Rates of Return to Education: The View of Students in Switzerland

Stefan Wolter and André Zbinden
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André Zbinden: affiliation not available

No 371, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in 10 European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. While most of the deviation of individual expectations from actual wages can not be explained, we find that rates of return to education that are calculated on the base of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self-perception of their academic performance and their subjective job perspectives. The high degree of unexplained heterogeneity in individual expectations and the differences between groups of students show the necessity to analyse the question further with bigger and more representative samples.

Keywords: wages; Rates of return to education; expectations (search for similar items in EconPapers)
JEL-codes: C81 I20 J24 J31 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2001-09
New Economics Papers: this item is included in nep-eec and nep-lab
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Citations: View citations in EconPapers (2)

Published - published in: International Journal of Manpower, 2002, 23 (5), 458-470

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