Economic Modelling, 62 pp 90-102

This paper uses HESA data from the Destination of Leavers from Higher Education survey 2002/03 to examine whether more mobile students have an earnings advantage over those who are less mobile. We define mobility in terms of both choice of institution and location of employment. A clear finding that emerges is that mobility is associated with superior earnings outcomes, principally through students extending their job search horizon. Our analysis examines the entire earnings distribution rather than focussing solely upon the mean, as in common in much of the existing literature. This will provide a much clearer picture as to the true effect of mobility on earnings. We also confirm, via bivariate probit analysis, that there is a positive correlation between individual mobility decisions with regard to the location of university attended and location of employment. There are important policy implications resulting from these findings. If raising student fees or associated living costs reduces mobility, for example through choosing to live at home, this may affect future earnings with consequent impact on loan repayments. Alternatively, any subsidies provided by the Scottish and Welsh governments for local students may not help their own economies given the incentive for students to leave their country of origin post-study to increase their potential earnings.