ANNEX C. Country Tables

This annex provides country tables which detail the main results from Annex B as well as the variables that lie behind these results. As with Annex B results are given for a variety of different assumptions about age, income, student debt levels, and length of education. The results correspond to the different stylised education scenarios discussed in Chapter 4 of this study.

For each country, two tables are presented.1 The first table for each country focuses on the education scenario of a 17-year college student engaging in a four-year period of education, corresponding to an undergraduate degree. In this table, differing assumptions surrounding the financing of the student’s education are examined. In the second table for each country, it is assumed that all education spending is financed with retained earnings, but a variety of assumptions are examined regarding the students age and income, the length of the educational period, and whether the education is job-related or not.

In each table, the cost components of education are outlined, as discussed in Chapter 3 of this study and in Annex A. These costs include the direct costs of education less scholarship and grant income, as well as lost earnings. As discussed in Annex A and Chapter 3, these costs are offset by the tax system through the tax rate on foregone earnings, and the rate at which the tax system offsets direct costs. These two measures are also included. These components together comprise the total post-tax cost of education, which is what needs to be recouped in order to break even on a skills investment. Where a student borrows to finance the skills investment, the cost of this borrowing must also be recouped. A debt finance multiplier is included to account for the extent to which education finance increases or decreases the amount that needs to be recouped. This term corresponds to the F term in Annex A.

These costs must be recouped in the period after education after taxes. The tax rate on earnings after education is included in each table, as is the BEI in national currency units and as a percentage of earnings before education. The table then provides the five key measures outlined in this study, as are outlined in the cross-country tables in Annex B.

Australia

Table C.1. Comparing Financial Incentives for College Education with Different Financing Scenarios - Australia

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: AUD

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

9587

9587

9587

9587

9587

Pre-Tax Scholarship Income

2371

2371

2371

2371

2371

Income Before Education

48932

48932

48932

48932

48932

Income During Education

19847

19847

19847

19847

19847

Pre-Tax Foregone Earnings

29086

29086

29086

29086

29086

AETR Before Education (%)

16.8

16.8

16.8

16.8

16.8

AETR During Education (Exclusive of Tax Expenditures) (%)

5.6

5.6

5.6

5.6

5.6

Value of Education Tax Credits % of Direct Costs

3.3

3.3

3.3

3.3

3.3

AETR During Education (Inclusive of Tax Expenditures) (%)

4.4

4.4

4.4

4.4

4.4

METR on Foregone Earnings (%)

24.4

24.4

24.4

24.4

24.4

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

28960

28960

28960

28960

28960

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

9587

28960

9587

28960

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

815

0

3260

0

Debt Finance Multiplier

1.00

0.58

0.00

1.42

0.00

Returns to Education

Breakeven Earnings Level

58805

57438

48932

60172

48932

AETR After Education (%)

19.9

19.6

16.8

20.3

16.8

Breakeven Earnings Increment

9873

8506

0

11240

0

Breakeven Earnings Increment % of Previous Wage

20.2

17.4

0.0

23.0

0.0

METR Breakeven Earnings Increment (%)

35.5

35.5

0.0

35.5

0.0

Marginal Effective Tax Rate on Skills (%)

19.1

16.5

0.0

21.1

0.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

30.7

33.2

34.8

27.6

34.8

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

27.6

32.0

34.8

22.1

34.8

Government Costs and Returns

Government Educational Costs

20928

24937

49888

16918

49888

Marginal Returns to Costs Ratio

0.76

0.74

0.00

0.83

0.00

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.69

1.42

0.71

2.09

0.71

 http://dx.doi.org/10.1787/888933446720

Table C.2. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Australia

Single, No Children, Annual Data

Currency: AUD

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

9587

9587

9587

9587

6990

6990

9587

9587

Pre-Tax Scholarship Income

2371

2371

2371

2371

0

0

2371

0

Income Before Education

48932

69903

69903

69903

69903

69903

69903

69903

Income During Education

19847

19847

19847

19847

69728

69728

19847

17476

Pre-Tax Foregone Earnings

29086

50056

50056

50056

175

175

50056

52427

AETR Before Education (%)

16.8

22.3

22.3

22.3

22.3

22.3

22.3

22.3

AETR During Education (Exclusive of Tax Expenditures) (%)

5.6

5.6

5.6

5.6

22.3

22.3

5.6

5.0

Value of Education Tax Credits % of Direct Costs

3.3

3.3

3.3

3.3

34.2

34.2

3.3

9.2

AETR During Education (Inclusive of Tax Expenditures) (%)

4.4

4.4

4.4

4.4

18.8

18.8

4.4

0.0

METR on Foregone Earnings (%)

24.4

28.9

28.9

28.9

31.5

31.5

28.9

28.0

Total Costs of Education (Direct Costs & Foregone Earnings)

28960

42583

42583

42583

4718

4718

42583

46445

Financial Returns to Up-Skilling

Breakeven Earnings Level

58805

73414

73652

74223

70318

70382

75740

76270

AETR After Education (%)

19.9

22.7

22.7

22.8

22.3

22.3

23.0

23.0

Breakeven Earnings Increment

9873

3511

3749

4320

415

479

5837

6367

Breakeven Earnings Increment % of Previous Wage

20.2

5.0

5.4

6.2

0.6

0.7

8.4

9.1

METR Breakeven Earnings Increment (%)

35.5

31.5

31.5

31.5

31.5

31.5

31.5

31.5

Marginal Effective Tax Rate on Skills (%)

19.1

7.9

7.9

7.9

-4.0

-4.0

7.9

8.5

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

30.7

27.5

27.1

26.1

10.4

7.2

23.6

23.0

Government Costs and Returns

Government Educational Costs

20928

28276

28276

28276

13663

13663

28276

26785

Marginal Returns to Costs Ratio

0.76

0.69

0.69

0.69

0.16

0.16

0.69

0.80

Average Returns to Costs Ratio (Assumed 15% Return)

2.96

2.93

2.74

2.38

0.27

0.23

1.76

1.86

 http://dx.doi.org/10.1787/888933446736

Austria

Table C.3. Comparing Financial Incentives for College Education with Different Financing Scenarios - Austria

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

328

328

328

328

328

Pre-Tax Scholarship Income

1283

1283

1283

1283

1283

Income Before Education

27785

27785

27785

27785

27785

Income During Education

11207

11207

11207

11207

11207

Pre-Tax Foregone Earnings

16578

16578

16578

16578

16578

AETR Before Education (%)

10.2

10.2

10.2

10.2

10.2

AETR During Education (Exclusive of Tax Expenditures) (%)

-1.0

-1.0

-1.0

-1.0

-1.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

-1.0

-1.0

-1.0

-1.0

-1.0

METR on Foregone Earnings (%)

17.8

17.8

17.8

17.8

17.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

12672

12672

12672

12672

12672

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

328

12672

328

12672

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

28

1077

112

4309

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

31638

31597

30049

31679

33227

AETR After Education (%)

12.2

12.2

11.4

12.2

12.9

Breakeven Earnings Increment

3853

3812

2264

3894

5443

Breakeven Earnings Increment % of Previous Wage

13.9

13.7

8.1

14.0

19.6

METR Breakeven Earnings Increment (%)

26.3

26.3

26.3

26.3

26.3

Marginal Effective Tax Rate on Skills (%)

9.1

9.0

9.1

9.3

9.1

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.3

26.5

31.4

26.1

15.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

22.6

22.9

31.6

22.3

4.0

Government Costs and Returns

Government Educational Costs

14976

15112

20204

14841

9749

Marginal Returns to Costs Ratio

0.30

0.30

0.38

0.30

0.33

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.04

1.03

0.77

1.05

1.59

 http://dx.doi.org/10.1787/888933446746

Table C.4. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Austria

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

328

328

328

328

3926

3926

328

328

Pre-Tax Scholarship Income

1283

1283

1283

1283

0

0

1283

0

Income Before Education

27785

39693

39693

39693

39693

39693

39693

39693

Income During Education

11207

11207

11207

11207

39593

39593

11207

9923

Pre-Tax Foregone Earnings

16578

28486

28486

28486

99

99

28486

29769

AETR Before Education (%)

