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How different are returns to education? Evidence from German school choices

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  • Dörte Dömeland

Abstract

This study presents estimates of returns to post-secondary education and wage differentials among graduates fromdifferent secondary schools in Germany. I use an empirical model that captures the basic features of the German education system. It controls for selection into post-secondary education and treats latter as endogenous in the wage equation. My results show that OLS estimates are severely biased. The direction of the bias depends on the secondary school type. Annual returns to post-secondary education differ significantly: they are eight times higher for graduates from the highest secondary school than for graduates from the lowest secondary school.

Suggested Citation

  • Dörte Dömeland, 2002. "How different are returns to education? Evidence from German school choices," Economics Working Papers 610, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:610
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    References listed on IDEAS

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    More about this item

    Keywords

    Education; endogenous switching; wage differentials;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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