The declining return to professional status in the British economy (with special references to scientists and engineers)
This thesis is concerned with the question of how the return to investment in human capital, as represented by the attainment of professional status, has changed over time in Great Britain. In addition it is concerned with differences between different professional groups. Because of data limitations a very simple methodological approach is adopted building upon work by previous researchers. This uses age earnings profiles at a point in time as a guide to the future earnings associated with different career profiles. The main developments to the conventional methodology are concerned with adjustments to' these profiles to reflect differences in the characteristics of different professions. Previous work in this area for Great Britain has been limited in both the time period covered and the types of qualification and profession considered. The major contribution of the present study is to provide a perspective on how rates of return have altered over time and to compare differences between different professions. The main finding is that there has been a dramatic secular decline in rates of return from around 176 per cent in 1955 to 76 per cent by 1975. This has been common to most professions. The explanation for this phenomenon is argued to be in broad changes in the balance of supply and demand for highly qualified persons. Another important finding is that social as opposed to private rates of return show a similar pattern over time although there are some marked differences in rankings between different professions for the two measures of return. It is argued that a regular monitoring of rates of return to entering different professions would provide a valuable guide to important policy decisions regarding the pay of people employed in the public sector and on the identification of restrictive practices in professional labour markets.