10.2

15.5

15.5

15.5

15.5

15.5

15.5

15.5

AETR During Education (Exclusive of Tax Expenditures) (%)

-1.0

-1.0

-1.0

-1.0

15.5

15.5

-1.0

-1.1

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

40.9

40.9

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

-1.0

-1.0

-1.0

-1.0

11.4

11.4

-1.0

-1.1

METR on Foregone Earnings (%)

17.8

22.0

22.0

22.0

31.0

31.0

22.0

21.0

Total Costs of Education (Direct Costs & Foregone Earnings)

12672

21271

21271

21271

2389

2389

21271

23838

Financial Returns to Up-Skilling

Breakeven Earnings Level

31638

41477

41610

41936

39908

39945

42867

43250

AETR After Education (%)

12.2

16.2

16.2

16.3

15.6

15.6

16.6

16.8

Breakeven Earnings Increment

3853

1785

1917

2243

215

252

3175

3558

Breakeven Earnings Increment % of Previous Wage

13.9

4.5

4.8

5.7

0.5

0.6

8.0

9.0

METR Breakeven Earnings Increment (%)

26.3

31.0

31.0

31.0

31.0

31.0

31.0

31.0

Marginal Effective Tax Rate on Skills (%)

9.1

10.7

10.7

10.7

-16.2

-16.2

10.7

12.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.3

26.4

26.1

25.3

5.4

1.0

22.9

22.9

Government Costs and Returns

Government Educational Costs

14976

18285

18285

18285

12379

12379

18285

17002

Marginal Returns to Costs Ratio

0.30

0.52

0.52

0.52

0.09

0.09

0.52

0.63

Average Returns to Costs Ratio (Assumed 15% Return)

1.94

2.33

2.17

1.85

0.16

0.14

1.31

1.41

 http://dx.doi.org/10.1787/888933446754

Belgium

Table C.5. Comparing Financial Incentives for College Education with Different Financing Scenarios - Belgium

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

630

630

630

630

630

Pre-Tax Scholarship Income

1898

1898

1898

1898

1898

Income Before Education

31245

31245

31245

31245

31245

Income During Education

13057

13057

13057

13057

13057

Pre-Tax Foregone Earnings

18188

18188

18188

18188

18188

AETR Before Education (%)

23.4

23.4

23.4

23.4

23.4

AETR During Education (Exclusive of Tax Expenditures) (%)

8.6

8.6

8.6

8.6

8.6

Value of Education Tax Credits % of Direct Costs

-88.4

-88.4

-88.4

-88.4

-88.4

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

34.1

34.1

34.1

34.1

34.1

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

9598

9598

9598

9598

9598

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

630

9598

630

9598

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

54

816

214

3263

Debt Finance Multiplier

1.00

0.60

0.60

1.40

1.40

Returns to Education

Breakeven Earnings Level

35163

35063

33644

35263

36682

AETR After Education (%)

25.5

25.5

24.8

25.6

26.1

Breakeven Earnings Increment

3918

3818

2398

4018

5437

Breakeven Earnings Increment % of Previous Wage

12.5

12.2

7.7

12.9

17.4

METR Breakeven Earnings Increment (%)

42.1

42.1

42.9

42.0

41.7

Marginal Effective Tax Rate on Skills (%)

-2.1

-3.2

-0.7

-1.1

-2.8

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

36.3

36.7

42.9

35.9

24.7

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

26.8

27.7

40.5

25.9

2.7

Government Costs and Returns

Government Educational Costs

20870

21120

24677

20620

17063

Marginal Returns to Costs Ratio

0.33

0.34

0.48

0.33

0.29

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.01

0.99

0.85

1.02

1.23

 http://dx.doi.org/10.1787/888933446768

Table C.6. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Belgium

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

630

630

630

630

4274

4274

630

630

Pre-Tax Scholarship Income

1898

1898

1898

1898

0

0

1898

0

Income Before Education

31245

44636

44636

44636

44636

44636

44636

44636

Income During Education

13057

13057

13057

13057

44524

44524

13057

11159

Pre-Tax Foregone Earnings

18188

31579

31579

31579

112

112

31579

33477

AETR Before Education (%)

23.4

28.8

28.8

28.8

28.8

28.8

28.8

28.8

AETR During Education (Exclusive of Tax Expenditures) (%)

8.6

8.6

8.6

8.6

28.8

28.8

8.6

4.8

Value of Education Tax Credits % of Direct Costs

-88.4

-45.8

-45.8

-45.8

49.1

49.1

-45.8

32.2

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

4.1

4.1

4.1

24.1

24.1

4.1

3.0

METR on Foregone Earnings (%)

34.1

37.2

37.2

37.2

45.3

45.3

37.2

36.8

Total Costs of Education (Direct Costs & Foregone Earnings)

9598

17982

17982

17982

2236

2236

17982

21576

Financial Returns to Up-Skilling

Breakeven Earnings Level

35163

46679

46872

47393

44914

44979

49344

50284

AETR After Education (%)

25.5

29.5

29.6

29.8

28.9

29.0

30.4

30.7

Breakeven Earnings Increment

3918

2043

2236

2757

278

343

4708

5648

Breakeven Earnings Increment % of Previous Wage

12.5

4.6

5.0

6.2

0.6

0.8

10.5

12.7

METR Breakeven Earnings Increment (%)

42.1

45.3

45.3

45.3

45.3

45.3

45.3

45.3

Marginal Effective Tax Rate on Skills (%)

-2.1

7.8

7.8

7.8

-7.3

-7.3

7.8

13.5

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

36.3

36.7

35.9

33.7

12.5

4.9

25.5

25.2

Government Costs and Returns

Government Educational Costs

20870

25877

25877

25877

13799

13799

25877

24181

Marginal Returns to Costs Ratio

0.33

0.58

0.58

0.58

0.13

0.13

0.58

0.74

Average Returns to Costs Ratio (Assumed 15% Return)

2.19

2.51

2.30

1.86

0.22

0.17

1.09

1.17

 http://dx.doi.org/10.1787/888933446777

Canada

Table C.7. Comparing Financial Incentives for College Education with Different Financing Scenarios - Canada

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: CAD

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

5667

5667

5667

5667

5667

Pre-Tax Scholarship Income

856

856

856

856

856

Income Before Education

31828

31828

31828

31828

31828

Income During Education

12224

12224

12224

12224

12224

Pre-Tax Foregone Earnings

19605

19605

19605

19605

19605

AETR Before Education (%)

12.4

12.4

12.4

12.4

12.4

AETR During Education (Exclusive of Tax Expenditures) (%)

-4.8

-4.8

-4.8

-4.8

-4.8

Value of Education Tax Credits % of Direct Costs

5.3

5.3

5.3

5.3

5.3

AETR During Education (Inclusive of Tax Expenditures) (%)

-6.9

-6.9

-6.9

-6.9

-6.9

METR on Foregone Earnings (%)

23.2

23.2

23.2

23.2

23.2

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

19610

19610

19610

19610

19610

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

5667

19610

5667

19610

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

482

1667

1927

6667

Debt Finance Multiplier

1.00

0.53

0.53

1.36

1.36

Returns to Education

Breakeven Earnings Level

35996

35266

33466

36553

37973

AETR After Education (%)

13.2

13.1

12.7

13.3

13.6

Breakeven Earnings Increment

4168

3438

1638

4725

6145

Breakeven Earnings Increment % of Previous Wage

13.1

10.8

5.1

14.8

19.3

METR Breakeven Earnings Increment (%)

18.7

18.7

18.7

18.7

19.4

Marginal Effective Tax Rate on Skills (%)

-31.3

-43.9

-96.3

-26.9

-25.8

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

22.9

24.9

28.8

19.8

7.6

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

21.5

23.9

28.5

17.9

3.8

Government Costs and Returns

Government Educational Costs

26408

29055

35586

24385

19426

Marginal Returns to Costs Ratio

0.17

0.18

0.24

0.17

0.18

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.98

0.89

0.73

1.06

1.33

 http://dx.doi.org/10.1787/888933446781

Table C.8. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Canada

Single, No Children, Annual Data

Currency: CAD

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

5667

5667

5667

5667

4616

4616

5667

5667

Pre-Tax Scholarship Income

856

856

856

856

0

0

856

0

Income Before Education

31828

45469

45469

45469

45469

45469

45469

45469

Income During Education

12224

12224

12224

12224

45355

45355

12224

11367

Pre-Tax Foregone Earnings

19605

33245

33245

33245

114

114

33245

34102

AETR Before Education (%)

