The link between unemployment and returns to education: evidence from 14 European countries
Abstract
There is strong empirical evidence that unemployment rates decrease as the educational level rises. The present article attempts to take explicit account of this when estimating educational rates of return. Three models that differ with respect to their degree of simplicity and data requirements are developed herein and applied to the empirical data. The estimates for 14 European countries suggest that standard estimates that do not account for unemployment are substantially downward biased. Differences in unemployment probabilities at different educational levels, and youth unemployment, both appear to be important for a better understanding of the incentive structure behind educational decisions.
Keywords
Citation
Weber, B.A. (2002), "The link between unemployment and returns to education: evidence from 14 European countries", Education + Training, Vol. 44 No. 4/5, pp. 171-178. https://doi.org/10.1108/00400910210432059
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited