How much does degree choice matter? *

We use a large and novel administrative dataset to investigate returns to different university 'degrees' (subject -institution combinations) in the United Kingdom. Conditioning on a rich set of background characteristics, we find substantial variation in returns across degrees with similar selectivity levels, suggesting students' degree choices matter a lot for later-life earnings. Returns increase with university selectivity much more at the top of the selectivity distribution than further down, and much more for some subjects than others. Returns are poorly correlated with observable degree characteristics other than selectivity, which could have important implications for student choices and the incentives of universities.

Automated summary

In this study, a large and novel administrative dataset is used to investigate the returns to different university degrees in the United Kingdom. The analysis, which controls for various background characteristics, reveals significant variation in returns among degrees with similar selectivity levels, indicating the importance of students' degree choices for future earnings. The study finds that returns increase more with university selectivity at the top end of the selectivity distribution, and the variation is larger between different subjects. Furthermore, the observable characteristics of degrees, other than selectivity, show poor correlation with returns, which has important implications for student choices and university incentives.