12.4

15.8

15.8

15.8

15.3

15.3

15.8

15.8

AETR During Education (Exclusive of Tax Expenditures) (%)

-4.8

-4.8

-4.8

-4.8

15.2

15.2

-4.8

-7.4

Value of Education Tax Credits % of Direct Costs

5.3

5.3

5.3

5.3

20.1

20.1

5.3

0.1

AETR During Education (Inclusive of Tax Expenditures) (%)

-6.9

-6.9

-6.9

-6.9

13.2

13.2

-6.9

-7.4

METR on Foregone Earnings (%)

23.2

23.4

23.4

23.4

30.2

30.2

23.4

23.6

Total Costs of Education (Direct Costs & Foregone Earnings)

19610

30010

30010

30010

3770

3770

30010

31723

Financial Returns to Up-Skilling

Breakeven Earnings Level

35996

47863

48040

48480

45805

45862

49747

50002

AETR After Education (%)

13.2

16.6

16.6

16.7

15.4

15.4

17.1

17.2

Breakeven Earnings Increment

4168

2394

2571

3011

336

393

4278

4533

Breakeven Earnings Increment % of Previous Wage

13.1

5.3

5.7

6.6

0.7

0.9

9.4

10.0

METR Breakeven Earnings Increment (%)

18.7

30.2

30.2

30.2

30.2

30.2

30.5

30.5

Marginal Effective Tax Rate on Skills (%)

-31.3

8.0

8.0

8.0

12.4

12.4

8.4

9.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

22.9

25.7

25.3

24.4

17.0

14.8

21.7

21.7

Government Costs and Returns

Government Educational Costs

26408

26289

26289

26289

17216

17216

26289

25439

Marginal Returns to Costs Ratio

0.17

0.49

0.49

0.49

0.09

0.09

0.50

0.55

Average Returns to Costs Ratio (Assumed 15% Return)

1.17

1.84

1.72

1.47

0.13

0.11

1.04

1.07

 http://dx.doi.org/10.1787/888933446795

Chile

Table C.9. Comparing Financial Incentives for College Education with Different Financing Scenarios - Chile

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: CLP

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

1981921

1981921

1981921

1981921

1981921

Pre-Tax Scholarship Income

186736

186736

186736

186736

186736

Income Before Education

4062865

4062865

4062865

4062865

4062865

Income During Education

1637759

1637759

1637759

1637759

1637759

Pre-Tax Foregone Earnings

2425106

2425106

2425106

2425106

2425106

AETR Before Education (%)

0.0

0.0

0.0

0.0

0.0

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

0.0

0.0

0.0

0.0

0.0

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

4220290

4220290

4220290

4220290

4220290

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

1981921

4220290

1981921

4220290

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

168459

358716

673836

1434863

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

5008570

4825371

4618467

5191770

5398674

AETR After Education (%)

0.0

0.0

0.0

0.0

0.0

Breakeven Earnings Increment

945705

762506

555602

1128905

1335809

Breakeven Earnings Increment % of Previous Wage

23.3

18.8

13.7

27.8

32.9

METR Breakeven Earnings Increment (%)

0.0

0.0

0.0

0.0

0.0

Marginal Effective Tax Rate on Skills (%)

0.0

0.0

0.0

0.0

0.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

0.0

4.5

7.1

-6.7

-17.0

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

2.1

3.9

5.0

-0.7

-4.8

Government Costs and Returns

Government Educational Costs

888540

1706082

2629410

70998

-852330

Marginal Returns to Costs Ratio

0.00

0.00

0.00

0.00

0.00

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.83

0.43

0.28

10.44

-0.87

 http://dx.doi.org/10.1787/888933446804

Table C.10. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Chile

Single, No Children, Annual Data

Currency: CLP

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

1981921

1981921

1981921

1981921

590733

590733

1981921

1981921

Pre-Tax Scholarship Income

186736

186736

186736

186736

0

0

186736

0

Income Before Education

4062865

5804093

5804093

5804093

5804093

5804093

5804093

5804093

Income During Education

1637759

1637759

1637759

1637759

5789583

5789583

1637759

1451023

Pre-Tax Foregone Earnings

2425106

4166334

4166334

4166334

14510

14510

4166334

4353070

AETR Before Education (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Total Costs of Education (Direct Costs & Foregone Earnings)

4220290

5961518

5961518

5961518

605243

605243

5961518

6334990

Financial Returns to Up-Skilling

Breakeven Earnings Level

5008570

6149212

6174768

6237808

5841726

5848126

6417923

6456377

AETR After Education (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Breakeven Earnings Increment

945705

345119

370675

433715

37633

44033

613830

652284

Breakeven Earnings Increment % of Previous Wage

23.3

5.9

6.4

7.5

0.6

0.8

10.6

11.2

METR Breakeven Earnings Increment (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Marginal Effective Tax Rate on Skills (%)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Government Costs and Returns

Government Educational Costs

888540

888540

888540

888540

701804

701804

888540

701804

Marginal Returns to Costs Ratio

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Average Returns to Costs Ratio (Assumed 15% Return)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

 http://dx.doi.org/10.1787/888933446814

Czech Republic

Table C.11. Comparing Financial Incentives for College Education with Different Financing Scenarios - Czech Republic

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: CZK

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

9814

9814

9814

9814

9814

Pre-Tax Scholarship Income

1530

1530

1530

1530

1530

Income Before Education

206691

206691

206691

206691

206691

Income During Education

75348

75348

75348

75348

75348

Pre-Tax Foregone Earnings

131343

131343

131343

131343

131343

AETR Before Education (%)

8.8

8.8

8.8

8.8

8.8

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

13.8

13.8

13.8

13.8

13.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

121493

121493

121493

121493

121493

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

9814

121493

9814

121493

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

834

10327

3337

41307

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

240765

239629

226709

241900

254820

AETR After Education (%)

10.4

10.3

9.8

10.4

10.9

Breakeven Earnings Increment

34074

32938

20018

35209

48129

Breakeven Earnings Increment % of Previous Wage

16.5

15.9

9.7

17.0

23.3

METR Breakeven Earnings Increment (%)

20.1

20.1

20.1

20.1

20.1

Marginal Effective Tax Rate on Skills (%)

8.2

7.8

8.2

8.6

8.2

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

17.6

18.3

23.2

17.0

5.6

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

18.2

18.7

22.5

17.7

8.8

Government Costs and Returns

Government Educational Costs

122199

126248

172315

118151

72084

Marginal Returns to Costs Ratio

0.25

0.25

0.30

0.25

0.30

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.56

1.51

1.10

1.61

2.64

 http://dx.doi.org/10.1787/888933446823

Table C.12. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Czech Republic

Single, No Children, Annual Data

Currency: CZK

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

9814

9814

9814

9814

29048

29048

9814

9814

Pre-Tax Scholarship Income

1530

1530

1530

1530

0

0

1530

0

Income Before Education

206691

295273

295273

295273

295273

295273

295273

295273

Income During Education

75348

75348

75348

75348

294535

294535

75348

73818

Pre-Tax Foregone Earnings

131343

219925

219925

219925

738

738

219925

221455

AETR Before Education (%)

8.8

12.2

12.2

12.2

12.1

12.1

12.2

12.2

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

12.1

12.1

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

12.1

12.1

0.0

0.0

METR on Foregone Earnings (%)

13.8

16.3

16.3

16.3

20.1

20.1

16.3

16.2

Total Costs of Education (Direct Costs & Foregone Earnings)

121493

192270

192270

192270

29638

29638

192270

195329

Financial Returns to Up-Skilling

Breakeven Earnings Level

240765

309204

310235

312780

297579

297972

320050

320445

AETR After Education (%)

10.4

12.5

12.6

12.6

12.2

12.2

12.8

12.8

Breakeven Earnings Increment

34074

13931

14962

17507

2306

2699

24777

25172

Breakeven Earnings Increment % of Previous Wage

16.5

4.7

5.1

5.9

0.8

0.9

8.4

8.5

METR Breakeven Earnings Increment (%)

