From Elite University to Mass Higher Education: Educational Expansion, Equality of Opportunity and Returns to University Education

From Elite University to Mass Higher Education: Educational Expansion, Equality ofOpportunity and Returns to University EducationAuthor(s): Osmo Kivinen, Juha Hedman and Päivi KaipainenSource: Acta Sociologica, Vol. 50, No. 3 (Sep., 2007), pp. 231-247Published by: Sage Publications, Ltd.Stable URL: http://www.jstor.org/stable/20460000 .

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ACTA SOCIOLOGICA 2007

From Elite University to Mass Higher Education Educational Expansion, Equality of Opportunity and Returns to

University Education

Osmo Kivinen, Juha Hedman and P'aivi Kaipainen Research Unitfor the Sociology of Education, University of Turku, Finland

abstract: The transition research framework combines two selection mechanisms, one non-discriminatory, based on equality criteria for transition from home to education, the other discriminatory, based on suitability criteria for transition from education to labour market. With the expansive, egalitarian Nordic higher education policy as its starting point, and drawing on Bourdieuan-Collinsian ideas and Finnish census data, the article examines changes in inequality of educational opportunity and labour market returns to university graduates over the course of three decades. Two elite university generations (bom in 1946 and 1966) and one mass higher education age group (born in 1976) are compared by gender and family back ground. Differences in participation in university education, as measured by odds ratios, have narrowed in three generations by a sequence: 19.1-10.8-8.2, being still eightfold in favour of students from academic families. The differences in relative retums to university graduates (academic versus non-academic background) were

minimal for those bom in 1946 (1.01), whereas for the '1966 generation' they were threefold (3.17) in favour of graduates from academic homes. Our simulations predict high returns for the 1966 generation at the mature career stage.

keywords: equality of opportunity * family background * gender * participation in university education * reproduction * retums to graduates

Introduction Nordic countries are known for their well-developed education and innovation systems. Finland and Sweden, for instance, are the world's leading countries in terms of relative proportions of R&D investments. Recent comparisons of educational achievements within the Programme for International Student Assessment (PISA) show that, among the 41 countries, Finland has taken the lead in almost every field evaluated. Actually, this is not so surprising, since Finland has long been a nation of well-educated people. All Finns have been de facto literate for more than a century. Decade after decade, the Church, schools and universities, and not least families, have successfully taken on a positive attitude towards education.

Equality of educational opportunity has been promoted by the Nordic welfare state - a

decisive step in its time being the launch of the comprehensive school system. An expansion of higher education has also been made in the spirit of egalitarian educational policy.

Leaning on Finnish data, we analyse the transition of subsequent generations from the home via education to labour market in the era of expanding higher education; we also analyse the bonds between the home, education and the labour market. The developed transition research

Acta Sociologica * September 2007 * Vol 50(3): 231-247 * DOI: 10.1177/0001699307080929 Copyright ? 2007 Nordic Sociological Association * Published by SAGE (Los Angeles, London, New Delhi and Singapore)

www.sagepublications.com



Acta Sociologica 50(3)

framework leans on certain Bourdieuan-Collinsian ideas of reproduction and credential-based screening. We set out from the known fact that educational credentials serve as a pathway to the world of work (e.g. Bills, 2004). Together with screening hypotheses (Berg, 1970; Arrow, 1973; Spence, 1973), Randall Collins's (1979) credentialist and Bourdieuan (Bourdieu and Passeron, 1977) reproductive ideas form the core of our framework. We have to say, however, that our framework does not include any kind of pre-commitment to Bourdieu's claimed deadly sin, namely reproduction determinism. On the contrary, we study empirically the way in which social background (academic versus non-academic) is being reproduced in the Finnish university system within three different generations of students, and by gender as well. Bourdieu is often read as a determinist referring to masculine domination, but as for instance suggests Jo-Anne Dillabough (2004), Bourdieu's latest work has opened up points of view on gender inequality in education, in particular. As Arne Mastekaasa (2005) notes, educational equality between men and women has been achieved in most Western countries, notwithstanding the very highest levels of education (also Berggren, 2006). Later on, we will find out what the situation is in the case of university education in Finland. Credentialists do not believe that skills obtained through education have much relevance in

working life, nor in enhancing productivity. However, even if education would not produce the skills that employers specifically want, the sheer number of years spent in higher education to achieve a degree can be interpreted as a signal of 'tenacity' worthy in the labour market as well. According to the screening hypothesis, education serves as a recruitment device for employers in their task of singling out employable apprentices. Degrees are understood to indicate the employees' potential.

