Abstract

Publicly funded social investments in human capital in Germany were extensively carried out during the 1960s. A s a result more social groups participate in the educational system and younger Germans generally have a higher level of education than previous cohorts. However, individual outcomes of an increasing educational participation are on ongoing touchstone for investigation. Assuming a limited number of qualified positions on the labour market, the expansion of high skilled workers could lead to a growing competition for these positions. Thus, I expect a relative devaluation of the economic value of these qualifications (educational inflation). In this study, individual pension entitlements are used as an indicator for the return on human capital investments. This is suitable since pension entitlements in a contribution-based system highly depend on employment biographies. This long-term outcome with its differences among the observed birth cohorts is a result of interacting fields of the welfare state such as education, labour market, and pension. In addition to the institutional environment, life course decisions and labour market conditions influence this return on human capital investments.