Fiscal and individual rates of return to university education with and without graduation
Based on a detailed model of the German tax-benefit system, this paper simulates private and fiscal returns to education for college graduates and college dropouts. Completing a five-year college degree is found to be associated with an internal rate of return (IRR) of 14.2 per cent for gross earnings, 7.4 per cent for disposable income, and 6.6 per cent for the net fiscal contribution. Individuals who drop out of college after two years, and subsequently complete a three-year period of vocational training, are found to have negative IRRs: -0.5 per cent for gross earnings and -5.9 per cent for... Show more
Authors: Pfeiffer, Friedhelm; Stichnoth, Holger
Published: Mannheim, Germany, Centre for European Economic Research, University of Mannheim, 2020
Resource type: Report, paper or authored book
Physical description: 13 p.
Access item: http://ftp.zew.de/pub/zew-docs/dp/dp20016.pdf
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