As long as a quarter of a century ago, Collins (1979: 197-8) was recommending that education policymakers should discard their near fatalistic belief in the tight connection between degrees and employment, and instead ensure that educational institutions concen trated on their truly educative functions. Of course, Collins was fully aware of the utopian nature of his propositions, and now we realize that the actual course of events may have been quite the reverse. If we read, for instance, the green papers and strategy plans issued by the European Union (1996) and the OECD (2002, 2005a), the idea is rather to tighten the bonds between educational systems and the labour market. In this article, the bonds between the home, education and the labour market come under empirical evaluation in our case studies, which draw on the Finnish census data.

A basic aim of the egalitarian education policy typical of the Nordic welfare states is in ensuring that educational achievement is dependent not on circumstances, but rather on effort and choice (cf. Kivinen and Rinne, 1998). In line with Roemer (2000), we conceptualize equality of opportunity as a principle according to which society - or, as in the Nordic countries more accurately, the state - should do its utmost to level the playing field so that all individuals with equal abilities can, as far as they wish, compete for the same positions. Sometimes, and from a slightly different angle, there has also been talk about digging up the 'talent reserves'. Anyway, in our transition research framework (see Figure 1), it is enough to define ability in a Roemerian way, i.e. ability equals the individual's propensity to transform available resources into educational achievement. In understanding ability in the aforementioned way, we avoid certain problems related to the mismatch between intelligence as measured on tests (predicting scholastic success) and productive ability (predicting labour market success) (see Arrow, 1973). Here, ability is understood simply as successful steps in the transition path from the home via education to the labour market. At the beginning of the twenty-first century, educational inequality seems no longer to

belong to key topics of discussions revolving around education policy, not even in the Nordic countries. Today's big issue appears to be the competitiveness of the new knowledge indus tries and the ways in which education can secure the availability of high-skilled experts to

232



Kivinen et al.: From Elite University to Mass Higher Education

feed them (cf. Bills, 2004; Tapper and Palfreyman, 2005; Douglass, 2005). In this article, however, we analyse inequality of opportunity as operationalized by the differences in participation in university education by family background and gender. In addition to ordinary research on inequality, we also analyse labour market returns to university education as operationalized by differences in earnings between graduates and non-graduates by social background and gender. Furthermore, in our intergenerational comparisons we look at changes in differences in participation (i.e. odds ratios) as well as changes in differences in returns (i.e. returns co efficients), also by family background and gender. As far as returns are concerned, basing their arguments on empirical evidence, Claudia Goldin (1999) and Randall Collins (1979, 2002) have presented a degree inflation hypothesis to the effect that when the number of degrees at a certain level increases enough, the labour market value of those degrees actually decreases. At the end of the article we briefly consider the degree inflation hypothesis against Finnish data.

In his report to the OECD going back some 30 years, Martin Trow (1974) models the develop ment of higher education as three separate phases: first, in the elite university phase, less than 15 per cent of the age group participate in higher education; second, mass higher education participation rates exceed 15 per cent but remain below 50 per cent; third, at its universal stage, higher education reaches more than 50 per cent of the age group. Whereas the elite university is by and large the privilege of the elite, mass higher education can already be referred to as a right of the middle classes; in the universal phase, participation in higher education almost becomes a civic duty (Trow, 1974). According to somewhat inaccurate OECD (2005b) figures, in Nordic countries the criteria of universal higher education are beginning to be fulfilled. Our own Finnish data show that 46 per cent of young Finns participated in higher education (21 per cent at universities and 25 per cent at polytechnics in 2004).1 Thus, in light of these figures, Finland is not so much in the universal as in the mass higher education phase.

If we were to formulate the entire research problem in one question, it might read like this: How has the egalitarian Nordic higher education policy been realized in the transition from the home via education to the labour market during three generations (in the eras of elite university and mass higher education), when differing amounts of family cultural capital and discriminatory expectations of the labour market with their contradictory effects are taken into account?

Research framework and setting The framework (Figure 1) presents the key concepts of the study. In the first phase of transition, from the home to education, a non-discriminatory selection principle and various equality criteria are being applied. In the second phase, from education to the labour market, egalitarian policy measures are secondary, since in the labour market relevance criteria come first, and the primary concern is how to screen to get the most suitable person for the job. Thus, a

discriminatory selection principle (suitability criteria) is applied in the second phase of tran sition, in this case, from university to labour market. Our transition research framework, focusing on bonds between the home, education and

the labour market, pays due attention to the educational expansion experienced and to the subsequently changing employment opportunities for graduates entering the labour market. We examine differences in participation (odds ratios between students coming from academic versus non-academic family backgrounds)2 and returns from university education (graduates versus non-graduates) of the large baby boom group and a small baby bust group, both from

the era of the elite university, and one small age group participating in university education in the era of mass higher education. Our own prior studies have focused on equality of educational opportunities in the era of

expanding university education (e.g. Kivinen and Rinne, 1996; Kivinen et al., 2001, 2002).

