IDEAS home Printed from https://ideas.repec.org/a/iza/izawol/journly2014n92.html
   My bibliography  Save this article

Is the return to education the same for everybody?

Author

Listed:
  • Douglas Webber

    (Temple University, USA, and IZA, Germany)

Abstract

A postsecondary degree is often held up as the one sure path to financial success. But is that true regardless of institutional quality, discipline studied, or individual characteristics? Is a college degree always worth the cost? Students deciding whether to invest in college and what field to study may be making the most important financial decision of their lives. The return to education varies greatly by institutional quality, discipline, and individual characteristics. Estimating the returns for as many options as possible, and making that information as transparent as possible, are paramount in helping prospective students make the best decision.

Suggested Citation

  • Douglas Webber, 2014. "Is the return to education the same for everybody?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-92, October.
    • Handle: RePEc:iza:izawol:journl:y:2014:n:92
    as

    Download full text from publisher

    File URL: http://wol.iza.org/articles/is-the-return-to-education-the-same-for-everybody-1.pdf
    Download Restriction: no
    File URL: http://wol.iza.org/articles/is-the-return-to-education-the-same-for-everybody
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arcidiacono, Peter & Hotz, V. Joseph & Kang, Songman, 2012. "Modeling college major choices using elicited measures of expectations and counterfactuals," Journal of Econometrics, Elsevier, vol. 166(1), pages 3-16.
    2. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    3. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
    4. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
    5. 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.
    6. Rothstein, Jesse & Rouse, Cecilia Elena, 2011. "Constrained after college: Student loans and early-career occupational choices," Journal of Public Economics, Elsevier, vol. 95(1-2), pages 149-163, February.
    7. Walker, Ian & Zhu, Yu, 2011. "Differences by degree: Evidence of the net financial rates of return to undergraduate study for England and Wales," Economics of Education Review, Elsevier, vol. 30(6), pages 1177-1186.
    8. Webber, Douglas A., 2014. "The lifetime earnings premia of different majors: Correcting for selection based on cognitive, noncognitive, and unobserved factors," Labour Economics, Elsevier, vol. 28(C), pages 14-23.
    9. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    10. Jeff Grogger & Eric Eide, 1995. "Changes in College Skills and the Rise in the College Wage Premium," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 280-310.
    11. Robst, John, 2007. "Education and job match: The relatedness of college major and work," Economics of Education Review, Elsevier, vol. 26(4), pages 397-407, August.
    12. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    13. Dominic J. Brewer & Eric R. Eide & Ronald G. Ehrenberg, 1999. "Does It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 104-123.
    14. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grinis, Inna, 2017. "The STEM requirements of "non-STEM" jobs: evidence from UK online vacancy postings and implications for skills & knowledge shortages," LSE Research Online Documents on Economics 85123, London School of Economics and Political Science, LSE Library.
    2. Webber, Douglas A., 2015. "Are College Costs Worth It? How Individual Ability, Major Choice, and Debt Affect Optimal Schooling Decisions," IZA Discussion Papers 8767, Institute of Labor Economics (IZA).
    3. Liang Yue, 2020. "Education and poverty trap: Evidence from mountian areas in Sichuan province," Journal of Advances in Humanities and Social Sciences, Dr. Yi-Hsing Hsieh, vol. 6(3), pages 105-113.
    4. Tran, Tuyen Quang & Van Vu, Huong, 2020. "Wage earning differentials by field of study: Evidence from Vietnamese university graduates," International Journal of Educational Development, Elsevier, vol. 78(C).
    5. Fedaseyeu Viktar & Strohush Vitaliy, 2018. "A Theory of Inefficient College Entry and Excessive Student Debt," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(1), pages 1-21, January.
