The gender gap of returns on education across West European countries

Abstract

"We study the gender specific private returns on education (RE) in Europe in a comparative perspective. We extend the model of de la Fuente (2003) by estimating the parameters by gender and introducing maternity leaves and benefits. We analyse the impact of the public policy variables evaluating the elasticities with respect to unemployment benefits, marginal and average tax rates, maternity leave and childcare benefits.<br> We estimate the Mincerian coefficients, with the Heckman selection model, for 12 West European countries using the EU-SILC data (2007). We then use them as input to calibrate the decision model.<br> The RE of females tend to be higher than those of males in all the Europeans countries but Germany, Netherlands and Sweden. The gender gap can be explained mainly by the wage premia and labour income taxes which more than compensate the negative effects on females' returns triggered by higher unemployment rates and maternity-related benefits.<br> The tax system has the most pronounced effect on RE. An increase in the marginal tax rates has a negative impact. An increase in the average tax rates can have a negative or positive impact, depending on the progressivity of the tax system. An increase in unemployment benefits and maternity or child-care benefits has a negative but fairly small impact.<br> We compute the RE using a model which allows us to take into account and assess the significance of relevant variables: wage premium, income tax, some public transfers and benefits, costs of the investments. Moreover, we estimate the wage premia using relatively recent EU-SILC data. Finally, we compare 12 EU countries spanning quite different labour market conditions and institutions." (Author's abstract, IAB-Doku) ((en))

Cite article

Mendolicchio, C. & Rhein, T. (2014): The gender gap of returns on education across West European countries. In: International journal of manpower, Vol. 35, No. 3, p. 219-249.