233




employment opportunities, ea .... l Diferences

in returns (returns coefficients)

Discriminatory selection Labur market Suitability criteria Second phase

relevance of transition

from education Screening to work

Un e ggg| 0 gW8ivest dg ree

Differences in participation in

.... . ....... ., . l,, ,A. ,..

Equality.of.university education Equality of {;.. .2.2. .< <>.. (odds ratios)

educational Non-discriminatory selection opportunity Equality criteria

Levelling the playing field First phase of transition from home to

... ... ... ..... .... .. education

Figure~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:i I Trasiio researc lframewo;rk W| W0W 0l

the ostappopratewayis t cocepualze heSocial background-eatdiequalstesa

the cultural capital of famil

Figure 1 Transition researchframework

Because we are studying empirically the relations between the education system and the home, the most appropriate way is to conceptualize the social background-related inequalities as differences in the cultural capital of families, operationalized further by differences in the parents' level of education. Since we here analyse transition mechanisms specifically - and do not, for instance, research on social class or stratification systems - there is no doubt that, for our purposes, parents' educational level is an appropriate tool indicating social background. In Bourdieuan terms, in the labour market, social capital plays a crucial role after graduation (cf. Kivinen and Ahola, 1999). Social capital most probably works in favour of well-to-do

males, but, unfortunately, we cannot study the matter in this article. Our earlier research shows that during the 1980s and 1990s the inequality of opportunity gap

between different social groups, as operationalized by differences in university enrolments, has narrowed slightly. For instance, according to Kivinen et al. (2001), in 1980 the overrepresenta tion of university students (i.e. those who participated in university education by the age of 24) from an academic family background (operationalized by the father's level of education) was 13-fold against those whose father had received only basic education. Since then, differ ences in participation have decreased as a descending sequence of odds ratio values: 13-12-11-10, at 5-year intervals. Hence, in 1995 the children of academically educated fathers still had a 10 to 1 chance of entering university compared to the children of fathers with only a basic level of education. This was still a far cry from equality (i.e. odds ratio value 1).

234




When we later analyse how the situation has changed in the twenty-first century, we use the educational attainment of both parents in determining family background. Taking both parents' education into account, rather than just the father's, gives more up-to-date infor mation on background effects - especially on comparisons between genders. There has been debate on how differences in participation should be measured between those who prefer odds ratios and those opting for participation ratios or gini ratios (see Hellevik, 2000, 2002; Kivinen et al., 2001, 2002; Marks, 2004). Participation ratios as group-wise difference measures do not yield values appropriate for comparisons of changes between generations. Gini ratios as inter generational change measures, in turn, do not yield values appropriate for comparisons of differences between groups. Thus, odds ratios are the most appropriate tool for measuring changes between generations in the context of group-wise differences. Out of the elite university baby boom generation (born in 1946), we have taken a 20 per cent

random sample in which we have included data on the parents' educational level in the year 1950, when those born in 1946 were 4 years old. As for the elite university baby bust group (born in 1966), we have the entire age group, in which we have included data on the parents' educational level in the year 1970, when those born in 1966 were 4 years old. The mass higher education age group (born in 1976) random sample covers 50 per cent, with data on the parents' educational level in the year 1980, when those born in 1976 were 4 years old. Data on students' date of entry are from the years 1970, 1990 and 2000, while data on graduates annual earnings are from the years 1975 and 1995.

Differences in participation (Figure 2) are measured by odds ratios. The formula for the odds

ratio is Pa (1 - P, where Pa is the share of university participants from the offspring in academic P 1-Pa)t

families (at least one parent has a master's degree), and Pp is the share of university partici pants from the offspring in non-academic families.

In analysing the labour market returns yielded by education, we employ the concept of premium operationalized as presented by Claudia Goldin (1999), i.e. the relationship between

the earnings of graduates and non-graduates. The premium is calculated by the form -m, xp

where xm describes the average earnings of graduates and x the average earnings of others. As appropriate measures for differences in participation by family background, odds ratios

enable comparisons of changes in differences in participation, and the premium enables comparisons of changes in differences in returns. Here, we employ specific returns coefficients for this purpose (see Figure 3).

