Changes in the wage return to tertiary education in Spain: evidence from matched employer-employee data

Abstract

This paper analyses the recent evolution of the wage return to tertiary education in Spain, distinguishing between advanced vocational training and university education. Using data from the Spanish Structure of Earnings Survey, the study estimates wage equations which, in addition to considering the human capital and the personal and employment characteristics of individuals as causal factors, includes a measure of the excess labour supply of university graduates by region. The results show that the wage differential of the graduate population fell, in general, in the period 1995-2006, and that a relatively high supply of graduates in the regional labour market negatively affects wages in such regions, and that these effects increase over time.