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What is the private return to tertiary education?: New evidence from 21 OECD countries

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  • Romina Boarini
  • Hubert Strauss

Abstract

This article provides estimates of the private Internal Rates of Return to tertiary education for women and men in 21 OECD countries, for the years between 1991 and 2005. IRR are computed by estimating labour market premia on cross-country comparable individual-level data. Labour market premia are then adjusted for fiscal factors and costs of education. We find that returns to an additional year of tertiary education are on average above 8% and vary in a range from 4 to 15% in the countries and in the period under study. IRR are relatively homogenous across genders. Overall, a slightly increasing trend is observed over time. The article discusses various policy levers for shaping individual incentives to invest in tertiary education and provides some illustrative quantification of the impact of policy changes on those incentives.

Suggested Citation

  • Romina Boarini & Hubert Strauss, 2010. "What is the private return to tertiary education?: New evidence from 21 OECD countries," OECD Journal: Economic Studies, OECD Publishing, vol. 2010(1), pages 1-25.
    • Handle: RePEc:oec:ecokac:5kmh5x51fv5f
    DOI: 10.1787/eco_studies-2010-5kmh5x51fv5f
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    Cited by:

    1. George J Borjas & Ilpo Kauppinen & Panu Poutvaara, 2019. "Self-selection of Emigrants: Theory and Evidence on Stochastic Dominance in Observable and Unobservable Characteristics," The Economic Journal, Royal Economic Society, vol. 129(617), pages 143-171.
    2. Claudia Kettner & Katharina Köberl & Christine Mayrhuber & Sophie Karmasin & Nicole Steininger, 2012. "Mehr als Wachstum. Messung von Wohlstand und Lebensqualität in ausgewählten Ländern mit dem OECD Better Life Index auf Basis der österreichischen Präferenzen," WIFO Studies, WIFO, number 45900.
    3. De Rosa, Dalila & Semplici, Lorenzo, 2016. "Prospettive di domanda ed offerta di benessere multidimensionale," AICCON Working Papers 147-2016, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    4. Marta Santagata & Enrico Ivaldi, 2016. "Do Gender Inequalities Matter in Different Levels of Education?," Journal of Social Economics, Research Academy of Social Sciences, vol. 3(4), pages 156-169.
    5. Daway-Ducanes, Sarah Lynne S. & Pernia, Elena E. & Ramos, Vincent Jerald R., 2022. "On the “income advantage” in course choices and admissions: Evidence from the University of the Philippines," International Journal of Educational Development, Elsevier, vol. 91(C).
    6. Matthias Figo & Peter Mayerhofer, 2015. "Strukturwandel und regionales Wachstum - wissensintensive Unternehmensdienste als Wachstumsmotor?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 145, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    7. Peter Mayerhofer & Matthias Firgo, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 2: Strukturwandel und regionales Wachstum – Wissensintensive Unternehmensdienste als "Wachstumsmotor&," WIFO Studies, WIFO, number 58503.
    8. Ana-Maria Zamfir & Adriana AnaMaria Davidescu & Cristina Mocanu, 2022. "Predictors of Economic Outcomes among Romanian Youth: The Influence of Education—An Empirical Approach Based on Elastic Net Regression," IJERPH, MDPI, vol. 19(15), pages 1-15, July.
    9. Concetta Mendolicchio & Thomas Rhein, 2014. "The gender gap of returns on education across West European countries," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(3), pages 219-249, May.
    10. Jablonowski Janusz, 2021. "Internal Rate of Return on Investment in Higher Education in Europe," Wroclaw Review of Law, Administration & Economics, Sciendo, vol. 11(1), pages 1-19, December.
    11. repec:lic:licosd:31412 is not listed on IDEAS
    12. Daway-Ducanes, Sarah Lynne & Pernia, Elena & Ramos, Vincent Jerald, 2018. "On Income Advantage in University Admissions and College Major Choices: Evidence from the University of the Philippines," MPRA Paper 101108, University Library of Munich, Germany.
    13. Darjan Petek & Timotej Jagric, 2017. "Wage Inequalities: A Result of Different Levels and Fields of Tertiary Education?," Management, University of Primorska, Faculty of Management Koper, vol. 12(1), pages 59-73.
    14. Francesca Giambona & Mariano Porcu & Isabella Sulis, 2023. "Does education protect families' well-being in times of crisis? Measurement issues and empirical findings from IT-SILC data," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 32(1), pages 299-328, March.
    15. Lehouelleur, Sophie & Beblav�, Miroslav & Maselli,Ilaria, 2015. "How returns from tertiary education differ by field of study: Implications for policy-makers and students," CEPS Papers 10835, Centre for European Policy Studies.
    16. Buckner, Elizabeth & Khoramshahi, Ceara, 2021. "Does the private sector expand access to higher education? A cross-national analysis, 1999-2017," International Journal of Educational Development, Elsevier, vol. 84(C).

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