Returns to Education
This study gives an account of theory, models and measurements of returns to higher education, seen as the results of economically rational investment decisions. The focus is on returns in the form of increased wages and salaries. These returns vary considerably between different countries and tend to be considerably larger in the USA than in western Europe. One of the reasons for these differences in returns may be the differences in systems of funding of higher education. It is claimed that practically all studies of returns to investments in higher education disregard the benefits from reductions in consumer transaction costs and the role played by education as an important input in household production functions. Econometric studies, reported in the paper, accordingly indicate that the level of education has a considerable impact on the structure of household consumption expenditures.
|Date of creation:||28 Jan 2009|
|Date of revision:|
|Contact details of provider:|| Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden|
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- Robert H. Haveman & Barbara L. Wolfe, 1984. "Schooling and Economic Well-Being: The Role of Nonmarket Effects," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 377-407.
- Weale, Martin, 1993. "A Critical Evaluation of Rate of Return Analysis," Economic Journal, Royal Economic Society, vol. 103(418), pages 729-37, May.
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- Card, David, 2001.
"Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems,"
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- Ichino, Andrea & Winter-Ebmer, Rudolf, 1998.
"Lower and Upper Bounds of Returns to Schooling: An Exercise in IV estimation with Different Instruments,"
CEPR Discussion Papers
2007, C.E.P.R. Discussion Papers.
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"Estimates of the Economic Return to Schooling for the United Kingdom,"
American Economic Review,
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- Ashenfelter, Orley & Krueger, Alan B, 1994.
"Estimates of the Economic Returns to Schooling from a New Sample of Twins,"
American Economic Review,
American Economic Association, vol. 84(5), pages 1157-73, December.
- Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
- Isacsson, Gunnar, 1999. "Estimates of the return to schooling in Sweden from a large sample of twins," Labour Economics, Elsevier, vol. 6(4), pages 471-489, November.
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