Is academic-track schooling worthwhile without college? Decomposing monetary returns to education

Anna Krumme and Matthias Westphal

No 1197, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: We estimate monetary wage returns to academic-track education, Germany's elite secondary school type granting university entrance. Because academic-track attendance and subsequent university education are institutionally linked, we disentangle their contributions using a causal mediation analysis. Leveraging quasi-experimental variation from the educational expansion - independent openings of schools and universities - we identify (i) the direct effect of academic-track education holding university attendance constant and (ii) the indirect effect operating through university education. We find total monetary returns of 118%, with about 60 percentage points attributable to the indirect effect of additional university education with prior academic-track schooling, and the remaining 40 points to academic-track education alone.

Keywords: Returns to education; IV estimation; causal mediation analysis (search for similar items in EconPapers)
JEL-codes: C26 I26 J24 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:335907

DOI: 10.4419/96973382

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