Figure 3 illustrates schematically our operationalizations of relative returns to university graduates; RC (EC) = returns at the early career stage (in their thirties) and RC (MC) = returns at the mature career stage (in their fifties). Returns are calculated by relating the average annual earnings of university graduates to the average annual earnings of the control group at respective ages. We compare the returns coefficients of two generations (born in 1946 and 1966) at two career stages, in their thirties and fifties, by family background (academic versus non-academic) and gender. Later, we also simulate returns coefficients at an early career stage for the 1976 age group.

The labour market situation in 1975, when graduates born in 1946 were beginning their careers, was very different from that of 1995, when the graduates born in 1966 were in the same situation. For instance, the early 1970s is often referred to as an era of full employment,

with the general unemployment rate being below 4 per cent. The early 1990s, on the contrary, was a period of mass unemployment (general unemployment rate exceeded 20 per cent). Studies on wage-differentials typically focus on the labour force alone, leaving unemployment

235




Mass higher Elite university era education era

Participation rate <15% 16-50%

Elite university baby Elite university baby University expansion boom generation bust generation generation

Size of age group Size of age group Size of age group born in 1946 bom in 1966 born in 1976 106,075 persons 77,697 persons 66,846 persons

Share of 24-year-olds University University University participating in university participation rates in participation rates in participation rates in education (%) the year 1970 the year 1990 the year 2000

Differences in participation Odds ratios in the Odds ratios in the Odds ratios in the in university education by year 1970 year 1990 year 2000 the age of 24 (academic* vs. non-academic background)

Returns at early** career Returns in the year Returns in the year stage (graduates vs. non- 1975 1995 graduates)

Returns at mature*** career Returns in the year stage (graduates vs. non- 1995 graduates) I I I I

* At least one parent holds a master's degree. ** Early career returns in the year when the whole age group had turned 29, i.e. they were in their thirties. Further

on we refer to this point simply as 'age 30'. *** Mature career returns in the year when the whole age group had turned 49, i.e. they were in their fifties. Further

on we refer to this point simply as 'age 50'.

Figure 2 Research setting

and other non-labour activities, such as studying, out of their scope. Since entrance to the labour market by the age of 30 is by no means automatic, it is necessary to take into account the changing labour market conditions, or 'business cycles', when comparing returns to university graduates from different age groups. The returns coefficients developed here entail protection from unemployment as one form of labour market return together with good relative earnings.

In this respect, it must also be taken into account that, especially in times of mass un

employment, educational institutions may serve as a storage or waiting room. In the case of universities in the Nordic countries, such a function entails gender-specific issues, which Caroline Berggren (2006) describes as the inclusion of parallel female-dominated programmes within higher education resulting in gender separation. Berggren also considers the increasing second chance via adult education. The storage function concerns not only the participation of young age groups, but perhaps even more the returns to mature age groups increasingly utilizing their second chance to pursue education. However, we agree with Berggren (2006) that in future more research needs to be carried out on the second chance alternative.

236




Average earnings of university graduates in generation X

c E V RC(MC) = Relative returns 3; ( at mature career stage

c

r ~~~~~~~~~~~~~~~~~~~~~~~~~~Average earnings of l ~~~~~~~~~~~~~~~~~~~~~~~~~whole generation X

RC(EC) = Relative * , K returns at early career stage _Aerage earnings of

control group (non-graduates) in generation X

Early career stage Mature career stage

30 35 40 45 50

Age

Figure 3 Schematic illustration for comparison of relative returns to university graduates in generation X at early and mature career stages

Differences in participation: from elite university to the mass higher education era As Table 1 indicates, out of the elite university baby boom generation (in our case the 106,000 persons born in 1946), about 8 per cent (8326) had participated in university-level education by the age of 24. Of these, 966 had an academic family background (i.e. at least one parent had a master's degree). More than half (59 per cent) of the offspring of academic parents had participated in university education by the age of 24. Of the group coming from non-academic families (i.e. neither parent had a master's degree), a modest 6 per cent (6680) had entered university by the age of 24. Nevertheless, when comparing by numbers, the volume of students with non-academic backgrounds was seven times that of students with academic parents. Hence, the majority of all Finnish university students born in 1946 came from a non academic family background; yet, the relative overrepresentation of students with academi cally educated parents was high.

The number of participants by the age of 24 has risen clearly; moreover, the share of partici pants out of the entire age group doubled between 1970 (those born in 1946) and 2000 (those born in 1976). The odds ratios concerning participation in university education by family back ground - our indicator of inequality of opportunity - have also undergone a notable decrease from the day when elite university baby boomers were young (19.1) to the mass higher education era when the 1976 generation had their turn (8.2). We can interpret the odds ratio 19.1 of the 1946 born baby boom generation (in Table 1) such

that at the end of the 1960s, when they studied at university, the chances for the offspring of academic parents being part of the relatively small group of university students were 19.1 to 1 against children from non-academic families. Characteristically, the elite university was for

males from academic families, since they had a 32.0 to 1 chance of participating in university

237




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compared to their counterparts from non-academic families. The corresponding ratio for women was 12.7 to 1.

