La rentabilidad privada y fiscal de la educación en España y sus regiones

In this paper we use the methodology developed in de la Fuente and Jimeno (2009) to construct estimates of the private returns to schooling in Spain by region and educational level and to explore the implications of such investment for public finances. Our calculations take into account the effects of schooling on wages, participation rates and employment probabilities and, through them, on contributive unemployment and pension benefits. We also allow for academic failure rates, the direct and opportunity costs of schooling and the impact of personal taxes and social security contributions. Our results show that almost all post-mandatory schooling levels offer attractive returns and generate incremental flows of net fiscal revenues along an individual’s lifecycle that allow the government to recoup an important fraction of its spending on schooling. The results are, however, much less attractive than they could be due to the existence of high rates of academic failure that raise the direct costs of schooling and reduce the flows of net private and fiscal benefits generated by an additional year spent in school.