More or different education? The joint impact of educational level and fields of study on earnings stratification in Finland, 1985-2005

Abstract

Both educational attainment and fields of study have been found to influence individuals' socio-economic position, but their joint socio-economic impact has received considerably less research attention to date. Focusing on Finland, the article attempts to address this gap. Using large-scale and mainly register-based cross-sectional data, the logged annual earnings of young Finnish adults are estimated by means of median regression models for the years 1985, 1995 and 2005. Results show that whether or not educational level raises individuals' socio-economic position crucially depends on the fields of study involved. Educational attainment increases earnings mainly within the same field of study, but not necessarily when comparing the impact of qualifications across different areas of specialization. Furthermore, trends over time in the economic value of educational qualifications are heterogeneous, with stability, decline and growth simultaneously affecting different fields of study within a given educational level. Gender differences in the returns to vocational education tentatively indicate that, at lower educational levels, female-dominated fields of study might be more beneficial for women's earnings than stereotypically male fields, yet this result does not appear robust over alternative measures of socio-economic status. On the whole, it is suggested that theories of social closure and status competition may be more suited to account for the relationship between education and earnings stratification in Finland than arguments based on personal characteristics such as individuals' productivity.