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The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU

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  • Angel De La Fuente
  • Juan Francisco Jimeno

Abstract

This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under conditions that approximate general equilibrium.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 152.

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Date of creation: Dec 2004
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Handle: RePEc:bge:wpaper:152

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Citations

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Cited by:
  1. Gjipali Arsena & Kristo Suela, 2011. "Mincer Rates Of Return To Education In The Emerging Economy Of Albania," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(2), pages 27-36, August.
  2. Simeonova-Ganeva, Ralitsa, 2006. "Влияние На Човешкия Капитал Върху Икономическия Растеж (България, 1949-2005 Г.)
    [The Impact of Human Capital on the Economic Growth (Bulgari
    ," MPRA Paper 37244, University Library of Munich, Germany.
  3. Mendolicchio, Concetta & Rhein, Thomas, 2011. "The gender gap of returns on education across West European countries," IAB Discussion Paper 201120, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Luis J. Álvarez & Emmanuel Dhyne & Marco Hoeberichts & Claudia Kwapil & Hervé Le Bihan & Patrick Lünnemann & Fernando Martins & Roberto Sabbatini & Harald Stahl & Philip Vermeulen & Jouko Vilmunen, 2006. "Sticky Prices in the Euro Area: A Summary of New Micro-Evidence," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 575-584, 04-05.
  5. Adela Luque, 2005. "Skill mix and technology in Spain: evidence from firm level data," Banco de Espa�a Working Papers 0513, Banco de Espa�a.
  6. Blázquez, Maite & Ramos, Jose, 2008. "Recent Investments in Human Capital and its Effect on the Chances of Escaping from Low-Paid Jobs: The Spanish Case," Working Papers in Economic Theory 2008/03, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  7. Almudena Sevilla-Sanz & Cristina Fernandez, 2006. "Social Norms and Household Time Allocation," Economics Series Working Papers 291, University of Oxford, Department of Economics.
  8. repec:ese:iserwp:2006-38 is not listed on IDEAS

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