20.1

20.1

20.1

20.1

20.1

20.1

20.1

20.1

Marginal Effective Tax Rate on Skills (%)

8.2

5.2

5.2

5.2

19.7

19.7

5.2

5.4

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

17.6

16.6

16.3

15.7

19.8

19.7

13.8

13.8

Government Costs and Returns

Government Educational Costs

122199

140004

140004

140004

102684

102684

140004

138475

Marginal Returns to Costs Ratio

0.25

0.35

0.35

0.35

0.07

0.07

0.35

0.35

Average Returns to Costs Ratio (Assumed 15% Return)

1.21

1.46

1.36

1.17

0.09

0.08

0.82

0.83

 http://dx.doi.org/10.1787/888933446830

Denmark

Table C.13. Comparing Financial Incentives for College Education with Different Financing Scenarios - Denmark

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: DKK

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

8917

8917

8917

8917

8917

Pre-Tax Scholarship Income

48682

48682

48682

48682

48682

Income Before Education

270520

270520

270520

270520

270520

Income During Education

145296

145296

145296

145296

145296

Pre-Tax Foregone Earnings

125223

125223

125223

125223

125223

AETR Before Education (%)

33.7

33.7

33.7

33.7

34.0

AETR During Education (Exclusive of Tax Expenditures) (%)

27.4

27.4

27.4

27.4

27.4

Value of Education Tax Credits % of Direct Costs

-4.7

-4.7

-4.7

-4.7

-4.7

AETR During Education (Inclusive of Tax Expenditures) (%)

26.1

26.1

26.1

26.1

26.1

METR on Foregone Earnings (%)

40.9

40.9

40.9

40.9

40.9

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

32376

32376

32376

32376

32376

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

8917

32376

8917

32376

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

758

2752

3032

11008

Debt Finance Multiplier

1.00

0.49

0.48

1.32

1.31

Returns to Education

Breakeven Earnings Level

282562

280864

276282

283637

286354

AETR After Education (%)

34.0

33.9

33.8

34.0

34.1

Breakeven Earnings Increment

12042

10344

5763

13118

15834

Breakeven Earnings Increment % of Previous Wage

4.5

3.8

2.1

4.8

5.9

METR Breakeven Earnings Increment (%)

40.9

40.9

40.9

40.9

40.9

Marginal Effective Tax Rate on Skills (%)

-56.0

-73.7

-89.7

-49.5

-68.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

40.5

41.4

44.6

39.4

32.8

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

26.8

29.1

37.7

23.7

5.7

Government Costs and Returns

Government Educational Costs

256274

260839

273156

253381

246078

Marginal Returns to Costs Ratio

0.09

0.10

0.17

0.08

0.07

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.59

0.58

0.55

0.59

0.61

 http://dx.doi.org/10.1787/888933446846

Table C.14. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Denmark

Single, No Children, Annual Data

Currency: DKK

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

8917

8917

8917

8917

38285

38285

8917

8917

Pre-Tax Scholarship Income

48682

48682

48682

48682

0

0

48682

0

Income Before Education

270520

386457

386457

386457

386457

386457

386457

386457

Income During Education

145296

145296

145296

145296

385490

385490

145296

96614

Pre-Tax Foregone Earnings

125223

241160

241160

241160

966

966

241160

289842

AETR Before Education (%)

33.7

36.1

36.1

36.1

36.1

36.1

36.1

36.1

AETR During Education (Exclusive of Tax Expenditures) (%)

27.4

27.4

27.4

27.4

36.1

36.1

27.4

20.7

Value of Education Tax Credits % of Direct Costs

-4.7

-4.7

-4.7

-4.7

0.0

0.0

-4.7

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

26.1

26.1

26.1

26.1

36.1

36.1

26.1

20.7

METR on Foregone Earnings (%)

40.9

41.3

41.3

41.3

42.3

42.3

41.3

41.2

Total Costs of Education (Direct Costs & Foregone Earnings)

32376

99965

99965

99965

38842

38842

99965

179315

Financial Returns to Up-Skilling

Breakeven Earnings Level

282562

396245

396908

398500

390518

391136

402729

415645

AETR After Education (%)

34.0

36.2

36.2

36.3

36.1

36.1

36.3

36.5

Breakeven Earnings Increment

12042

9788

10451

12043

4061

4680

16272

29188

Breakeven Earnings Increment % of Previous Wage

4.5

2.5

2.7

3.1

1.1

1.2

4.2

7.6

METR Breakeven Earnings Increment (%)

40.9

42.3

42.3

42.3

42.3

42.3

42.3

42.3

Marginal Effective Tax Rate on Skills (%)

-56.0

-16.2

-16.2

-16.2

41.7

41.7

-16.2

3.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

40.5

41.8

41.3

40.1

41.7

41.6

36.9

34.7

Government Costs and Returns

Government Educational Costs

256274

304621

304621

304621

154919

154919

304621

273954

Marginal Returns to Costs Ratio

0.09

0.24

0.24

0.24

0.18

0.18

0.24

0.48

Average Returns to Costs Ratio (Assumed 15% Return)

1.76

2.21

2.07

1.80

0.18

0.15

1.33

1.48

 http://dx.doi.org/10.1787/888933446850

Estonia

Table C.15. Comparing Financial Incentives for College Education with Different Financing Scenarios - Estonia

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EEK

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

645

645

645

645

645

Pre-Tax Scholarship Income

133

133

133

133

133

Income Before Education

7258

7258

7258

7258

7258

Income During Education

2725

2725

2725

2725

2725

Pre-Tax Foregone Earnings

4533

4533

4533

4533

4533

AETR Before Education (%)

15.4

15.4

15.4

15.4

15.4

AETR During Education (Exclusive of Tax Expenditures) (%)

7.1

7.1

7.1

7.1

7.1

Value of Education Tax Credits % of Direct Costs

31.8

31.8

31.8

31.8

31.8

AETR During Education (Inclusive of Tax Expenditures) (%)

1.1

1.1

1.1

1.1

1.1

METR on Foregone Earnings (%)

20.4

20.4

20.4

20.4

20.4

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

3956

3956

3956

3956

3956

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

645

3956

645

3956

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

55

336

219

1345

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

8394

8319

7932

8470

8857

AETR After Education (%)

16.1

16.1

15.8

16.1

16.3

Breakeven Earnings Increment

1137

1062

675

1212

1599

Breakeven Earnings Increment % of Previous Wage

15.7

14.6

9.3

16.7

22.0

METR Breakeven Earnings Increment (%)

20.4

20.4

20.4

20.4

20.4

Marginal Effective Tax Rate on Skills (%)

-1.5

-3.0

-1.5

-0.1

-1.5

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

16.1

17.4

22.7

14.7

3.0

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

12.4

14.7

24.6

9.8

-12.1

Government Costs and Returns

Government Educational Costs

4534

4796

6143

4272

2926

Marginal Returns to Costs Ratio

0.22

0.23

0.28

0.22

0.25

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.61

0.58

0.45

0.65

0.95

 http://dx.doi.org/10.1787/888933446864

Table C.16. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Estonia

Single, No Children, Annual Data

Currency: EEK

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

645

645

645

645

992

992

645

645

Pre-Tax Scholarship Income

133

133

133

133

0

0

133

0

Income Before Education

7258

10368

10368

10368

10368

10368

10368

10368

Income During Education

2725

2725

2725

2725

10342

10342

2725

2592

Pre-Tax Foregone Earnings

4533

7643

7643

7643

26

26

7643

7776

AETR Before Education (%)

15.4

16.9

16.9

16.9

16.9

16.9

16.9

16.9

AETR During Education (Exclusive of Tax Expenditures) (%)

7.1

7.1

7.1

7.1

16.9

16.9

7.1

6.4

Value of Education Tax Credits % of Direct Costs

31.8

31.8

31.8

31.8

21.0

21.0

31.8

21.0

AETR During Education (Inclusive of Tax Expenditures) (%)

1.1

1.1

1.1

1.1

14.9

14.9

1.1

1.2

METR on Foregone Earnings (%)

20.4

20.4

20.4

20.4

20.4

20.4

20.4

20.4

Total Costs of Education (Direct Costs & Foregone Earnings)