Out of the elite university baby bust generation (here those born in 1966), 11.5 per cent (8934) participated in university studies. Out of the children of academic families, 926 participated (Pa = 0.56), i.e. still more than half of the group. Of the children of non-academic families, 8008 (Pp = 0.11) were enrolled at university by the age of 24. The odds ratio for differences in partici pation was 10.8; for women it was 9.7 and 12.0 for men. Looking at the baby boom and baby bust generations in the elite university era (participation rate <15 per cent), we can say that the participation gap narrowed clearly, especially as concerns men (from 32 to 12.0), yet remaining quite considerable, since the offspring from academic families (born in 1966) still had a 10.8 to 1 chance of studying at university against others.

Looking at the era of mass higher education in the year 2000, 11,000 persons, i.e. 16.6 per cent of the age group born in 1976, had embarked on university-level studies by the age of 24. The number of students from non-academic families was nine times that of students with academic backgrounds (9926 versus 1186). The participation rate for students from academic families (Pa) was 0.60, and for students from non-academic families (Pp) 0.15. The odds ratios for differ ences in participation were 8.2 for the entire group, i.e. 5.9 for women and 9.3 for men. Against the educational expansion experienced, the decrease in odds ratios from 19.1 to 8.2

can be interpreted as a consequence of a family reproduction strategy under which parents want to secure better or at least the same level of education for their offspring as they them selves have had. Together with an increasing number of university study places, this strategy has turned into an educational automat with a mechanism producing a continuous rise in the educational level of the population. A topical question is to which families such a strategy would be reasonable. A more or less hypothetical question, which may actualize even in Nordic countries some day, is how far the equality of educational opportunity policy measures can be extended before they turn in on themselves in terms of mismatch in corresponding employment opportunities, and what kind of educational policy to pursue then.

Returns to university graduates Next, we look at the relative returns to university graduates of the two age groups (born in 1946 and 1966) in the elite university era at two career stages: early (in their thirties) and

mature (in their fifties). We do not, of course, have data on those born in 1966 at the mature career stage, i.e. in the year 2016, so we have to simulate their relative returns in their fifties.

In Figure 4, when family background and gender are not controlled, the relative returns to graduates born in 1966 at the early career stage (1.19) seem to be 8 per cent lower than those of the group born in 1946 (1.29), and as much as 15 per cent lower (1.83 and 2.15, respectively) at the mature career stage, which would support the degree inflation hypothesis. But account must be taken of the number of non-participants and of non-graduates, which has decreased by tens of thousands compared to the increase of only a few hundred in the number of graduates. However, if there is any wage inflation affecting non-graduates, or their earnings have risen instead, does degree inflation, as supported by the evidence presented above, actually tell us more about the labour market effects of non-graduates than that of the graduates. Although our data are also suitable for searching answers to those questions, unfor tunately we cannot do this here due to lack of space.

In Figure 5, male graduates are compared to female graduates by their relative returns. The

returns coefficient values at the early career stage show that male graduates born in 1946 receive lower relative returns (returns coefficient = 0.80) than female graduates at the respec tive age. Gender differences in returns remain fairly stable (0.86) also at the mature career stage for the graduates born in 1946. The male graduates born in 1966, in turn, receive higher relative

239




2.5 -

University graduates born in 1946

2

University graduates born in 1966

co 1.5

0

= 1

0.5

0


Career stage of university graduates

The returns coefficient value of 1.0 equals the average earnings of non-graduates at the respective career stage. The returns coefficient for those born in 1966 at the mature career stage are estimates based on participation rates (Pa and Pp) by the age of 24 (in the year 1990), returns to graduates bom in 1966 at the early career stage (in the year 1995)

and returns to graduates born in 1946 at the mature career stage (in the year 1995).

Figure 4 Relative returns to university graduates born in 1946 and 1966 at early and mature career stages

returns (1.26) than female graduates at the respective age already in their early career stage and 1.30 at the mature career stage.

The participation rate of women born in 1966 is twice that of the 1946 group (12.1 and 5.6, respectively), while of men born in 1966 the rate is 10 per cent less than that of the 1946 group (10.9 and 9.8, respectively). Hence, as far as gender differences in relative returns are concerned, it seems that women have surpassed men in participation, but are behind in relative returns.

