Causal Returns to education: A Survey on Empirical Evidence for Germany

The paper surveys the empirical evidence on causal effects of education on earnings for germany and compares alternative studies in the light of their underlying identifying assumptions. We work out the different assumptions taken by various studies, which lead to rather different interpretations of the estimated causal effects. In particular, we are interested in teh question to what extend causal returns estimations are informative regarding educational policy advice. Despite the substantial methodological differences, we conclude that the empirical findings for Germany are quite robust and do not deviate substantially from each other. From the evidence we suggest taht the selection into upper secondary schooling is suboptimal in Germany.

Flossmann, Anton and Winfried Pohlmeier (2006), Causal Returns to education: A Survey on Empirical Evidence for Germany, Journal of Economics and Statistics (Jahrbücher für Nationalökonomie und Statistik) 226 (1) , 6-23