3956

6432

6432

6432

804

804

6432

6698

Financial Returns to Up-Skilling

Breakeven Earnings Level

8394

10849

10888

10987

10433

10445

11298

11336

AETR After Education (%)

16.1

17.1

17.1

17.1

16.9

16.9

17.2

17.2

Breakeven Earnings Increment

1137

481

520

619

65

77

930

968

Breakeven Earnings Increment % of Previous Wage

15.7

4.6

5.0

6.0

0.6

0.7

9.0

9.3

METR Breakeven Earnings Increment (%)

20.4

20.4

20.4

20.4

20.4

20.4

20.4

20.4

Marginal Effective Tax Rate on Skills (%)

-1.5

-0.9

-0.9

-0.9

-0.7

-0.7

-0.9

-0.1

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

16.1

15.5

15.1

14.0

7.2

4.6

10.9

10.9

Government Costs and Returns

Government Educational Costs

4534

5169

5169

5169

3527

3527

5169

5036

Marginal Returns to Costs Ratio

0.22

0.32

0.32

0.32

0.06

0.06

0.32

0.34

Average Returns to Costs Ratio (Assumed 15% Return)

1.14

1.38

1.27

1.07

0.09

0.08

0.71

0.73

 http://dx.doi.org/10.1787/888933446876

Finland

Table C.17. Comparing Financial Incentives for College Education with Different Financing Scenarios1 - Finland

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

672

672

672

672

672

Pre-Tax Scholarship Income

2500

2500

2500

2500

2500

Income Before Education

28170

28170

28170

28170

28170

Income During Education

12561

12561

12561

12561

12561

Pre-Tax Foregone Earnings

15609

15609

15609

15609

15609

AETR Before Education (%)

16.3

16.3

16.3

16.3

16.3

AETR During Education (Exclusive of Tax Expenditures) (%)

5.4

5.4

5.4

5.4

5.4

Value of Education Tax Credits % of Direct Costs

-17.3

-17.3

-17.3

-17.3

-17.3

AETR During Education (Inclusive of Tax Expenditures) (%)

2.8

2.8

2.8

2.8

2.8

METR on Foregone Earnings (%)

25.2

25.2

25.2

25.2

25.2

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

9531

9531

9531

9531

9531

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

672

9531

672

9531

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

57

810

229

3241

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

31471

31375

30109

31567

32832

AETR After Education (%)

18.3

18.3

17.6

18.4

19.0

Breakeven Earnings Increment

3301

3205

1939

3397

4662

Breakeven Earnings Increment % of Previous Wage

11.7

11.4

6.9

12.1

16.6

METR Breakeven Earnings Increment (%)

35.3

35.3

35.3

35.3

35.3

Marginal Effective Tax Rate on Skills (%)

6.4

5.6

6.4

7.3

6.4

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

33.6

34.0

38.7

33.2

23.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

29.7

30.3

37.7

29.0

14.1

Government Costs and Returns

Government Educational Costs

22406

22684

26338

22129

18474

Marginal Returns to Costs Ratio

0.23

0.24

0.34

0.23

0.20

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.02

1.01

0.87

1.04

1.24

1. These results do not incorporate interest deductibility of student loans in Finland.

 http://dx.doi.org/10.1787/888933446881

Table C.18. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Finland

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

672

672

672

672

4144

4144

672

672

Pre-Tax Scholarship Income

2500

2500

2500

2500

0

0

2500

0

Income Before Education

28170

40243

40243

40243

40243

40243

40243

40243

Income During Education

12561

12561

12561

12561

40142

40142

12561

10061

Pre-Tax Foregone Earnings

15609

27682

27682

27682

101

101

27682

30182

AETR Before Education (%)

16.3

22.2

22.2

22.2

22.2

22.2

22.2

22.2

AETR During Education (Exclusive of Tax Expenditures) (%)

5.4

5.4

5.4

5.4

22.2

22.2

5.4

3.5

Value of Education Tax Credits % of Direct Costs

-17.3

-17.3

-17.3

-17.3

17.5

17.5

-17.3

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

2.8

2.8

2.8

2.8

20.4

20.4

2.8

3.5

METR on Foregone Earnings (%)

25.2

29.9

29.9

29.9

36.5

36.5

29.9

28.5

Total Costs of Education (Direct Costs & Foregone Earnings)

9531

17265

17265

17265

3483

3483

17265

22265

Financial Returns to Up-Skilling

Breakeven Earnings Level

31471

41873

41997

42302

40584

40642

43175

44037

AETR After Education (%)

18.3

22.9

22.9

23.0

22.3

22.4

23.4

23.7

Breakeven Earnings Increment

3301

1630

1754

2059

341

399

2932

3794

Breakeven Earnings Increment % of Previous Wage

11.7

4.1

4.4

5.1

0.8

1.0

7.3

9.4

METR Breakeven Earnings Increment (%)

35.3

38.7

38.8

39.0

36.5

36.5

39.4

39.6

Marginal Effective Tax Rate on Skills (%)

6.4

8.2

8.3

8.7

22.6

22.6

9.2

16.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

33.6

33.7

33.3

32.2

24.7

22.7

28.9

28.9

Government Costs and Returns

Government Educational Costs

22406

26746

26746

26746

16418

16418

26746

24246

Marginal Returns to Costs Ratio

0.23

0.41

0.41

0.41

0.12

0.12

0.42

0.60

Average Returns to Costs Ratio (Assumed 15% Return)

1.70

2.08

1.93

1.65

0.14

0.12

1.17

1.29

 http://dx.doi.org/10.1787/888933446893

Greece

Table C.19. Comparing Financial Incentives for College Education with Different Financing Scenarios - Greece

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

20

20

20

20

20

Pre-Tax Scholarship Income

6

6

6

6

6

Income Before Education

16374

16374

16374

16374

16374

Income During Education

5854

5854

5854

5854

5854

Pre-Tax Foregone Earnings

10519

10519

10519

10519

10519

AETR Before Education (%)

10.1

10.1

10.1

10.1

10.1

AETR During Education (Exclusive of Tax Expenditures) (%)

1.5

1.5

1.5

1.5

1.5

Value of Education Tax Credits % of Direct Costs

6.4

6.4

6.4

6.4

6.4

AETR During Education (Inclusive of Tax Expenditures) (%)

1.4

1.4

1.4

1.4

1.4

METR on Foregone Earnings (%)

14.9

14.9

14.9

14.9

14.9

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

8967

8967

8967

8967

8967

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

20

8967

20

8967

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

2

762

7

3049

Debt Finance Multiplier

1.00

0.60

0.60

1.40

1.40

Returns to Education

Breakeven Earnings Level

19233

19230

18099

19235

20367

AETR After Education (%)

12.4

12.4

11.6

12.4

13.2

Breakeven Earnings Increment

2859

2857

1725

2862

3993

Breakeven Earnings Increment % of Previous Wage

17.5

17.4

10.5

17.5

24.4

METR Breakeven Earnings Increment (%)

25.8

25.8

25.8

25.8

25.8

Marginal Effective Tax Rate on Skills (%)

12.9

12.9

12.9

12.9

12.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

27.5

27.6

33.2

27.5

15.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

19.9

19.9

31.8

19.8

-4.7

Government Costs and Returns

Government Educational Costs

5682

5689

9238

5674

2125

Marginal Returns to Costs Ratio

0.55

0.55

0.56

0.55

1.05

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.19

1.19

0.73

1.20

3.19

 http://dx.doi.org/10.1787/888933446900

Table C.20. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Greece

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

20

20

20

20

1573

1573

20

20

Pre-Tax Scholarship Income

6

6

6

6

0

0

6

0

Income Before Education

16374

23391

23391

23391

23391

23391

23391

23391

Income During Education

5854

5854

5854

5854

23333

23333

5854

5848

Pre-Tax Foregone Earnings

10519

17537

17537

17537

58

58

17537

17543

AETR Before Education (%)

10.1

14.8

14.8

14.8

14.8

14.8

14.8

14.8

AETR During Education (Exclusive of Tax Expenditures) (%)

