What is the Private Return to Tertiary Education? New Evidence from 21 OECD Countries

OECD Journal: Economic Studies, Vol. 2010, 2010

25 Pages Posted: 9 Jun 2011

See all articles by Romina Boarini

Romina Boarini

Organization for Economic Co-Operation and Development (OECD)

Hubert Strauss

European Investment Bank

Date Written: December 16, 2010

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.

Keywords: investment in tertiary education, returns to education, labour market premia

JEL Classification: I21, I22, I28, J24

Suggested Citation

Boarini, Romina and Strauss, Hubert, What is the Private Return to Tertiary Education? New Evidence from 21 OECD Countries (December 16, 2010). OECD Journal: Economic Studies, Vol. 2010, 2010, Available at SSRN: https://ssrn.com/abstract=1860961

Romina Boarini (Contact Author)

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

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Hubert Strauss

European Investment Bank ( email )

98-100, boulevard Konrad Adenauer
Luxembourg, L-2950
Luxembourg
+352437988673 (Phone)
+352437968895 (Fax)

HOME PAGE: http://www.eib.org/efs

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
380
Abstract Views
2,348
Rank
149,314
PlumX Metrics