Does Rising Cohort Achievement Narrow the Tertiary Earnings Gap? Evidence on Earnings Rank from 36 Countries

Status

Under review.

Summary

The earnings gap between tertiary graduates and non-graduates shows what a degree is worth in the labour market. Many of today’s working-age cohorts scored higher in school-age assessments than earlier cohorts. I ask whether such gains go with a smaller gap. If they do, higher achievement would also reduce inequality between credential groups. I link the harmonised cohort achievement data of Lee and Lee to PIAAC Cycles 1 and 2 for 126,590 adults in 36 countries. The outcome is position in the national distribution of hourly earnings. My models give each country its own gap, give graduates their own age profile and let the gap change between cycles. They compare countries by how much their younger cohorts gained.