Returns to education: the Greek experience, 1988–1999

Abstract

This article provides estimates of private rates of return to education in Greece derived from Mincerian-type earnings equations. The data come from the latest three household surveys of the country covering the 1988 to 1999 period. The empirical evidence suggests that: rates of return associated with female high school and university graduates exceed the respective rates for male graduates; rates of return pertaining to tertiary education graduates are increasing over time, whereas the corresponding rates for secondary education graduates follow an inverted U-shaped pattern and dropouts from any education degree end up with rates of return lower than the rates associated with the immediately preceding education level.

Acknowledgements

Thanks are due to the students Vassia Panoussi and Evangelia Vourvachaki for very competent research assistance. Financial support from the Center of Economic Research, Athens University of Economics and Business, is greatly acknowledged (grant for Project E806).

Notes

¹ The original equation specified by Mincer (1974) expresses earnings as a function of years of schooling. Psacharopoulos (1979) and Psacharopoulos and Laylard (1979) elaborate further on the original Mincerian equation. The theoretical reasoning for its semi-logarithmic specification is given in Becker (1971).

² The average earnings per educational level, regardless of gender and by gender taken separately, are presented in an Appendix, which is available upon request.

³ Magoula and Psacharopoulos (1999) provide estimates of social rates of return consistent with the 1993–1994 HS. These estimates are somewhat lower than the corresponding private rates because they include the full resource cost of education.