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The gender gap of returns on education across West European countries

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  • Concetta Mendolicchio
  • Thomas Rhein

Abstract

Purpose - – The purpose of this paper is to study the gender specific private returns on education (RE) in Europe in a comparative perspective. The authors extend the model of de la Fuente (2003) by estimating the parameters by gender and introducing maternity leaves and benefits. The paper analyses the impact of the public policy variables evaluating the elasticities with respect to unemployment benefits, marginal and average tax rates, maternity leave and childcare benefits. Design/methodology/approach - – The authors estimate the Mincerian coefficients, with the Heckman’ selection model, for 12 West European countries using the EU-SILC data. The authors then use them as input to calibrate the decision model. Findings - – The RE of females tend to be higher than those of males in all the Europeans countries but Germany, the Netherlands and Sweden. The gender gap can be explained mainly by the wage premia and labour income taxes which more than compensate the negative effects on females’ returns triggered by higher unemployment rates and maternity-related benefits. Practical implications - – The tax system has the most pronounced effect on RE. An increase in the marginal tax rates has a negative impact. An increase in the average tax rates can have a negative or positive impact, depending on the progressivity of the tax system. An increase in unemployment benefits and maternity or child-care benefits has a negative but fairly small impact. Social implications - – The analysis considers just one dimension of maternity related policies: the effect on RE and differences across gender. These policies may have aims which are beyond the scope of this paper, for instance to increase fertility. From this viewpoint, the small values of the elasticities presented are reassuring in that they suggest that they can be implemented at a fairly small cost in terms of investment in human capital. Originality/value - – The authors compute the RE using a model which allows us to take into account and assess the significance of relevant variables: wage premium, income tax, some public transfers and benefits, costs of the investments. Moreover, the authors estimate the wage premia using relatively recent EU-SILC data. Finally, the paper compares 12 EU countries spanning quite different labour market conditions and institutions.

Suggested Citation

  • Concetta Mendolicchio & Thomas Rhein, 2014. "The gender gap of returns on education across West European countries," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(3), pages 219-249, May.
    • Handle: RePEc:eme:ijmpps:v:35:y:2014:i:3:p:219-249
    DOI: 10.1108/IJM-02-2013-0026
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    Cited by:

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    2. Asadullah, M. Niaz & Xiao, Saizi, 2020. "The changing pattern of wage returns to education in post-reform China," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 137-148.
    3. Mendolicchio, Concetta & Rhein, Thomas, 2012. "Ländervergleich in Westeuropa: Wo sich Bildung für Frauen mehr lohnt als für Männer," IAB-Kurzbericht 201205, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Martina Mysíková & Jiří Večerník, 2019. "Returns to Tertiary Education in Western and Eastern Europe," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(1), pages 30-48.
    5. Schäfer Andrea & Gottschall Karin, 2016. "Zahlt sich Akademisierung aus?: Geschlechtsspezifische Lohnniveaus und Erträge von höherer Bildung in Pflege- und ärztlichen Berufen," Arbeit, De Gruyter, vol. 25(3-4), pages 125-145, December.
    6. M Niaz Asadullah & Saizi Xiao, 2019. "Labor Market Returns to Education and English Language Skills in the People's Republic of China: An Update," Asian Development Review, MIT Press, vol. 36(1), pages 80-111, March.
    7. repec:prg:jnlpep:v:preprint:id:686:p:1-19 is not listed on IDEAS
    8. Martina Mysikova & Jiri Vecernik, 2015. "Returns to education in transition and advanced European countries: The role of an expansion of higher education," Investigaciones de Economía de la Educación volume 10, in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 44, pages 865-886, Asociación de Economía de la Educación.

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    More about this item

    Keywords

    Education; Europe; Public policy; Human capital;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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