Return on investment in higher education : evidence for different subjects, degrees and gender in Germany

  • Applying an investment perspective to higher education, the paper presents detailed empirical evidence on the rate of return to higher education and its determinants. Employing a sample of 17,180 higher education graduates derived from the German Labor Force Survey 2004, we show considerable variation in the rates of return to higher education across the different subjects, with some subjects on average not representing attractive private investments from an economic point of view. We find that the decision what to study is worth several hundred thousand Euros. Applying regression analysis, we find gender- and degree-specific return advantages only in certain subjects. Comparing the return of an investment in higher education and the production cost of higher education, we show that more expensive subjects (apart from Medicine) yield a lower return. When considering the cost of study, the overall order of attractiveness of the different forms of education remains stable, but the investment in further subjects is no longer clearly attractive. Keywords: Returns to Education, Human Capital, Higher Education Earnings Capacity.

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Author:Mark WahrenburgORCiDGND, Martin Weldi
Place of publication:[Frankfurt am Main]
Document Type:Report
Year of Completion:2007
Year of first Publication:2007
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2009/09/15
Tag:Higher Education Earnings Capacity; Human Capital; Returns to Education
Issue:Version: September, 11 2007
Page Number:48
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht