The link between unemployment and returns to education: evidence from 14 European countries

There is strong empirical evidence that unemployment rates decrease as the educational level rises. The present article attempts to take explicit account of this when estimating educational rates of return. Three models that differ with respect to their degree of simplicity and data requirements are developed herein and applied to the empirical data. The estimates for 14 European countries suggest that standard estimates that do not account for unemployment are substantially downward biased. Differences in unemployment probabilities at different educational levels, and youth unemployment, both appear to be important for a better understanding of the incentive structure behind educational decisions. Contents......Page 1 Abstracts & keywords......Page 3 The link between unemployment and returns to education......Page 7 Enrolments in higher education......Page 15 Transitions into research careers in Switzerland......Page 22 Measuring the success of transition......Page 35 Family obligations and the transition to working life......Page 44 Labour market entry and beyond......Page 53 The willingness of young Swiss to participate in continuing education and training......Page 60 UK news......Page 69 European news......Page 73 Reviews......Page 75 Analyses of economic and educational policy issues conducted over the last two decadeshave shown that most of these questions have to be approached through the individual, biographical dimension. Phenomena such as educational attainment, youth unemployment, participation in continuing education, adult education and the like can only be understood by following as closely as possible the entire development and history of a person.