1.5

1.5

1.5

1.5

14.8

14.8

1.5

1.5

Value of Education Tax Credits % of Direct Costs

6.4

6.4

6.4

6.4

2.5

2.5

6.4

1.0

AETR During Education (Inclusive of Tax Expenditures) (%)

1.4

1.4

1.4

1.4

14.6

14.6

1.4

1.4

METR on Foregone Earnings (%)

14.9

19.3

19.3

19.3

25.8

25.8

19.3

19.3

Total Costs of Education (Direct Costs & Foregone Earnings)

8967

14171

14171

14171

1577

1577

14171

14184

Financial Returns to Up-Skilling

Breakeven Earnings Level

19233

24860

24974

25279

23536

23569

26494

26497

AETR After Education (%)

12.4

16.3

16.3

16.5

14.9

14.9

17.1

17.1

Breakeven Earnings Increment

2859

1469

1583

1888

145

178

3103

3106

Breakeven Earnings Increment % of Previous Wage

17.5

6.3

6.8

8.1

0.6

0.8

13.3

13.3

METR Breakeven Earnings Increment (%)

25.8

40.0

39.1

37.1

25.8

25.8

34.6

34.6

Marginal Effective Tax Rate on Skills (%)

12.9

25.7

24.5

22.0

23.3

23.3

19.0

19.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

27.5

30.8

30.4

29.2

24.3

23.9

24.9

24.9

Government Costs and Returns

Government Educational Costs

5682

7495

7495

7495

4163

4163

7495

7488

Marginal Returns to Costs Ratio

0.55

1.26

1.21

1.11

0.13

0.13

1.00

1.00

Average Returns to Costs Ratio (Assumed 15% Return)

2.96

3.54

3.24

2.63

0.21

0.17

1.54

1.54

 http://dx.doi.org/10.1787/888933446919

Hungary

Table C.21. Comparing Financial Incentives for College Education with Different Financing Scenarios - Hungary

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: HUF

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

349237

349237

349237

349237

349237

Pre-Tax Scholarship Income

160703

160703

160703

160703

160703

Income Before Education

1851998

1851998

1851998

1851998

1851998

Income During Education

822131

822131

822131

822131

822131

Pre-Tax Foregone Earnings

1029868

1029868

1029868

1029868

1029868

AETR Before Education (%)

12.5

12.5

12.5

12.5

12.5

AETR During Education (Exclusive of Tax Expenditures) (%)

2.7

2.7

2.7

2.7

2.7

Value of Education Tax Credits % of Direct Costs

11.6

11.6

11.6

11.6

11.6

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

20.3

20.3

20.3

20.3

20.3

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

987276

987276

987276

987276

987276

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

349237

987276

349237

987276

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

29684

83916

118738

335666

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

2129652

2089137

2015120

2171304

2262827

AETR After Education (%)

13.5

13.4

13.1

13.7

14.6

Breakeven Earnings Increment

277653

237139

163121

319306

410828

Breakeven Earnings Increment % of Previous Wage

15.0

12.8

8.8

17.2

22.2

METR Breakeven Earnings Increment (%)

20.3

20.3

20.3

20.6

23.9

Marginal Effective Tax Rate on Skills (%)

1.7

-1.5

1.7

4.4

6.1

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.6

29.0

32.5

23.6

14.4

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

24.8

26.5

29.1

22.7

16.1

Government Costs and Returns

Government Educational Costs

1490241

1634302

1897493

1346181

1082990

Marginal Returns to Costs Ratio

0.17

0.18

0.23

0.17

0.20

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.69

1.54

1.33

1.87

2.33

 http://dx.doi.org/10.1787/888933446922

Table C.22. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Hungary

Single, No Children, Annual Data

Currency: HUF

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

349237

349237

349237

349237

262409

262409

349237

349237

Pre-Tax Scholarship Income

160703

160703

160703

160703

0

0

160703

0

Income Before Education

1851998

2645712

2645712

2645712

2645712

2645712

2645712

2645712

Income During Education

822131

822131

822131

822131

2639098

2639098

822131

661428

Pre-Tax Foregone Earnings

1029868

1823581

1823581

1823581

6614

6614

1823581

1984284

AETR Before Education (%)

12.5

17.6

17.6

17.6

17.6

17.6

17.6

17.6

AETR During Education (Exclusive of Tax Expenditures) (%)

2.7

2.7

2.7

2.7

17.6

17.6

2.7

0.0

Value of Education Tax Credits % of Direct Costs

11.6

11.6

11.6

11.6

0.0

0.0

11.6

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

17.6

17.6

0.0

0.0

METR on Foregone Earnings (%)

20.3

24.3

24.3

24.3

35.6

35.6

24.3

23.5

Total Costs of Education (Direct Costs & Foregone Earnings)

987276

1546501

1546501

1546501

266671

266671

1546501

1867906

Financial Returns to Up-Skilling

Breakeven Earnings Level

2129652

2784645

2794934

2820311

2671443

2675819

2892819

2944175

AETR After Education (%)

13.5

18.5

18.6

18.7

17.8

17.8

19.1

19.4

Breakeven Earnings Increment

277653

138933

149222

174599

25731

30107

247107

298463

Breakeven Earnings Increment % of Previous Wage

15.0

5.3

5.6

6.6

1.0

1.1

9.3

11.3

METR Breakeven Earnings Increment (%)

20.3

35.6

35.6

35.6

35.6

35.6

35.6

35.6

Marginal Effective Tax Rate on Skills (%)

1.7

16.2

16.2

16.2

35.0

35.0

16.2

19.5

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.6

28.8

28.5

27.5

35.0

34.9

24.9

24.9

Government Costs and Returns

Government Educational Costs

1490241

1724730

1724730

1724730

1100765

1100765

1724730

1564028

Marginal Returns to Costs Ratio

0.17

0.49

0.49

0.49

0.13

0.13

0.49

0.66

Average Returns to Costs Ratio (Assumed 15% Return)

1.34

1.80

1.67

1.43

0.14

0.12

1.01

1.11

 http://dx.doi.org/10.1787/888933446931

Iceland

Table C.23. Comparing Financial Incentives for College Education with Different Financing Scenarios - Iceland

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: ISJ

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

100495

100495

100495

100495

100495

Pre-Tax Scholarship Income

0

0

0

0

0

Income Before Education

3939600

3939600

3939600

3939600

3939600

Income During Education

1407000

1407000

1407000

1407000

1407000

Pre-Tax Foregone Earnings

2532600

2532600

2532600

2532600

2532600

AETR Before Education (%)

23.3

23.3

23.3

23.3

23.3

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

36.2

36.2

36.2

36.2

36.2

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

1715684

1715684

1715684

1715684

1715684

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

100495

1715684

100495

1715684

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

8542

145830

34167

583318

Debt Finance Multiplier

1.00

0.58

0.58

1.42

1.42

Returns to Education

Breakeven Earnings Level

4554037

4538987

4297091

4569088

4810984

AETR After Education (%)

25.4

25.3

24.6

25.4

26.1

Breakeven Earnings Increment

614437

599387

357491

629488

871384

Breakeven Earnings Increment % of Previous Wage

15.6

15.2

9.1

16.0

22.1

METR Breakeven Earnings Increment (%)

38.6

38.6

38.6

38.6

38.6

Marginal Effective Tax Rate on Skills (%)

5.8

4.9

5.8

6.6

5.8

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

32.2

32.6

39.3

31.7

18.6

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

27.4

28.1

39.9

26.6

3.5

Government Costs and Returns

Government Educational Costs

1959509

2001534

2676976

1917484

1242041

Marginal Returns to Costs Ratio

0.55

0.55

0.69

0.55

0.61

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.61

1.57

1.18

1.64

2.54

 http://dx.doi.org/10.1787/888933446943

Table C.24. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Iceland

Single, No Children, Annual Data

Currency: ISJ

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

100495

100495

100495

100495

557721

557721

100495

100495

Pre-Tax Scholarship Income

0

0

0

0

0

0

0

0

Income Before Education

3939600

5628000

5628000

5628000

5628000

5628000

5628000

5628000

Income During Education

1407000

1407000

1407000

1407000

5613930

5613930

1407000

1407000

Pre-Tax Foregone Earnings

2532600

4221000

4221000

4221000

14070

14070

4221000

4221000

AETR Before Education (%)

