Returns to Education across Europe
AbstractIncentives to invest in higher education are affected by both the direct wage effect of human capital investments and the indirect wage effect resulting from lower unemployment risks and shorter spells in unemployment associated with higher educated. We analyse the returns to education in Austria, Germany, Italy, Sweden and the United Kingdom, countries which differ significantly regarding both their education systems and labour market structure. We estimate augmented Mincerian wage equations accounting for the effects of unemployment on individual wages using EU-SILC data. Across countries we find a high variation of the effect of education on unemployment duration. Overall, the returns to education are estimated to be the highest in the UK, and the lowest for Sweden. A wage decrease due to time spent in unemployment results in a decline in the hourly wages in Austria, Germany and Italy.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8568.
Date of creation: Sep 2011
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Find related papers by JEL classification:
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-22 (All new papers)
- NEP-EDU-2011-09-22 (Education)
- NEP-EUR-2011-09-22 (Microeconomic European Issues)
- NEP-HRM-2011-09-22 (Human Capital & Human Resource Management)
- NEP-LAB-2011-09-22 (Labour Economics)
- NEP-LMA-2011-09-22 (Labor Markets - Supply, Demand, & Wages)
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