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Education and Earnings Growth: Evidence from 11 European Countries

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  • Brunello, Giorgio

    ()
    (University of Padova)

  • Comi, Simona

    ()
    (University of Milan Bicocca)

Abstract

We use cohort data from 11 European countries to study whether experience profiles differ by educational attainment. Previous literature does not provide a clear answer to this question, that is important to evaluate private returns to education over the working life of individuals. We find evidence that employees with tertiary education have steeper experience profiles than employees with upper secondary or compulsory education. Hence, education provides not only an initial labor market advantage but also a permanent advantage that increases with time in the labor market. We also find that differences in earnings growth by education are lower in countries with a higher level of corporatism and higher in countries which have experienced both relatively fast labor productivity growth and a relatively low educational attainment. The educational system also seems to matter, because countries with a more stratified system of secondary education have smaller differences in earnings growth by education.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 140.

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Length: 31 pages
Date of creation: Apr 2000
Date of revision:
Publication status: published in: Economics of Education Review, 2004, 23 (1), 75-83
Handle: RePEc:iza:izadps:dp140

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Keywords: Education; earnings growth; Europe;

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  1. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain The Rising Return To College For Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(2), pages 705-746, May.
  2. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, Econometric Society, vol. 68(5), pages 1029-1054, September.
  3. Oded Galor & Omer Moav, 2000. "Ability-Biased Technological Transition, Wage Inequality, And Economic Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(2), pages 469-497, May.
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  5. Layard, Richard & Psacharopoulos, George, 1974. "The Screening Hypothesis and the Returns to Education," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(5), pages 985-98, Sept./Oct.
  6. repec:fth:coluec:455 is not listed on IDEAS
  7. Joseph G. Altonji & Charles R. Pierret, 1997. "Employer Learning and Statistical Discrimination," NBER Working Papers 6279, National Bureau of Economic Research, Inc.
  8. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, National Bureau of Economic Research, Inc, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  9. Knight, J B & Sabot, R H, 1981. "The Returns to Education: Increasing with Experience or Decreasing with Expansion?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 43(1), pages 51-71, February.
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  12. Neuman, Shoshana & Weiss, Avi, 1995. "On the effects of schooling vintage on experience-earnings profiles: Theory and evidence," European Economic Review, Elsevier, Elsevier, vol. 39(5), pages 943-955, May.
  13. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers, Centre for Economic Performance, LSE dp0407, Centre for Economic Performance, LSE.
  14. Joseph G. Altonji & Thomas A. Dunn, 1995. "The Effects of School and Family Characteristics on the Return to Education," NBER Working Papers 5072, National Bureau of Economic Research, Inc.
  15. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers, OECD Publishing 131, OECD Publishing.
  16. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number minc74-1.
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