Heterogeneous returns over the life-cycle? Or nothing at all? Re-examining the wage returns to education in the UK

This paper uses data from the UK Labour Force Surveys 1986-2011, the New Earnings Survey and the Annual Survey of Hours and Earnings 1975-2011 to re-examine the returns to education from the 1972 Raising of the School Leaving Age (RoSLA) reform in England and Wales. Importantly, the span of our data allows us to investigate the wage returns from an additional year of schooling from labour market entry through to age 54. We show that there is substantial variation in the impact of RoSLA over the lifecycle, which is masked by standard regression discontinuity (RD) estimates. Moreover, the discontinuity in labour market experience at the point of RoSLA has a significant negative effect on the earnings of compliers.