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The UK government has expressed a desire to increase social mobility, with policies to help achieve this aim focused on reducing inequalities in educational attainment. This paper draws together established and new information about the contribution that higher education can make to social mobility using a life-course approach, considering differences by family background in terms of university attendance and achievement, as well as occupation and earnings following graduation. We find substantial socio-economic differences at each stage. Young people from poorer backgrounds are, on average, less likely to go to university than their richer peers. Even among the selected group who do go to university, they are less likely to attend the highest status institutions, less likely to graduate, and less likely to achieve the highest degree classes. These differences in degree outcomes contribute to the lower average earnings of graduates from poorer families, but earnings differentials go well beyond those driven purely by degree attainment or institution attended. The evidence strongly suggests that, even after taking these factors into account, graduates from affluent families are more likely to obtain a professional job and to see higher earnings growth in the labour market. We discuss the implications of these findings for the prospects of higher education as a route to greater social mobility.

Summary.  The paper makes use of newly linked administrative education data from England to understand better the determinants of participation in higher education (HE) among individuals from low socio‐economic backgrounds. The data are unique in being able to follow the population of two cohorts of pupils in England—those who might have entered HE between 2004–2005 and 2006–2007—from age 11 to age 20 years. The findings suggest that, although large differences in HE participation rates and participation rates at high status universities by socio‐economic background remain, these differences are substantially reduced once prior achievement is included. Moreover, these findings hold for both state and private school pupils. This result suggests that poor achievement in secondary schools is more important in explaining lower HE participation rates among pupils from low socio‐economic backgrounds than barriers arising at the point of entry to HE. These findings are consistent with the need for earlier policy intervention to raise HE participation rates among pupils from low socio‐economic backgrounds.

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As in many European countries, labour productivity in the UK has been stagnant since the start of the Great Recession. This article uses individual data on employment and wages to try to understand whether real wage flexibility can help shed light on the UK's productivity puzzle. It finds, perhaps unsurprisingly, that workforce composition cannot explain the reduction in wages and hence productivity that we observe, even compared to previous recessions; instead, real wages have fallen significantly within jobs this time round. Why? One possibility we investigate is that the labour supply in the UK is higher compared to previous recessions. The Macroeconomic ContextThe UK has recently experienced its deepest recession since the Second World War, with real GDP falling by over 6% (see Figure 1). At the same time, there have been substantially smaller falls in employment and hours -decreasing by just over 2% and 4% respectively -leading to falling output per worker and stagnating output per hour. These changes are very different to what happened in previous recessions in the UK in the late 1970s/early 1980s and the early 1990s. For example, Figure 2 shows that, nearly five years later, real output per hour remains 3% lower than it was at the start of the recession in 2008, while it was nearly 15% higher following the recession in the early 1990s and nearly 13% higher following the recession in the early 1980s. This has given rise to a so-called 'productivity puzzle' in the UK.The aim of this article is to try to shed light on this puzzle. In a competitive economy, one would expect individuals' wages to reflect their marginal productivities, thus one might anticipate changes in productivity to be correlated with changes in wages at some micro level. We thank participants in the CEP/IFS workshops and the 2013 Royal Economic Society special session on the productivity puzzle for helpful comments and discussion, Rowena Crawford for allowing us to use the data on wealth shocks that she constructed for respondents in the English Longitudinal Study of Ageing and for providing useful comments and advice, and Jonathan Cribb for producing the counterfactual employment rates for men and women as a result of the increase in the state pension age for women. The article is based partly on data accessed through the Secure Data Service and uses data sets which may not exactly reproduce aggregate