23.3

27.9

27.9

27.9

27.9

27.9

27.9

27.9

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

27.9

27.9

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

40.2

40.2

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

23.9

23.9

0.0

0.0

METR on Foregone Earnings (%)

36.2

37.2

37.2

37.2

38.6

38.6

37.2

37.2

Total Costs of Education (Direct Costs & Foregone Earnings)

1715684

2752334

2752334

2752334

342100

342100

2752334

2752334

Financial Returns to Up-Skilling

Breakeven Earnings Level

4554037

5881204

5898363

5939545

5661605

5666723

6048936

6048936

AETR After Education (%)

25.4

28.3

28.4

28.4

27.9

28.0

28.6

28.6

Breakeven Earnings Increment

614437

253204

270363

311545

33605

38723

420936

420936

Breakeven Earnings Increment % of Previous Wage

15.6

4.5

4.8

5.5

0.6

0.7

7.5

7.5

METR Breakeven Earnings Increment (%)

38.6

38.6

38.6

38.6

38.6

38.6

38.6

38.6

Marginal Effective Tax Rate on Skills (%)

5.8

3.6

3.6

3.6

-2.6

-2.6

3.6

3.6

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

32.2

30.7

30.2

28.9

14.0

10.2

25.5

25.5

Government Costs and Returns

Government Educational Costs

1959509

2611258

2611258

2611258

1271788

1271788

2611258

2611258

Marginal Returns to Costs Ratio

0.55

0.66

0.66

0.66

0.17

0.17

0.66

0.66

Average Returns to Costs Ratio (Assumed 15% Return)

2.82

2.95

2.76

2.39

0.28

0.25

1.77

1.77

 http://dx.doi.org/10.1787/888933446956

Ireland

Table C.25. Comparing Financial Incentives for College Education with Different Financing Scenarios - Ireland

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

2213

2213

2213

2213

2213

Pre-Tax Scholarship Income

1600

1600

1600

1600

1600

Income Before Education

22585

22585

22585

22585

22585

Income During Education

9666

9666

9666

9666

9666

Pre-Tax Foregone Earnings

12919

12919

12919

12919

12919

AETR Before Education (%)

9.4

9.4

9.4

9.4

9.4

AETR During Education (Exclusive of Tax Expenditures) (%)

2.0

2.0

2.0

2.0

2.0

Value of Education Tax Credits % of Direct Costs

5.2

5.2

5.2

5.2

5.2

AETR During Education (Inclusive of Tax Expenditures) (%)

1.7

1.7

1.7

1.7

1.7

METR on Foregone Earnings (%)

14.9

14.9

14.9

14.9

14.9

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

11577

11577

11577

11577

11577

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

2213

11577

2213

11577

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

188

984

752

3936

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

26139

25858

24673

26419

27605

AETR After Education (%)

11.8

11.6

10.9

11.9

12.6

Breakeven Earnings Increment

3554

3274

2088

3834

5020

Breakeven Earnings Increment % of Previous Wage

15.7

14.5

9.2

17.0

22.2

METR Breakeven Earnings Increment (%)

27.0

27.0

27.0

27.0

27.0

Marginal Effective Tax Rate on Skills (%)

14.7

13.6

14.7

15.6

14.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

33.7

34.9

38.8

32.3

22.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

20.5

23.8

34.1

16.7

-8.3

Government Costs and Returns

Government Educational Costs

14270

15183

19046

13357

9495

Marginal Returns to Costs Ratio

0.30

0.31

0.38

0.30

0.32

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.57

0.54

0.43

0.61

0.86

 http://dx.doi.org/10.1787/888933446961

Table C.26. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Ireland

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

2213

2213

2213

2213

3284

3284

2213

2213

Pre-Tax Scholarship Income

1600

1600

1600

1600

0

0

1600

0

Income Before Education

22585

32264

32264

32264

32264

32264

32264

32264

Income During Education

9666

9666

9666

9666

32183

32183

9666

8066

Pre-Tax Foregone Earnings

12919

22598

22598

22598

81

81

22598

24198

AETR Before Education (%)

9.4

14.7

14.7

14.7

14.7

14.7

14.7

14.7

AETR During Education (Exclusive of Tax Expenditures) (%)

2.0

2.0

2.0

2.0

14.6

14.6

2.0

2.0

Value of Education Tax Credits % of Direct Costs

5.2

5.2

5.2

5.2

7.8

7.8

5.2

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

1.7

1.7

1.7

1.7

13.8

13.8

1.7

2.0

METR on Foregone Earnings (%)

14.9

20.1

20.1

20.1

27.0

27.0

20.1

18.9

Total Costs of Education (Direct Costs & Foregone Earnings)

11577

18643

18643

18643

3086

3086

18643

21842

Financial Returns to Up-Skilling

Breakeven Earnings Level

26139

34123

34277

34656

32527

32572

35739

36373

AETR After Education (%)

11.8

16.1

16.3

16.6

14.8

14.8

17.6

18.1

Breakeven Earnings Increment

3554

1859

2013

2392

263

308

3475

4109

Breakeven Earnings Increment % of Previous Wage

15.7

5.8

6.2

7.4

0.8

1.0

10.8

12.7

METR Breakeven Earnings Increment (%)

27.0

41.9

42.4

43.3

27.0

27.0

44.8

45.3

Marginal Effective Tax Rate on Skills (%)

14.7

27.7

28.3

29.4

20.4

20.4

31.2

33.8

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

33.7

42.2

41.9

41.1

21.6

20.7

39.0

39.0

Government Costs and Returns

Government Educational Costs

14270

16883

16883

16883

10994

10994

16883

15284

Marginal Returns to Costs Ratio

0.30

0.80

0.81

0.84

0.10

0.10

0.89

1.18

Average Returns to Costs Ratio (Assumed 15% Return)

2.04

3.05

2.84

2.43

0.13

0.11

1.72

1.90

 http://dx.doi.org/10.1787/888933446974

Israel

Table C.27. Comparing Financial Incentives for College Education with Different Financing Scenarios - Israel

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: ILS

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

14096

14096

14096

14096

14096

Pre-Tax Scholarship Income

2500

2500

2500

2500

2500

Income Before Education

87784

87784

87784

87784

87784

Income During Education

33851

33851

33851

33851

33851

Pre-Tax Foregone Earnings

53933

53933

53933

53933

53933

AETR Before Education (%)

4.8

4.8

4.8

4.8

4.8

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

7.8

7.8

7.8

7.8

7.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

61316

61316

61316

61316

61316

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

14096

61316

14096

61316

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

1198

5212

4793

20847

Debt Finance Multiplier

1.00

0.58

0.58

1.42

1.42

Returns to Education

Breakeven Earnings Level

103461

101954

96905

105090

110729

AETR After Education (%)

6.2

6.1

5.7

6.4

7.3

Breakeven Earnings Increment

15677

14170

9121

17307

22946

Breakeven Earnings Increment % of Previous Wage

17.9

16.1

10.4

19.7

26.1

METR Breakeven Earnings Increment (%)

14.0

14.0

14.0

14.6

16.7

Marginal Effective Tax Rate on Skills (%)

8.1

7.5

8.1

9.3

10.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

19.6

21.4

25.2

17.5

6.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

18.1

20.7

26.1

15.0

-0.3

Government Costs and Returns

Government Educational Costs

29046

34940

54687

23151

3404

Marginal Returns to Costs Ratio

0.34

0.32

0.31

0.41

2.54

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.52

1.26

0.81

1.90

12.95

Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

 http://dx.doi.org/10.1787/888933446988

Table C.28. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Israel

Single, No Children, Annual Data

Currency: ILS

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

14096

14096

14096

14096

11902

11902

14096

14096

Pre-Tax Scholarship Income

2500

2500

2500

2500

0

0

2500

0

Income Before Education

87784

125405

125405

125405

125405

125405

125405

125405

Income During Education

33851

33851

33851

33851

125091

125091

33851

31351

Pre-Tax Foregone Earnings

53933

91554

91554

91554

314

314

91554

94054

AETR Before Education (%)

4.8

9.1

9.1

9.1

9.1

9.1

9.1

9.1

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

9.1

9.1

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

23.0

23.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

6.9

6.9

0.0

0.0

METR on Foregone Earnings (%)

