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Upgrading the Low Skilled: Is Public Provision of Formal Education a Sensible Policy?

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Author Info

  • Stenberg, Anders

    ()
    (Swedish Institute for Social Research, Stockholm University)

Abstract

At various political levels, including the OECD and the EU, it is repeatedly emphasized that upgrading the low skilled is an important area for the economic and social development of modern societies. Employers are typically reluctant to train low skilled, who in their turn are unwilling to participate due to financial constraints or a perception of low quality and/or returns to training. If this is a market imperfection, a possible remedy is suggested by public provision of formal education where enrollees are eligible for financial support. However, the costs may be large and the economic returns to formal adult education (AE) for low skilled, a crucial measure to assess if expenses should be increased or decreased, is a virtually unexplored issue. This study uses Swedish register data 1990-2004 of low skilled siblings aged 24-43 in 1994 to estimate difference-indifference- in-differences models which include family fixed effects. It is found that a year of AE improves earnings by 4.4 per cent, but calculations indicate that the private returns alone only roughly cover the costs incurred by society, implying that social returns to AE are needed to justify the expenses.

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Bibliographic Info

Paper provided by Swedish Institute for Social Research in its series Working Paper Series with number 1/2009.

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Length: 37 pages
Date of creation: 19 Jan 2009
Date of revision:
Handle: RePEc:hhs:sofiwp:2009_001

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Related research

Keywords: Human capital; adult education; earnings;

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Cited by:
  1. Hällsten, Martin, 2012. "Is it ever too late to study? The economic returns on late tertiary degrees in Sweden," Economics of Education Review, Elsevier, vol. 31(1), pages 179-194.
  2. Hall, Caroline, 2013. "Does more general education reduce the risk of future unemployment? Evidence from labor market experiences during the Great Recession," Working Paper Series, Center for Labor Studies 2013:10, Uppsala University, Department of Economics.
  3. de Luna, Xavier & Stenberg, Anders & Westerlund, Olle, 2008. "Can Adult Education Delay Retirement from the Labour Market?," Working Paper Series 6/2008, Swedish Institute for Social Research.
  4. Schulte-Braucks, Philipp, 2013. "Von Schweden lernen: Weiterbildung gering Qualifizierter im Rahmen der kommunalen Erwachsenenbildung (Komvux)," Discussion Papers, Research Unit: Skill Formation and Labor Markets SP I 2013-502, Social Science Research Center Berlin (WZB).
  5. Grönqvist, Hans & Hall, Caroline, 2013. "Education policy and early fertility: Lessons from an expansion of upper secondary schooling," Economics of Education Review, Elsevier, vol. 37(C), pages 13-33.

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