Rates of Return to Education: The View of Students in Switzerland

16 Pages Posted: 9 Oct 2001

See all articles by Stefan C. Wolter

Stefan C. Wolter

Swiss Coordination Centre for Research in Education (SKBF); University of Bern - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Andre Zbinden

University of Bern - Institute of Economics

Date Written: September 2001

Abstract

Wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in 10 European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. While most of the deviation of individual expectations from actual wages can not be explained, we find that rates of return to education that are calculated on the base of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self-perception of their academic performance and their subjective job perspectives. The high degree of unexplained heterogeneity in individual expectations and the differences between groups of students show the necessity to analyze the question further with bigger and more representative samples.

Keywords: Rates of Return to Education, Wages, Expectations

JEL Classification: C81, I20, J24, J31

Suggested Citation

Wolter, Stefan C. and Zbinden, Andre, Rates of Return to Education: The View of Students in Switzerland (September 2001). IZA Discussion Paper No. 371. Available at SSRN: https://ssrn.com/abstract=286600

Stefan C. Wolter (Contact Author)

Swiss Coordination Centre for Research in Education (SKBF) ( email )

CH - 5000 Aarau
Switzerland
+41 62 835 23 90 (Phone)
+41 62 835 23 99 (Fax)

HOME PAGE: http://www.skbf-csre.ch

University of Bern - Department of Economics ( email )

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland
+41 31 631 40 95 (Phone)
+41 31 631 39 92 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Andre Zbinden

University of Bern - Institute of Economics

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland

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