However, it is too early to draw any definite conclusions about degree inflation based on our evidence. Nevertheless, our gender comparisons suggest that women may be facing degree inflation to some extent, but this interpretation will only hold water if, for some reason, the labour market value of university degrees over generations is assumed to be constant for males, but not for women. If females' rising participation-declining returns connection is interpreted as degree inflation, then the same pattern should be found in comparisons of males by family background. The participation rate of males from academic homes born in 1966 was clearly lower than that of those born in 1946 with respective background (0.59 and 0.76, respectively), but for the males from non-academic homes born in 1966 the participation rate was, on the contrary, higher than that of those born in 1946 (0.10 and 0.09, respectively). The question is whether the relative returns by family background show corresponding differences.

Figure 6 shows the changes in relative returns to graduates born in 1946 and 1966 from the early career stage to mature stage by family background. Here, we are interested in how the

240




1.40 -

- Male graduates born in 1966

1.20 -

Relative returns of female graduates of respective age group 1.00-._

0.80 _ _ ._._-- Male graduates born in 1946

= 0.60

0.40 -

0.20 -

0.00 -



The returns coefficient value 1.00 equals the relative returns to female university graduates at the respective age. The returns coefficients for those born in 1966 at the mature career stage are estimates based on differences in participation by the age of 24 (in the year 1990), differences in returns to graduates born in 1966 at the early career stage (in the year 1995) and differences in returns to graduates born in 1946 at the mature career stage (in the year 1995).

Figure 5 Returns coefficients for male university graduates born in 1946 and 1966 at early and mature career stages

differences in participation by family background (odds 19.1 for those born in 1946 and 10.8 for those born in 1966) develop further during careers after graduation. As concerns the graduates born in 1946, it can be said that the differences remain the same throughout their careers: at the mature career stage, graduates from academic and non-academic homes gain equally high relative returns (1.40 and 1.38) compared to their early career returns. This pattern does not seem to be repeated for the graduates born in 1966. At the mature career stage, there is a huge gap (3.17) in the 1966 group between those from academic families and those from non-academic homes: graduates from academic homes seem to receive relative returns 2.39 higher compared to their early career returns, while graduates from non-academic homes seem to receive only 0.78 times that of their early career returns.

Let us form a simple indicator by multiplying the differences in participation (phase 1) and the changes in returns differences (phase 2) to describe the differences by family background over the whole transition from the home via university to mature career stage (phase 1 x phase 2). For the 1946 age group we obtain the formula 19.1 x (1.40/1.38) = 19.4. Hence, the differ ences after the first phase practically remained the same in the second phase, resulting in the transition indicator value of 19.4. For the 1966 age group, we obtain the formula 10.8 x

(2.39/0.78) = 33.1. It therefore seems that the tenfold differences in the first phase become even tripled in the second phase, yielding a transition indicator value of 33.1.

241




3 -

2.5 - Graduates from academic homes born in 1966

2 -

o 1.5 - Graduates from academic = / ~~~~~~~~~~~~~~~~~~~~~~~~homes born in 1946

z Relative returns at early raduates from non-academic career stage /_homes born in 1946

Graduates from non-academic homes born in 1966

0.5 -

0



The returns coefficient value 1.0 equals the relative returns of graduates at the early career stage (in their thirties). The returns coefficient for those born in 1966 at the mature career stage are estimates based on differences in participation (odds ratios) by the age of 24 (in the year 1990), differences in returns (returns coefficients) to graduates born in 1966 at the early career stage (in the year 1995), and differences in returns (returns coefficients) to graduates born in 1946 at the mature career stage (in the year 1995).

Figure 6 Changes in relative returns to university graduates born in 1946 and 1966from the early to the mature career stage byfamily background

Finally, we employ the ratio of returns coefficients (RC ratio) in order to enable compari sons of returns to university graduates at the early career stage (in their thirties) controlled by age, gender and family background. The RC ratio is an appropriate tool for this purpose, having respective (statistical) qualities as odds ratio.

Figure 7 shows persistent differences in real returns at the early career stage to university graduates coming from different family backgrounds.3 Using the female graduates from non academic families born in 1946 as the bottom line (= 1), male graduates from academic homes receive returns ranging from 18 (born in 1966) to 31 (born in 1946) times greater than those received by this group at the early career stage. Female graduates from academic homes born in 1946 gain the highest, 32-fold, returns, hence benefiting from university education more than any other group. Female graduates born in 1966, regardless of family background, receive higher returns (RC ratio value 4) at the early career stage than male graduates from non academic family background born in 1946 (RC ratio value 3), but not quite the level enjoyed by male graduates from non-academic homes born in 1966 (RC ratio value 5).

