboration between two actors in Luxembourg’s research landscape, facilitated by the Luxembourg Ministry of Higher Education and Research.

Organising committee: Daniele Checchi (LIS), Petra Sauer (LIS and LISER), Philippe Van Kerm (LISER and University of Luxembourg)