The Wage Premium on Tertiary Education: New Estimates for 21 OECD Countries

OECD Journal: Economic Studies, Vol. 2009, pp. 183-210, 2009

29 Pages Posted: 9 Jun 2011

See all articles by Hubert Strauss

Hubert Strauss

European Investment Bank

Christine de la Maisonneuve

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Date Written: December 16, 2009

Abstract

This article presents cross-section estimates of gross hourly wage premia on tertiary education. The estimates are based on a unified framework for 21 OECD countries from the 1990s to the early 2000s and use international household surveys to maximize cross-country comparability. The results of the “augmented” Mincerian wage equations point to an average hourly gross wage premium on completed tertiary education of 55% in 2001 (country-gender average), translating into a premium of close to 11% per annum of tertiary education. Wage premia display little variation over time but huge cross-country variation: at 6% they are lowest in Greece and Spain (men and women) as well as in Austria and Italy (women) while reaching 14%-18% in Hungary, Portugal, and in most Anglo-Saxon countries. Given that the wage premium is the single most important driver of private returns to education, the results presented here have potentially important implications for policies that aim at increasing investment in human capital.

Keywords: wage premium, mincer equation, returns to education, educational attainment, household survey, labour market experience

JEL Classification: I21, I22, J31

Suggested Citation

Strauss, Hubert and de la Maisonneuve, Christine, The Wage Premium on Tertiary Education: New Estimates for 21 OECD Countries (December 16, 2009). OECD Journal: Economic Studies, Vol. 2009, pp. 183-210, 2009. Available at SSRN: https://ssrn.com/abstract=1860950

Hubert Strauss (Contact Author)

European Investment Bank ( email )

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Luxembourg, L-2950
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+352437988673 (Phone)
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HOME PAGE: http://www.eib.org/efs

Christine De la Maisonneuve

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

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