Educational Returns of a Vocational Training

In times where higher education is considered a guarantor of a secure livelihood and a fulfilling life, the question of the value of vocational training is increasingly raised. In fact, the opportunities on the job market for well-trained people in Germany are better than they have been for a long time. However, whether a degree or a vocational training is financially (more) worthwhile depends on many factors, including the field of study or the teaching profession and the resulting concrete career as well as career opportunities and the demand for graduates.

When calculating educational returns, reliable data (sources) are often missing in scientific literature as well as in the political discourse. On the one hand, the data often fails to precisely reproduce the income over the life cycle and, on the other hand, fails to capture the educational biographies in detail and reliably. For example, the educational return of a vocational training is misjudged if, instead of lifelong income, the gross salary at a certain age is used as a (key performance) indicator. Thus, it is not taken into account that the course of educational returns over time for different educational paths can vary enormously. Compared to a university degree, the earnings of a vocational training are received much earlier, which can also affect the calculation of educational returns, as income data from the (early) employment biography is not available in the mostly used survey data.

The aim of the research project is to examine the return to a vocational training. This is primarily about the individual return on education (higher income in relation to individual effort). The income and costs of the education decision are calculated or if necessary estimated and compared with a counterfactual situation. The project uses modern evaluation methods based on econometrics and National Educational Panel Study (NEPS) data linked to administrative data (NEPS-SC6-ADIAB).

Overall, there are still considerable research gaps with regard to the comparison of the returns to different educational programs. This is where the project starts and sheds light on aspects that are not yet prominent in the scientific and political discussion.

Report (in German)