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Returns to education across Europe: A comparative analysis for selected EU countries

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  • Glocker, Daniela
  • Steiner, Viktor

Abstract

Incentives to invest in higher education are affected by both the direct wage effect of human capital investments and the indirect wage effect resulting from lower unemployment risks and shorter spells in unemployment associated with higher educated. We analyse the returns to education in Austria, Germany, Italy, Sweden and the United Kingdom, countries which differ significantly regarding both their education systems and labour market structure. We estimate augmented Mincerian wage equations accounting for the effects of unemployment on individual wages using EU-SILC data. Across countries we find a high variation of the effect of education on unemployment duration. Overall, the returns to education are estimated to be the highest in the UK, and the lowest for Sweden. A wage decrease due to time spent in unemployment results in a decline in the hourly wages in Austria, Germany and Italy.

Suggested Citation

  • Glocker, Daniela & Steiner, Viktor, 2011. "Returns to education across Europe: A comparative analysis for selected EU countries," Discussion Papers 2011/15, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:201115
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    References listed on IDEAS

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    Cited by:

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    2. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    3. Tanja Fendel, 2014. "Work-related Migration and Unemployment [Beschäftigungsmotivierte Umzüge und Arbeitslosigkeit]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(3), pages 233-243, September.
    4. Schlenker, Eva, 2013. "The Labour Supply of Women in STEM," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79981, Verein für Socialpolitik / German Economic Association.
    5. Eva Schlenker, 2015. "The labour supply of women in STEM," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-17, December.

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    More about this item

    Keywords

    Returns to education; unemployment; EU-SILC;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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