Education at a Glance 2016
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Education at a Glance 2016

OECD Indicators

Education at a Glance is the authoritative source for information on the state of education around the world. It provides key information on the output of educational institutions; the impact of learning across countries; the financial and human resources invested in education; access, participation and progression in education; and the learning environment and organisation of schools.

The 2016 edition introduces a new indicator on the completion rate of tertiary students and another one on school leaders. It provides more trend data and analysis on diverse topics, such as: teachers’ salaries; graduation rates; expenditure on education; enrolment rates; young adults who are neither employed nor in education or training; class size; and teaching hours. The publication examines gender imbalance in education and the profile of students who attend, and graduate from, vocational education.

The report covers all 35 OECD countries and a number of partner countries (Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Lithuania, the Russian Federation, Saudi Arabia and South Africa).

This edition includes more than 125 figures and 145 tables. The Excel™ spreadsheets used to create them are available via the StatLinks provided throughout the publication. More data is available in the OECD Education Statistics database.

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Indicator A7 What are the Financial Incentives to Invest in Education? You do not have access to this content

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Indicator A7 measures returns on investment in education. It examines private and public costs and benefits for men and women attaining upper secondary or post-secondary non-tertiary education and tertiary education.

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Chapter Highlights

  • On average, across OECD countries, the private net financial returns for a woman attaining tertiary education are about two-thirds of the private net financial returns for a man with a similar level of education.

  • Higher levels of educational attainment yield higher financial returns. Financial net returns are highest for tertiary education, but individuals and society also greatly benefit from upper secondary or post-secondary non-tertiary education, compared to lower levels of educational attainment.

  • The public benefits of education outweigh the costs, through greater tax revenues and social contributions from a larger proportion of tertiary-educated adults.

Figure A7.1. Private net financial returns on attaining tertiary education, by gender (2012)
As compared with adults attaining upper secondary or post-secondary non-tertiary education, in equivalent USD converted using PPPs for GDP

1. Year of reference differs from 2012, please see Tables A7.3a and A7.3b for further details.

Countries are ranked in ascending order of private net financial returns for a man.

Source: OECD. Tables A7.3a and A7.3b. See Annex 3 for notes (www.oecd.org/education/education-at-a-glance-19991487.htm).

ContextExpand / Collapse

Investing time and money in education is an investment in human capital. For adults, the labour market outcomes of higher educational attainment outweigh the initial cost of pursuing education. Better chances of employment (see Indicator A5) and higher earnings (see Indicator A6) are strong incentives for adults to invest in education and postpone labour market activities. Although women currently have higher levels of education than men (see Indicator A1), men reap more benefits from their investment, as they have better employment and earning outcomes of education.

Countries, in turn, benefit from having individuals with higher education, through reduced public expenditure on social welfare programmes and higher revenues earned through taxes paid once individuals enter the labour market. As both individuals and governments benefit from higher levels of educational attainment, it is important to consider the financial returns to education together with other indicators, such as access to higher education (see Indicator A3).

In countries with lengthy tertiary programmes and relatively high incomes after upper secondary or post-secondary non-tertiary education, the effect of foregone earnings is considerable. The magnitude of this effect also depends on expected wage levels and the probability of finding a job with or without tertiary qualifications. When the labour market for young adults worsens, the effect of foregone earnings is reduced, making tertiary education a less costly investment.

It should be kept in mind that factors not reflected in this indicator affect the returns to education. The financial returns may be affected by the field of study and by country-specific economic situations, labour market contexts and institutional settings, as well as by social and cultural factors which are not accounted for. Furthermore, returns to education are not limited to financial returns but also include other economic outcomes, such as increased productivity that boosts economic growth, and social outcomes, such as better health and well-being and higher social participation (see Indicator A8).

Other findingsExpand / Collapse

  • On average, across OECD countries, the private net financial returns for a man attaining tertiary education are about USD 258 400 over his career, compared to a man with upper secondary or post-secondary non-tertiary education. The equivalent for a woman is only about USD 167 600.

  • The gender gap in private net financial returns to tertiary education is the largest in Japan, where the returns for a man are seven times greater than the returns for a woman.

  • Across OECD countries, Chile, Luxembourg and the United States have the largest private net financial returns for a tertiary-educated adult (over USD 450 000 for a man and over USD 280 000 for a woman).

NoteExpand / Collapse

This indicator provides information on the incentives to invest in further education by considering its costs and benefits, including net financial returns and internal rate of return. It examines the choice between pursuing higher levels of education and entering the labour market, focusing on two scenarios:

  • investing in tertiary education, compared to entering the labour market with an upper secondary or post-secondary non-tertiary degree

  • investing in upper secondary or post-secondary non-tertiary education, compared to entering the labour market without an upper secondary or post-secondary non-tertiary degree.

Two types of investors are considered:

  • the individual (referred to here as private) who chooses to pursue higher levels of education, based on the additional net earnings and costs he or she can expect

  • the government (referred to here as public) that decides to invest in education, based on the additional revenue it would receive (tax revenue) and the costs involved.

Values are presented separately for men and women to account for gender-specific differences in earnings and unemployment rates.

More details on measuring net financial returns are provided in the Methodology section at the end of this indicator. Please note that due to continuous improvement of this indicator’s methodology, values presented in this edition of Education at a Glance might not be comparable with values in previous editions. For further details, please refer to the Methodology section of this indicator and Annex 3.

 
 
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