Returns to education in the Irish youth labour market

Using data from two large-scale household surveys in 1987 and 1994, we esti mate wage equations which show substantial increases in returns to universi ty education for young Irish workers over the period, despite the exception al increase in numbers with these qualifications. Returns to nondegree thir d level certificates and diplomas fell in relative terms, but returns to qu alifications obtained by those leaving school at about 16 years of age rose . We argue that the increased return to university education primarily refl ects the generalised shift in demand towards skilled labour internationally and the open nature of the Irish labour market. However, a floor may have been placed under earnings for low-skilled youth by the increased generosit y of income support available to them. JEL classification: J31.