Who Benefits Most from a University Degree? A Cross-National Comparison of Selection and Wage Returns in the U.S., U.K. and Germany

Jennifer A. Flashman, Yale University
Renee Luthra, University of Essex

Given limited resources and an extended recession, it is critical to understand what is gained from investments in post-secondary education. In this paper, we study the heterogeneous returns to post-secondary education across three unique country contexts. Drawing on panel data and matching techniques, we compare parallel analyses of the US, the UK, and Germany to discover how wage returns to a college degree differ depending on individuals’ propensities to complete university. Studying men in their later careers, we find important variation across countries. In both the UK and Germany, we find negative selection into university; those least likely to complete benefit most from completion. By contrast, in the US, at later ages, those most likely to complete benefit most from completion. In supplementary analysis, we show that at least some of this variation can be explained by differences in the size and prevalence of academic post-secondary sectors in each country.