Risk-Return Trade-Offs to Complete Educational Paths: Vocational, Academic and Mixed

Simone Tuor Sartore and Uschi Backes-Gellner

No 31, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: This paper investigates the rates of return and the risks of different types of educational paths after compulsory education. We distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. To study the labor market outcome we compare earnings and calculate net return rates as well as risk measures to investigate whether different educational paths are characterized by different risk-return trade-offs. We use Lazear's jack-of-all-trades theory on entrepreneurship to derive testable predictions about the labour market outcome of different combinations of education for entrepreneurs and employees. Our empirical results are based on the Swiss Labor Force Survey (SLFS) and demonstrate that mixed educational paths are well rewarded in the labor market. However, a high return is also associated with a high income variance which is driven by those who end up as entrepreneurs.

Keywords: risk-return trade-off; complete educational paths; occupational choice (search for similar items in EconPapers)
JEL-codes: I21 J24 M53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-06
New Economics Papers: this item is included in nep-edu, nep-ent, nep-hrm and nep-lab
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0031

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