The effect of geographical mobility, college quality and career interruptions on the returns to education

Prof. Dr. Patrick Puhani, Leibniz Universität Hannover
Ph.D. Maresa Sprietsma, ZEW (Center for European Economic Research), Mannheim

Research staff:
Margret Sterrenberg, Leibniz Universität Hannover

Project summary:
In the current information-based economies, human capital is highly relevant for individual labour market perspectives and the size of the returns to education has become a classical topic in economics of education research. According to this literature, the average return to one year of additional education is an increase in income of around 10%. However, the returns to education vary with specific circumstances and individual characteristics. Investigating which factors contribute to differences in returns to education should therefore yield interesting and relevant new insights. In this project we would like to exploit the unusual wealth of geographical and biographical information of the National Educational Panel Study (NEPS) adult surveys to estimate returns to education from several perspectives that go beyond calculating average, subject and degree-specific returns. In a first part, we investigate the relation between geographical mobility and returns to education. In particular, we investigate what share of the returns to education can be explained by higher mobility of graduates. In a second stage, we want to assess the returns to college quality in Germany for the first time by exploiting available information on the quality of the nearest university as an instrument for actual college quality. A third research objective is to measure the effect of career interruptions such as parental leave and mandatory service on returns to education.