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Upgrading the Low Skilled: Is Public Provision of Formal Education a Sensible Policy?

Author

Listed:
  • Stenberg, Anders

    () (Swedish Institute for Social Research, Stockholm University)

Abstract

At various political levels, including the OECD and the EU, it is repeatedly emphasized that upgrading the low skilled is an important area for the economic and social development of modern societies. Employers are typically reluctant to train low skilled, who in their turn are unwilling to participate due to financial constraints or a perception of low quality and/or returns to training. If this is a market imperfection, a possible remedy is suggested by public provision of formal education where enrollees are eligible for financial support. However, the costs may be large and the economic returns to formal adult education (AE) for low skilled, a crucial measure to assess if expenses should be increased or decreased, is a virtually unexplored issue. This study uses Swedish register data 1990-2004 of low skilled siblings aged 24-43 in 1994 to estimate difference-indifference- in-differences models which include family fixed effects. It is found that a year of AE improves earnings by 4.4 per cent, but calculations indicate that the private returns alone only roughly cover the costs incurred by society, implying that social returns to AE are needed to justify the expenses.

Suggested Citation

  • Stenberg, Anders, 2009. "Upgrading the Low Skilled: Is Public Provision of Formal Education a Sensible Policy?," Working Paper Series 1/2009, Stockholm University, Swedish Institute for Social Research.
  • Handle: RePEc:hhs:sofiwp:2009_001
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    File URL: http://www.sofi.su.se/content/1/c6/03/09/74/WP09no1.pdf
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    Citations

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    Cited by:

    1. Hällsten, Martin, 2012. "Is it ever too late to study? The economic returns on late tertiary degrees in Sweden," Economics of Education Review, Elsevier, vol. 31(1), pages 179-194.
    2. Grönqvist, Hans & Hall, Caroline, 2013. "Education policy and early fertility: Lessons from an expansion of upper secondary schooling," Economics of Education Review, Elsevier, vol. 37(C), pages 13-33.
    3. Hall, Caroline, 2016. "Does more general education reduce the risk of future unemployment? Evidence from an expansion of vocational upper secondary education," Economics of Education Review, Elsevier, vol. 52(C), pages 251-271.
    4. Bernhard von Rosenbladt, 2010. "Adult education and training in comparative perspective – indicators of participation and country profiles," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 11(3), pages 465-502, December.
    5. Anders Stenberg & Xavier Luna & Olle Westerlund, 2012. "Can adult education delay retirement from the labour market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 677-696, January.
    6. Hall, Caroline, 2013. "Does more general education reduce the risk of future unemployment? Evidence from labor market experiences during the Great Recession," Working Paper Series, Center for Labor Studies 2013:10, Uppsala University, Department of Economics.
    7. Stenberg, Anders, 2011. "Using longitudinal data to evaluate publicly provided formal education for low skilled," Economics of Education Review, Elsevier, vol. 30(6), pages 1262-1280.
    8. Schulte-Braucks, Philipp, 2013. "Von Schweden lernen: Weiterbildung gering Qualifizierter im Rahmen der kommunalen Erwachsenenbildung (Komvux)," Discussion Papers, Research Unit: Skill Formation and Labor Markets SP I 2013-502, Social Science Research Center Berlin (WZB).

    More about this item

    Keywords

    Human capital; adult education; earnings;

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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