Economic impact assessment of the CCPMO: Final report - CIPD

Section 4
The economic return to professional qualifications
4.4.3 Assessing the lifetime benefits
The analysis above indicates that professional qualifications and membership
of a professional institute are associated with significant benefits in terms of
higher wages. In this section, we quantify these benefits, and place them in
present value terms (i.e. the value to an individual in today’s money terms).
As mentioned above, in estimating the lifetime benefits, it is also important to
account for the fact that as well as affecting wages, qualifications also affect
the labour market outcomes achieved (i.e. the probability of being employed).
We estimate this effect using a series of non-linear regressions 32 where the
dependent variable was whether or not the individual was employed and the
independent variables consist of a range of personal and regional
characteristics.
The results of these estimates are displayed in Table 6. There is evidence of
significant impacts on the probability of being employed for some, although
not all, age groups. This is particularly true for women, with the results
suggesting that holding professional qualifications is associated with an
increase in the probability of being employed by up to 14 percentage points.
Table 6: Employment probabilities by qualification level (additional
probability of being employed)
Men
Women
Professional
qualifications
Membership of
prof. institute
Professional
qualifications
Membership of
prof. institute
25-29 0.07 0.00 0.12 0.00
30-34 0.00 0.00 0.14 0.00
35-39 0.00 0.00 0.09 0.11
40-44 0.03 0.00 0.05 0.00
45-49 0.03 0.00 0.06 0.00
50-54 0.00 0.09 0.00 0.00
55-59 0.03 0.00 0.09 0.20
60-64 0.06 0.00 n.a. n.a.
Note: The results indicate the additional probability of being employed, given that the particular
qualification is held. For instance, a 45-49 year-old man with professional qualifications is estimated to be 3
percentage points more likely to be employed than a man without such qualifications. Results set equal to
zero if not statistically significant at a 10% significance level.
Source: London Economics based on Labour Force Survey.
32
In this case, we estimated a probit model since the dependent variable is binary (0, 1) rather than
continuous as in the case of earnings.
London Economics
December 2008 32