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The Private Internal Rates of Return to Tertiary Education: New Estimates for 21 OECD Countries

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  • Romina Boarini
  • Hubert Strauss
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    Abstract

    This study provides estimates of the private Internal Rates of Return (IRR) to tertiary education for women and men in 21 OECD countries, for the years between 1991 and 2005. IRR are computed by estimating labour market premia on cross-country comparable individual-level data. Labour market premia are then adjusted for fiscal factors and education cost. Returns to an additional year of tertiary education are, on average, above 8% and vary in a range from 4 to 15% in the countries and in the period under study. IRR are relatively homogenous across gender. Overall, a slightly increasing trend is observed over time. The study discusses various policy levers for shaping individual incentives to invest in tertiary education and provides some illustrative quantification of the impact of policy changes on those incentives. Les taux de rendement privés de l'éducation supérieure : nouvelles estimations pour 21 pays de l'OCDE Cette étude fournit des estimations des taux de rendement privés de l'éducation supérieure, pour les hommes ainsi que pour les femmes, dans 21 pays de l'OCDE et pour les années comprises entre 1991 et 2005. Les rendements sont calculés en estimant les primes sur le marché du travail à partir de données individuelles comparables entre les pays. Ces primes sont ensuite corrigées par des facteurs fiscaux et par les coûts de l'éducation. Les rendements d'une année supplémentaire d'enseignement supérieur sont en moyenne supérieurs à 8%, et varient dans un intervalle de 4% à 15% entre pays et pour la période considérée. Les rendements sont à peu près les mêmes pour les hommes et pour les femmes. Dans l'ensemble, une légère tendance à la hausse apparaît dans la période d'observation. L'étude examine l’influence des différentes politiques sur les incitations individuelles à investir dans l'éducation supérieure et propose des estimations de l'impact des réformes sur ces incitations.

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    File URL: http://dx.doi.org/10.1787/031008650733
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 591.

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    Date of creation: 20 Dec 2007
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    Handle: RePEc:oec:ecoaaa:591-en

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    Keywords: labour market premia; Investment in tertiary education; returns to education; Rendements de l’éducation; Primes du marché du travail; éducation supérieure;

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    Cited by:
    1. Andrea Ichino & Loukas Karabarbounis & Enrico Moretti, 2010. "The Political Economy of Intergenerational Income Mobility," NBER Working Papers 15946, National Bureau of Economic Research, Inc.
    2. Andrew Sharpe & Jean-François Arsenault, 2009. "A Review of the Potential Impacts of the Métis Human Resources Development Agreements in Canada," CSLS Research Reports 2009-01, Centre for the Study of Living Standards.
    3. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.

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