Formal Education for Participants Above 40; Are there Really Positive Returns?
1, Olle Westerlund2, Xavier de Luna2
1Stockholm university, Sweden, 2Umeň university, Sweden
We study the effects of formal education on labour earnings during the later stages of working life. Many political bodies, including the OECD and the EU, have emphasized education of the older workforce as a tool to promote growth, prolong working lives and counteract structural unemployment. These ambitions have also been supported by results pertaining to older workers at community college in the US and formal education in Swe-den. Our results are in contrast with these findings since, from the society’s point of view, we do not find the economic benefits to cover total costs even under optimistic assump-tions. We analyse first time enrolees aged 42-55 in 1994-1995 and explore population register data 1982-2007 on e.g. annual earnings, course registrations and grades reported after course completion. We derive counterfactual earnings trajectories of the treated via matching on the propensity score, where a rich set of covariates include indicators of health and labour market marginalization. Among our robustness checks, we exploit variation between siblings in regression which include family fixed effects. We find for-mal education to enhance average earnings of older females but not of males. Consider-able public investments are made in education of older workers, but we fail to find sup-port for the policy in this study. Potential reasons behind this incongruity are that policy-makers are overly optimistic in their expectations of economic gains from education of older workers and that this field of research is a partly neglected area of the academic lit-erature.
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