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Internal Rate of Return on Investment in Higher Education in Europe

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  • Jablonowski Janusz

    (SGH Warsaw School of Economics, Poland)

Abstract

The study aims to update the well-settled issue in literature of rate of return on investment in higher education in Europe. The proposed approach slightly modifies the existing methodology based on the Mincer equation, using an updated set of data for the period 2014–2016 from the European Central Bank's ‘Household Finance and Consumption Survey’. The results obtained, ranging between 13% and 21%, are higher compared to historical records for the years 1996–2013. As for the microeconometric estimates of the Mincer-type equation, they are sound and comparable, although showing higher margins in relation to the recent figures. Thus, they may suggest an increasing trend in valuation and importance of human capital based on high school degree, especially for the Central–Eastern European Union countries, resulting probably from rapid economic and cultural convergence.

Suggested Citation

  • 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.
    • Handle: RePEc:vrs:wrolae:v:11:y:2021:i:1:p:1-19:n:4
    DOI: 10.2478/wrlae-2021-0010
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    References listed on IDEAS

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    More about this item

    Keywords

    higher education; internal rate of return; European Union; Mincer wage equation;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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