DP2313 Are Austrian Returns to Education Falling Over Time?

Author(s): Josef Fersterer, Rudolf Winter-Ebmer
Publication Date: December 1999
Keyword(s): Quartile Regression, Returns to Education, Sample Selection
JEL(s): I21, J31
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2313

In this paper we make a systematic presentation of returns to education in Austria for the period 1981-1997. We use consistent cross-sections from the Mikrozensus and find falling returns over time. These falling returns are not caused by changes in the sample design and reduced willingness to reveal personal incomes in the survey. Moreover, it is shown that especially returns to university education have fallen. If the focus is not on mean returns, but if we apply quartile regression techniques, interesting patterns emerge: returns are falling the most in the lowest quartiles, but remain almost constant in the highest quartiles. The overall picture of falling returns is consistent with a rise in the supply of well-educated workers in the past two decades.