242




1946 F&A_

1946 M&A _

1966 M&A

1966 M&N co

1966 F&N

1966 F&A

1946 M&N

1946 F&N 3

0 5 10 15 20 25 30 35

RC-ratio

1946 and 1966 indicate the year of birth. F indicates female university graduates and M indicates male university

graduates. N indicates non-academic family background and A indicates academic family background.

Figure 7 Real returns (operationalized by the R.C ratio) to university graduates at the early career stage by age,

gender andfamily background (1 =female graduatesfrom non-academic homes born in 1946)

Simulated returns to graduates in the era of mass higher education in

the 2010s

Utilizing odds ratios and corresponding RC ratios at two different career stages, we can simulate returns for university graduates born in 1966 and 1976 in 2016 (Table 2). Note that the participation rate (by the age of 24) of the group born in 1976 is 16.6 per cent, whereas that of graduates born in 1966 is clearly lower at 11.5 per cent. Differences in participation by family background are only slightly narrower among the 1976 group compared to the 1966 group. Differences in participation by gender are equal for both year groups (Table 2).

The increase in the number of participants and in the participation rate from one genera tion to the next has been steady, but when we look at returns at the early career stage, there

are great differences between generations. First, there is an increase from the 1946 group's average earnings of 17,000 in current euros to 19,000 (1966 group), but then again a decrease to the average earnings of 16,000 gained by those born in 1976. The changes in the share of

those earning above average shows a similar trend: from 19 per cent (1946 group) via 23 per cent (1966 group) to 17 per cent (1976 group). In a Collinsian-Goldinian way, these changes could be interpreted as degree inflation. At the mature career stage we are able to compare only two age groups. The average earnings at mature career stage seem to increase from the

36,600 euros earned by the group born in 1946 to the 47,700 euros earned by the 1966 group, which does not indicate degree inflation. However, the shares reaching the above average eamings at the mature career stage decline from 8 per cent to 7 per cent over one generation;

thus, there are ever fewer earning ever more (Table 2). 243




Table 2 Participation in university education and corresponding average earnings at early and mature career stages and the share of graduates earning above the average in three subsequent age groups (1946, 1966 and 1976)

Labour market returns

Graduates eaming Average Graduates

Participation Average above earnings earning above earnings at average at at mature average at

No. of Participation early career early career career stage mature career Age group participants rate (%) stage (euros) stage (%) (euros) stage (%)

1946 8326 7.8 17,000 19 36,600 8 1966 8934 11.5 19,000 23 47,700 7 1976 11,112 16.6 16,000 17 - -

Simulated figures in italics. Average earnings measured in current euros.

As noted earlier, we do not have data available for the 1976 cohort in the year 2006, which would give up-to-date predictions on the forthcoming situation in 2016. However, if we rely on the simulated early career stage returns (average earnings 16,000 euros and 17 per cent earning above that), we can further simulate corresponding figures for the mature career stage, yielding average earnings of 33,100 euros and 12 per cent earning above that. Let it be empha sized that these figures simply provide rough outlines on how the situation of graduates born in 1976 seems to develop further at the mature career stage if the early career stage material izes as simulated here. It seems that participants out of the 11,000 born in 1976, and who graduate before the age of 30, reach almost equal average earnings and in larger numbers than graduates born in 1946 did. However, the average earnings of graduates born in 1966 seem to be out of reach.

When it comes to gender differences, changes in returns to female graduates from academic families show that the greater the share of those attaining a university degree, the lower their returns and the fewer that rise above the level of average returns. It has to be remembered that female graduates from academic families make up the smallest of the four groups specified here. Hence, however drastic the change in the situation of academic women may seem (Figure 7), the degree inflation hypothesis touches just a few of them.

Conclusions In terms of participation in university education, gender equality has been reached in Finland, so to speak. In fact, women make up the majority of university students and completed master's degrees. Empirical evidence from Finland confirms the rule formulated by Martin Trow (1972) three decades ago that an increase in higher education enrolments beyond 15 per cent of the age group requires not merely the further expansion of the elite university system, but the development of new, non-elitist types of higher education suitable for educating the masses. In various European countries, most recently in Austria and Finland, policymakers have acted in recent decades in the way proposed by Trow.

The analyses presented here support the reproductive rule of thumb in previous studies (Bourdieu and Passeron, 1977; Bourdieu, 1988, 1996; Bowles and Gintis, 2002; Collins, 2002), i.e. knowing a person's family background (for example, the educational background of one's parents) is still useful in making predictions about someone's educational achievements and career prospects.

