Trends in the effects of education on occupational outcome 1972 - 2000. Differences between social class and earnings

This paper analyses trends in the effects of education on occupational outcome in Great Britain. I aim to show that the direction and strength of the trend in the effects of education varies between measures of occupational outcome, and between periods within the observed time span. The trend in the effect of education on social class is unequivocally downward. With regard to earnings the trend in the effect of education depends on how we operationalise earnings. When we use a categorical measure of earnings sestiles, we observe a downward trend in the effects of schooling. However, when linear models using logged hourly earnings are employed, we find the expected U-shaped trend in the effect of schooling. Left-wing policies have increased schooling levels up to the early 1980s, which led to a downward trend in the schooling effect on earnings. From the 1980s onwards, rapid technological developments and the abandonment of left-wing politics caused an increase in the demands for qualifications, which led to increased effects of schooling on earnings. Much of this trend runs indirectly through trends in social class differences in earnings, suggesting that the social classes have further differentiated their employment relations.