    6. Chitralada Chaiya & Mokbul Morshed Ahmad, 2021. "Success or Failure of the Thai Higher Education Development—Critical Factors in the Policy Process of Quality Assurance," Sustainability, MDPI, vol. 13(17), pages 1-29, August.
    7. Webber, Douglas A., 2016. "Are college costs worth it? How ability, major, and debt affect the returns to schooling," Economics of Education Review, Elsevier, vol. 53(C), pages 296-310.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Webber, Douglas A., 2016. "Are college costs worth it? How ability, major, and debt affect the returns to schooling," Economics of Education Review, Elsevier, vol. 53(C), pages 296-310.
    2. Webber, Douglas A., 2015. "Are College Costs Worth It? How Individual Ability, Major Choice, and Debt Affect Optimal Schooling Decisions," IZA Discussion Papers 8767, Institute of Labor Economics (IZA).
    3. Webber, Douglas A., 2014. "The lifetime earnings premia of different majors: Correcting for selection based on cognitive, noncognitive, and unobserved factors," Labour Economics, Elsevier, vol. 28(C), pages 14-23.
    4. Zhu, Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," IZA Discussion Papers 15299, Institute of Labor Economics (IZA).
    5. Long, Mark C., 2010. "Changes in the returns to education and college quality," Economics of Education Review, Elsevier, vol. 29(3), pages 338-347, June.
    6. repec:zbw:rwirep:0065 is not listed on IDEAS
    7. Berlingieri, Francesco & Zierahn, Ulrich, 2014. "Field of study, qualification mismatch, and wages: Does sorting matter?," ZEW Discussion Papers 14-076, ZEW - Leibniz Centre for European Economic Research.
    8. Middendorf, Torge, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 65, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    10. Sergey Roshchin & Victor Rudakov, 2015. "Do Starting Salaries for Graduates Measure the Quality of Education? A Review of Studies by Russian and Foreign Authors," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 137-181.
    11. Dinda, Soumyananda, 2015. "Return on Universal Education: SSA Case Study on Bihar," MPRA Paper 64831, University Library of Munich, Germany, revised 06 Jun 2015.
    12. Torge Middendorf, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 0065, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    13. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.
    14. Emanuela di Gropello, 2006. "Meeting the Challenges of Secondary Education in Latin America and East Asia : Improving Efficiency and Resource Mobilization," World Bank Publications - Books, The World Bank Group, number 7173, December.
    15. Thomas Lemieux, 2014. "Occupations, fields of study and returns to education," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1047-1077, November.
    16. Tarun Jain & Abhiroop Mukhopadhyay & Nishith Prakash & Raghav Rakesh, 2022. "Science education and labor market outcomes in a developing economy," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 741-763, April.
    17. Eric A. Hanushek & Victor Lavy & Kohtaro Hitomi, 2008. "Do Students Care about School Quality? Determinants of Dropout Behavior in Developing Countries," Journal of Human Capital, University of Chicago Press, vol. 2(1), pages 69-105.
    18. Maria Manuel Campos & Hugo Reis, 2018. "Returns to schooling in the Portuguese economy: a reassessment," Public Sector Economics, Institute of Public Finance, vol. 42(2), pages 215-242.
    19. repec:dau:papers:123456789/4462 is not listed on IDEAS
    20. Christophe Muller & Christophe Nordman, 2004. "Which Human Capital Matters For Rich And Poor'S Wages: Evidence From Matched Worker-Firm Data From Tunisia," Working Papers. Serie AD 2004-28, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    21. Tushar Agrawal, 2011. "Returns to education in India: Some recent evidence," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-017, Indira Gandhi Institute of Development Research, Mumbai, India.
    22. Erica Blom & Brian C. Cadena & Benjamin J. Keys, 2021. "Investment over the Business Cycle: Insights from College Major Choice," Journal of Labor Economics, University of Chicago Press, vol. 39(4), pages 1043-1082.

    More about this item

    Keywords

    education; human capital; earnings; college major;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izawol:journl:y:2014:n:92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Institute of Labor Economics (IZA) (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.