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Rates of Return to Education: The View of Students in Switzerland

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Author Info
Wolter, Stefan C. () (Swiss Coordination Centre for Research in Education (SKBF), University of Berne and IZA, Bonn)
Zbinden, André (Department of Economics, University of Berne)

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Abstract

Wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in 10 European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. While most of the deviation of individual expectations from actual wages can not be explained, we find that rates of return to education that are calculated on the base of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self-perception of their academic performance and their subjective job perspectives. The high degree of unexplained heterogeneity in individual expectations and the differences between groups of students show the necessity to analyse the question further with bigger and more representative samples.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 371.

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Length: 16 pages
Date of creation: Sep 2001
Date of revision:
Handle: RePEc:iza:izadps:dp371

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Related research
Keywords: Rates of return to education; wages; expectations;

Other versions of this item:

Find related papers by JEL classification:
C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data
I20 - Health, Education, and Welfare - - Education - - - General
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60 National Bureau of Economic Research, Inc. [Downloadable!]
  2. Jeff Dominitz & Charles F. Manski, 1994. "Using Expectations Data to Study Subjective Income Expectations," NBER Working Papers 4937, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Jeff Dominitz & Charles F. Manski, 1994. "Eliciting Student Expectations of the Returns to Schooling," NBER Working Papers 4936, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Brunello, Giorgio & Lucifora, Claudio & Winter-Ebmer, Rudolf, 2001. "The Wage Expectations of European College Students," CEPR Discussion Papers 2817, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August. [Downloadable!] (restricted)
  6. Josef Fersterer & Rudolf Winter-Ebmer, 2000. "Smoking, discount rates, and returns to education," Economics working papers 2000-02, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
    Other versions:
  7. Charles T. Clotfelter & Michael Rothschild, 1993. "Studies of Supply and Demand in Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot93-1.
  8. Psacharopoulos, George, 1996. "Economics of education: A research agenda," Economics of Education Review, Elsevier, vol. 15(4), pages 339-344, October. [Downloadable!] (restricted)
  9. repec:att:wimass:199110 is not listed on IDEAS
  10. Wolter, Stefan C, 2000. "Wage Expectations: A Comparison of Swiss and US Students," Kyklos, Blackwell Publishing, vol. 53(1), pages 51-69.
  11. Carvajal, Manuel J. & Bendana, David & Bozorgmanesh, Alireza & Castillo, Miguel A. & Pourmasiha, Katayoun & Rao, Priya & Torres, Juan A., 2000. "Inter-gender differentials between college students' earnings expectations and the experience of recent graduates," Economics of Education Review, Elsevier, vol. 19(3), pages 229-243, June. [Downloadable!] (restricted)
  12. Dolton, Peter J & Makepeace, G H, 1990. "The Earnings of Economics Graduates," Economic Journal, Royal Economic Society, vol. 100(399), pages 237-50, March. [Downloadable!] (restricted)
  13. Hessel Oosterbeek & Hans van Ophem, 2000. "Schooling choices: Preferences, discount rates, and rates of return," Empirical Economics, Springer, vol. 25(1), pages 15-34. [Downloadable!] (restricted)
  14. Schmalensee, Richard, 1976. "An Experimental Study of Expectation Formation," Econometrica, Econometric Society, vol. 44(1), pages 17-41, January. [Downloadable!] (restricted)
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