Calculation of Returns on Education in Germany

Tasks

Investment in education pays off. An overwhelming body of literature dealing with the returns on education estimated that the average yield of an additional year of schooling is around 10% higher income. But what are the returns on education for people with different educational pathways? This project aims to provide extensive calculations of returns on education in Germany. To this end, the project looks at the earnings and income of persons with different educational and occupational degrees and qualifications (educational pathways). For example, one research question addresses to what extent a university degree yields higher earnings than the completion of vocational education. Additionally, heterogeneities in the returns on education will be analysed between men and women, natives and migrants, industry and craft, between different fields of study, and in different German regions. In terms of demographic change in particular, the answers to these questions have important implications for retirement, intergenerational redistribution, tax revenues, and the gap between rich and poor. Another aspect of this project is the calculation of an education-specific unemployment rate. Finally, the preceding calculations are used to simulate education-specific pension payment schemes.