Family and Gender Still Matter: The Heterogeneity of Returns To Education in Germany

34 Pages Posted: 18 Oct 2003

See all articles by Isabel Schnabel

Isabel Schnabel

University of Bonn - Institute for Financial Economics and Statistics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Reinhold Schnabel

affiliation not provided to SSRN

Date Written: September 2002

Abstract

Using information on family background, we estimate returns to education, allowing for the heterogeneity of returns. In order to control for the unobserved heterogeneity shared by family members, we construct a siblings sample and employ family fixed-effects and family correlated random-effects models. Our main result is that family background still matters despite the substantial political efforts to equalize educational opportunities in Germany. Persons with less-educated parents earn lower wages, but have higher returns to education. This supports the view that persons from less-educated backgrounds still face higher marginal costs in the educational system. The same interplay between the wage level and marginal returns is found for the effect of gender and cohort.

Keywords: Returns to education, siblings analysis, heterogeneity of returns

Suggested Citation

Schnabel, Isabel and Schnabel, Reinhold, Family and Gender Still Matter: The Heterogeneity of Returns To Education in Germany (September 2002). ZEW Discussion Paper No. 02-67. Available at SSRN: https://ssrn.com/abstract=441701 or http://dx.doi.org/10.2139/ssrn.441701

Isabel Schnabel

University of Bonn - Institute for Financial Economics and Statistics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

HOME PAGE: http://www.finance.uni-bonn.de/schnabel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+49-228-9141665 (Phone)
+49-228-9141621 (Fax)

HOME PAGE: http://www.coll.mpg.de/team/page/isabel_schnabel

Reinhold Schnabel (Contact Author)

affiliation not provided to SSRN ( email )

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