Risk-return trade-offs to different educational paths: vocational, academic and mixed
Purpose - The purpose of this paper is to investigate the rates of return and the risks of different types of educational paths – all leading to a tertiary educational degree. The paper seeks to distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. Design/methodology/approach - The paper studies the labor market outcome to 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. Entrepreneurs are separated from employees in order to examine whether for the same combination of education the labour market outcomes differ between the two groups. Findings - The 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, for entrepreneurs a high return is also associated with a high income variance. Research limitations/implications - The findings provide evidence for the existence of complementarities between vocational and academic education. Further research on mixed educational paths might provide more insight into this presumed relationship. Practical implications - Since the results indicate that mixed educational paths are a worthwhile strategy, the permeability of a national education system is a very important educational policy issue. Originality/value - The study is innovative in three ways: first, it focuses on complete educational paths and not just the highest educational degree. Second, an alternative measure, the Baldwin rate of return, is used to assess the profitability attached to different educational paths. Third, the income risk associated with each educational path is calculated.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 31 (2010)
Issue (Month): 5 (August)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/ijm.htm Email:
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.:
- Hartog, Joop & Vijverberg, Wim P., 2002. "Do Wages Really Compensate for Risk Aversion and Skewness Affection?," IZA Discussion Papers 426, Institute for the Study of Labor (IZA).
- Wolter Stefan C. & Weber Bernhard A., 1999. "On the Measurement of Private Rates of Return to Education / Ein Ansatz zur Messung privater Bildungsrenditen," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 218(5-6), pages 605-618, October.
- Lorraine Dearden, 1999. "Qualifications and earnings in Britain: how reliable are conventional OLS estimates of the returns to education?," IFS Working Papers W99/07, Institute for Fiscal Studies.
- Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 29-36, May.
- Schweri, Juerg & Hartog, Joop & Wolter, Stefan C., 2011.
"Do students expect compensation for wage risk?,"
Economics of Education Review,
Elsevier, vol. 30(2), pages 215-227, April.
- Jürg Schweri & Stefan C. Wolter & Joop Hartog, 2008. "Do Students Expect Compensation for Wage Risk?," Economics of Education Working Paper Series 0011, University of Zurich, Department of Business Administration (IBW).
- Schweri, Jürg & Hartog, Joop & Wolter, Stefan C., 2009. "Do Students Expect Compensation for Wage Risk?," IZA Discussion Papers 4069, Institute for the Study of Labor (IZA).
- Pedro Telhado Pereira & Pedro Silva Martins, 2004. "Returns to education and wage equations," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 525-531.
- Pereira, Pedro T. & Martins, Pedro S., 2001. "Returns to Education and Wage Equations," IZA Discussion Papers 298, Institute for the Study of Labor (IZA).
- Marco Caliendo & Frank Fossen & Alexander Kritikos, 2009. "Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey," Small Business Economics, Springer, vol. 32(2), pages 153-167, February.
- Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally-Validated Survey," IZA Discussion Papers 2168, Institute for the Study of Labor (IZA).
- Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally Validated Survey," Discussion Papers 252, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
- Marco Caliendo & Frank M. Fossen & Alexander S. Kritikos, 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally-Validated Survey," Discussion Papers of DIW Berlin 600, DIW Berlin, German Institute for Economic Research.
- Dearden, Lorraine, et al, 2002. "The Returns to Academic and Vocational Qualifications in Britain," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 249-274, July.
- Lorraine Dearden & Steven McIntosh & Michal Myck & Anna Vignoles, 2000. "The Returns to Academic and Vocational Qualifications in Britain," CEE Discussion Papers 0004, Centre for the Economics of Education, LSE.
- Kierulff, Herbert, 2008. "MIRR: A better measure," Business Horizons, Elsevier, vol. 51(4), pages 321-329.
- Ignacio Palacios-Huerta, 2003. "An Empirical Analysis of the Risk Properties of Human Capital Returns," American Economic Review, American Economic Association, vol. 93(3), pages 948-964, June.
- Ignacio Palacios-Huerta, 2001. "An Empirical Analysis of the Risk Properties of Human Capital Returns," Working Papers 2001-10, Brown University, Department of Economics.
- Brunello, Giorgio & Comi, Simona, 2004. "Education and earnings growth: evidence from 11 European countries," Economics of Education Review, Elsevier, vol. 23(1), pages 75-83, February.
- Brunello, Giorgio & Comi, Simona, 2000. "Education and Earnings Growth: Evidence from 11 European Countries," IZA Discussion Papers 140, Institute for the Study of Labor (IZA).
- Christiansen, Charlotte & Joensen, Juanna Schroter & Nielsen, Helena Skyt, 2007. "The risk-return trade-off in human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 971-986, December.
- Christiansen, Charlotte & Joensen, Juanna Schrøter & Nielsen, Helena Skyt, 2006. "The Risk-Return Trade-Off in Human Capital Investment," IZA Discussion Papers 1962, Institute for the Study of Labor (IZA).
- Charlotte Christiansen & Juanna Schröter Joensen, 2006. "The Risk-Return Trade-Off in Human Capital Investment," Economics Working Papers 2006-02, Department of Economics and Business Economics, Aarhus University.
- Ziderman, Adrian, 1973. "Does it Pay to Take a Degree?," Oxford Economic Papers, Oxford University Press, vol. 25(2), pages 262-274, July.
- Matthias Benz & Bruno S. Frey, 2008. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," Economica, London School of Economics and Political Science, vol. 75(298), pages 362-383, 05.
- Bruno S. Frey & Matthias Benz, "undated". "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," IEW - Working Papers 135, Institute for Empirical Research in Economics - University of Zurich.
- Bruno S. Frey & Matthias Benz, 2003. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," CESifo Working Paper Series 959, CESifo Group Munich.
- Ekelund, Jesper & Johansson, Edvard & Jarvelin, Marjo-Riitta & Lichtermann, Dirk, 2005. "Self-employment and risk aversion--evidence from psychological test data," Labour Economics, Elsevier, vol. 12(5), pages 649-659, October.
- Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
- Hartog, Joop & Vijverberg, Wim P.M., 2007. "On compensation for risk aversion and skewness affection in wages," Labour Economics, Elsevier, vol. 14(6), pages 938-956, December.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- George Psacharopoulos & Richard Layard, 1979. "Human Capital and Earnings: British Evidence and a Critique," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 485-503. Full references (including those not matched with items on IDEAS)