Risk-Return Trade-Offs to Complete Educational Paths: Vocational, Academic and Mixed
AbstractThis paper investigates the rates of return and the risks of different types of educational paths after compulsory education. We distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. To study the labor market outcome we compare earnings and calculate net return rates as well as risk measures to investigate whether different educational paths are characterized by different risk-return trade-offs. We use Lazear’s jack-of-all-trades theory on entrepreneurship to derive testable predictions about the labour market outcome of different combinations of education for entrepreneurs and employees. Our empirical results are based on the Swiss Labor Force Survey (SLFS) and demonstrate that mixed educational paths are well rewarded in the labor market. However, a high return is also associated with a high income variance which is driven by those who end up as entrepreneurs.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0031.
Length: 32 pages
Date of creation: Jun 2008
Date of revision:
Publication status: published
risk-return trade-off; complete educational paths; occupational choice;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- M53 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Training
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-06 (All new papers)
- NEP-EDU-2008-08-06 (Education)
- NEP-ENT-2008-08-06 (Entrepreneurship)
- NEP-HRM-2008-08-06 (Human Capital & Human Resource Management)
- NEP-LAB-2008-08-06 (Labour Economics)
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- Regula Geel & Uschi Backes-Gellner, 2010. "Earning While Learning: Labor Market Returns to Student Employment During Tertiary Education," Economics of Education Working Paper Series 0049, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Polona Domadenik & Dasa Farcnik, 2011. "Did Bologna reform improve school-to-work transition of graduates? Evidence from Slovenia," Investigaciones de Economía de la Educación volume 6, in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 40, pages 649-665 Asociación de Economía de la Educación.
- Uschi Backes-Gellner & Johannes Mure, 2008. "The Swiss Leading House on Economics of Education, Firm Behaviour and Training Policies," Economics of Education Working Paper Series 0014, University of Zurich, Institute for Strategy and Business Economics (ISU).
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