24U4




In three decades, the odds ratios for differences in participation in university education between those from academic and non-academic families have shrunk from 19 to 8; men's ratios from 32 to 9 and women's from 13 to 6. These figures show that inequality of educational opportunities has clearly diminished. However, we have to say that in the year 2000 the oppor tunities for children of academically trained parents are still considerable, i.e. eight times greater than for children from non-academic families. We conclude that, during the past three decades, Finnish higher education has, nonetheless, been transformed from an elite system, favouring the male offspring of academic families, to a mass system, for relatively small age groups with the majority of students being women. Whereas the number of female students has doubled and their share of each age group participating in university education almost trebled, the number of male students has by and large remained the same. However, the development has been different as concerns returns. In the early career stage,

the relative returns are quite low for both men and women born in 1966 as compared to the 1946 generation. It might be tempting to interpret this as degree inflation. However, our simu lations show that at the mature career stage the returns of those born in 1966 will be much higher than those enjoyed by Finnish graduates born in 1946. In this respect, there seems to be no degree inflation. Nevertheless, it is to be remembered that the share of those reaching high returns diminishes. Instead of degree inflation it is more appropriate to talk about human risk capital as concerns university education.

The Collinsian-Goldinian degree inflation hypothesis claims that when the number of degrees at a certain level increases enough, the labour market value of those degrees actually decreases. Now it seems to be clear that the relatively high returns to university graduates are still the privilege of men from academic families and there is no inflation concerning men from academic families. As for women, the degree inflation seems to hit especially the group of women born in 1966 and 1976 from academic families at the early career stage as compared to respective graduates born in 1946 - it is good to remember that, in numbers, this touches very few persons.

Generally speaking, the changes in returns to university graduates over two decades seem to follow an intergenerational mechanism, where university education, so to speak, turns from one generation's human capital into the subsequent generation's human risk capital (see Kivinen and Ahola, 1999). Relative returns to both male and female graduates with an academic background are low at the early career stage for the age group born in 1966. Although their relative returns at the mature career stage are expected to be higher than those of the 1946 group, ever fewer will reach the average returns; even the human capital of offspring of academic families bom in 1946 seems to be transforming into human risk capital of the respec tive group born in 1966. Graduates from non-academic families, however, can hardly avoid risks from one generation to the next.

Notes

1. Along with the Italian and Austrian systems, the Finnish higher education system had, until 2005, differed from that in other European countries in that all degrees are master's degrees awarded by universities. Hence, Finnish empirical analyses of differences in participation concern the master's

degree; regardless of a few exceptions, Finnish universities have not awarded lower degrees. Following their foundation in 1995, Finnish AMK institutions (polytechnics) have awarded polytechnic degrees corresponding mainly with the bachelor's degree. The Bologna process, now underway within the EU, has meant a change in the Finnish degree system to correspond with the Anglo-American two-tier one.

2. By an academic family background we mean families in which at least one of the parents holds a master's or doctor's degree, and by a non-academic family background we mean all other families.

In Finland, a 5-year master's degree was the basic degree until 2005 when, along with harmonization

of the degree system within the EU, a two-tier system with bachelor's and master's degrees was

introduced.

245




3. The term 'real returns' as opposed to 'gross returns' refers to controlling for the rate of change in the

average gross earnings of the control group (respective non-graduates). In traditional rate of return to

education studies, changes in the reference level are usually left uncontrolled, which makes it extremely difficult to compare estimated rates of return between date, age, gender or family background, let alone between studies. In other words, estimated rates of return are often presented as points, whereas we

prefer interval estimates presented as curves to capture relevant changes in differences in returns to

university graduates.

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Biographical Note: Osmo Kivinen is Professor in Sociology of Education and Dean of the Faculty of Social Sciences at the University of Turku. His research interests include: interrelations between education and work, comparisons of educational systems, education and science policy and American pragmatism.

Address: Osmo Kivinen, Research Unit for the Sociology of Education (RUSE), FIN-20014 University of Turku, Finland. [email: [email protected]]

Biographical Note: Juha Hedman is Researcher at the Research Unit for the Sociology of Education (RUSE), University of Turku. His research focuses on the economics of education.

Address: Juha Hedman, Research Unit for the Sociology of Education (RUSE), FIN-20014 University of Turku, Finland. [email: [email protected]]

Biographical Note: Paivi Kaipainen is Coordinator and postgraduate student at the Research Unit for the Sociology of Education (RUSE), University of Turku, Finland.

Address: Paivi Kaipainen, Research Unit for the Sociology of Education (RUSE), FIN-20014 University of Turku, Finland. [email: [email protected]]

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Documents

From Elite University to Mass Higher Education: Educational Expansion, Equality of Opportunity and Returns to University Education