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Earnings Returns to Different Educational Careers: The Relative Importance of Type vs. Field of Education


  • Curdin Pfister

    () (Department of Business Administration, University of Zurich)

  • Simone Tuor Sartore

    () (Department of Business Administration, University of Zurich)

  • Uschi Backes-Gellner

    () (Department of Business Administration, University of Zurich)


The two choices that students in many Western European countries must make during their educational career are the type of education (vocational vs. academic) and the subject area (the specific field of education). However, most studies on the effect of education on earnings consider only one of these two factors. In addition, most of these studies focus exclusively on average returns and neglect the variance of the returns, thus overlooking important aspects of the nature of the returns to education such as the risk in human capital investments. In this study, we consider both factors type of education and subject area at the same time to estimate earning returns and to examine how much these two factors contribute to the variance of earnings in later careers. We use the Swiss Adult Education Survey from 2011 and construct a sample of individuals with tertiary level educational degree, estimating earnings regressions and decomposing the variance in earnings for type of education and subject area. Decomposition results show that field of education, relative to subject area, explains double the variation in earnings. Given our findings that earnings relate more to subject area than to type of education, the question of which type of education—academic or vocational—an individual chooses is less relevant than the question of which field he or she chooses to specialize in.

Suggested Citation

  • Curdin Pfister & Simone Tuor Sartore & Uschi Backes-Gellner, 2015. "Earnings Returns to Different Educational Careers: The Relative Importance of Type vs. Field of Education," Economics of Education Working Paper Series 0107, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0107

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    References listed on IDEAS

    1. Michael Beckmann, 2002. "Firm‐sponsored Apprenticeship Training in Germany: Empirical Evidence from Establishment Data," LABOUR, CEIS, vol. 16(2), pages 287-310, June.
    2. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    3. Fischer, Gabriele & Janik, Florian & Müller, Dana & Schmucker, Alexandra, 2008. "Das IAB-Betriebspanel - von der Stichprobe über die Erhebung bis zur Hochrechnung," FDZ Methodenreport 200801_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
    5. Spengler, Anja, 2007. "Das Betriebs-Historik-Panel 1975-2005 : Handbuch-Version 2.0.0," FDZ Datenreport. Documentation on Labour Market Data 200704_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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