Gender disparities in horizontal mismatch penalties: an examination of professional’ degrees in the UK (2007–2015)

ABSTRACT

We quantify the returns to higher education for degree disciplines, namely ‘professional’ degrees, Medicine/Dentistry, Law, Accountancy and Psychology, within the UK from 2007 to 2015. We estimate the returns to education in the form of employment and wage premia associated with each subject. Our analysis contributes to the existing literature on the topic of horizontal mismatch by estimating the wage premia in different occupational settings and identifying the penalty associated with horizontal mismatch in each field, and relative to all other graduates. We identify how wage premia vary between employment outcomes when individuals with professional degrees are employed inside, as opposed to outside, their professional sector. A distinct difference in mismatch penalties between male and female graduates was found. Male mismatch penalties are isolated to law graduates, while female mismatch penalties appear, and persist within all fields across the duration of a female graduate’s career.

KEYWORDS:

• Higher education
• human capital
• earnings
• employment
• horizontal mismatch

JEL CLASSIFICATION CODES:

• I2
• I26
• J21
• J24

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Christopher Lalley http://orcid.org/0000-0002-7657-986X

John Houston http://orcid.org/0000-0002-4532-0820

Anne Gasteen http://orcid.org/0000-0002-2825-9482

Notes

1 An example of a professional working in the sector would be a law graduate working as a lawyer. All law professions identified within the data set will be included within this category. The same approach is applied with respect to each professional discipline.

2 An example of a professional working outside the sector would be a law graduate working in any profession other than law.

3 Of course, both groups could seek employment in the non-Graduate Market, though as we demonstrate later in the paper, the employment returns there are probably insufficiently attractive to them.

4 This general rate (p_G) is lowered by the presence of the Professional ‘refugees’ due to the reduced demand for professional graduates.

5 ‘1’ signifies in employment, ‘0’ not in employment, in this case.

6 Tables A.1 and A.2 in the appendix summarise rates of self-employment across professional degree disciplines by gender

7 Where no data is provided the ONS state a reliable estimate of self-employment within the discipline could not be made

8 Tables B.1 and B.2 in the appendix provide a full summary of mismatched and mismatched SOC codes across the four professional degree disciplines, broken down by gender. Tables C.1–C.8 summarise the percentage of graduates working within out of profession occupations summarised by degree discipline, age and gender.

9 Age brackets define the assumed early (25–35) middle (36–45) and late (46–60) stages of an observation’s career

10 While the data set does not provide information on professional body membership, it is safe to assume that all graduates working within such professions will be a member of their respective professional body as this is a requirement to practice as a lawyer or psychologist

11 The full results are shown in Tables E.1 and E.2 in the appendix.

12 The full results are shown in Table F.1 and F.2 in the appendix. Separate estimates have been conducted using a median regression and are presented in Table G.1 and G.2 in the appendix.