7.8

12.5

12.5

12.5

23.0

23.0

12.5

12.1

Total Costs of Education (Direct Costs & Foregone Earnings)

61316

91737

91737

91737

9406

9406

91737

96736

Financial Returns to Up-Skilling

Breakeven Earnings Level

103461

132134

132590

133685

126142

126254

136592

137202

AETR After Education (%)

6.2

9.8

9.9

10.0

9.2

9.2

10.2

10.3

Breakeven Earnings Increment

15677

6729

7185

8280

737

849

11187

11797

Breakeven Earnings Increment % of Previous Wage

17.9

5.4

5.7

6.6

0.6

0.7

8.9

9.4

METR Breakeven Earnings Increment (%)

14.0

23.0

23.0

23.0

23.0

23.0

23.0

23.0

Marginal Effective Tax Rate on Skills (%)

8.1

13.4

13.4

13.4

0.0

0.0

13.4

13.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

19.6

20.4

20.3

19.8

9.5

7.4

18.7

18.7

Government Costs and Returns

Government Educational Costs

29046

36246

36246

36246

25142

25142

36246

33747

Marginal Returns to Costs Ratio

0.34

0.76

0.76

0.76

0.11

0.11

0.76

0.86

Average Returns to Costs Ratio (Assumed 15% Return)

2.30

2.82

2.64

2.29

0.19

0.17

1.69

1.82

Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

 http://dx.doi.org/10.1787/888933446993

Italy

Table C.29. Comparing Financial Incentives for College Education with Different Financing Scenarios - Italy

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

1943

1943

1943

1943

1943

Pre-Tax Scholarship Income

1415

1415

1415

1415

1415

Income Before Education

20210

20210

20210

20210

20210

Income During Education

8633

8633

8633

8633

8633

Pre-Tax Foregone Earnings

11577

11577

11577

11577

11577

AETR Before Education (%)

17.7

17.7

17.7

17.7

17.7

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

31.0

31.0

31.0

31.0

31.0

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

8518

8518

8518

8518

8518

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

1943

8518

1943

8518

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

165

724

661

2896

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

22930

22674

21808

23186

24052

AETR After Education (%)

19.2

19.1

18.6

19.3

19.7

Breakeven Earnings Increment

2720

2464

1598

2976

3842

Breakeven Earnings Increment % of Previous Wage

13.5

12.2

7.9

14.7

19.0

METR Breakeven Earnings Increment (%)

29.8

29.8

29.8

29.8

29.8

Marginal Effective Tax Rate on Skills (%)

0.3

-2.8

0.3

2.8

0.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

28.2

29.7

34.3

26.5

16.4

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

23.5

25.6

32.1

21.1

6.9

Government Costs and Returns

Government Educational Costs

10105

10906

13619

9304

6591

Marginal Returns to Costs Ratio

0.36

0.37

0.45

0.36

0.39

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.55

1.43

1.15

1.68

2.37

 http://dx.doi.org/10.1787/888933447009

Table C.30. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Italy

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

1943

1943

1943

1943

2903

2903

1943

1943

Pre-Tax Scholarship Income

1415

1415

1415

1415

0

0

1415

0

Income Before Education

20210

28872

28872

28872

28872

28872

28872

28872

Income During Education

8633

8633

8633

8633

28800

28800

8633

7218

Pre-Tax Foregone Earnings

11577

20239

20239

20239

72

72

20239

21654

AETR Before Education (%)

17.7

21.3

21.3

21.3

21.3

21.3

21.3

21.3

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

21.2

21.2

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

19.0

19.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

19.3

19.3

0.0

0.0

METR on Foregone Earnings (%)

31.0

30.3

30.3

30.3

29.9

29.9

30.3

28.4

Total Costs of Education (Direct Costs & Foregone Earnings)

8518

14626

14626

14626

2402

2402

14626

17456

Financial Returns to Up-Skilling

Breakeven Earnings Level

22930

30080

30169

30390

29085

29121

31079

31563

AETR After Education (%)

19.2

21.6

21.6

21.7

21.3

21.3

22.0

22.3

Breakeven Earnings Increment

2720

1208

1297

1518

213

249

2207

2691

Breakeven Earnings Increment % of Previous Wage

13.5

4.2

4.5

5.3

0.7

0.9

7.6

9.3

METR Breakeven Earnings Increment (%)

29.8

29.9

29.9

29.9

29.9

29.9

31.8

33.2

Marginal Effective Tax Rate on Skills (%)

0.3

0.5

0.5

0.5

13.2

13.2

3.1

9.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

28.2

30.6

30.1

29.0

17.6

15.5

25.8

25.8

Government Costs and Returns

Government Educational Costs

10105

12659

12659

12659

5676

5676

12659

11244

Marginal Returns to Costs Ratio

0.36

0.49

0.49

0.49

0.18

0.18

0.54

0.77

Average Returns to Costs Ratio (Assumed 15% Return)

2.37

2.89

2.69

2.30

0.24

0.21

1.63

1.83

 http://dx.doi.org/10.1787/888933447010

Luxembourg

Table C.31. Comparing Financial Incentives for College Education with Different Financing Scenarios - Luxembourg

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

680

680

680

680

680

Pre-Tax Scholarship Income

2050

2050

2050

2050

2050

Income Before Education

35472

35472

35472

35472

35472

Income During Education

14719

14719

14719

14719

14719

Pre-Tax Foregone Earnings

20753

20753

20753

20753

20753

AETR Before Education (%)

8.5

8.5

8.5

8.5

8.5

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

14.5

14.5

14.5

14.5

14.5

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

16377

16377

16377

16377

16377

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

680

16377

680

16377

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

58

1392

231

5568

Debt Finance Multiplier

1.00

0.60

0.60

1.40

1.40

Returns to Education

Breakeven Earnings Level

40791

40694

38648

40871

42991

AETR After Education (%)

10.9

10.9

10.0

10.9

11.9

Breakeven Earnings Increment

5319

5222

3176

5399

7519

Breakeven Earnings Increment % of Previous Wage

15.0

14.7

9.0

15.2

21.2

METR Breakeven Earnings Increment (%)

27.2

27.1

26.4

27.1

28.1

Marginal Effective Tax Rate on Skills (%)

13.8

13.4

12.9

13.9

14.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

31.0

31.2

35.8

30.7

21.0

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

30.8

31.0

35.8

30.5

20.4

Government Costs and Returns

Government Educational Costs

17640

17910

24135

17370

11145

Marginal Returns to Costs Ratio

0.35

0.34

0.40

0.34

0.41

Average Returns to Costs Ratio (Return based on Labour Market Premium)

2.18

2.15

1.60

2.22

3.46

 http://dx.doi.org/10.1787/888933447028

Table C.32. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Luxembourg

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

680

680

680

680

4989

4989

680

680

Pre-Tax Scholarship Income

2050

2050

2050

2050

0

0

2050

0

Income Before Education

35472

50674

50674

50674

50674

50674

50674

50674

Income During Education

14719

14719

14719

14719

50548

50548

14719

12669

Pre-Tax Foregone Earnings

20753

35956

35956

35956

127

127

35956

38006

AETR Before Education (%)

8.5

15.3

15.3

15.3

15.3

15.3

15.3

15.3

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

15.2

15.2

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

39.0

39.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

11.4

11.4

0.0

0.0

METR on Foregone Earnings (%)

14.5

21.6

21.6

21.6

48.0

48.0

21.6

20.4

Total Costs of Education (Direct Costs & Foregone Earnings)

16377

26830

26830

26830

3109

3109

26830

30931

Financial Returns to Up-Skilling

Breakeven Earnings Level

40791

53275

53514

54182

51008

51077

56688

57578

AETR After Education (%)

10.9

16.3

16.4

16.6

15.4

15.5

17.5

17.8

Breakeven Earnings Increment

5319

2601

2840

3508

333

403

6013

6904

Breakeven Earnings Increment % of Previous Wage

15.0

5.1

5.6

6.9

0.7

0.8

11.9

13.6

METR Breakeven Earnings Increment (%)

27.2

35.9

35.7

35.8

36.5

35.3

36.1

36.1

Marginal Effective Tax Rate on Skills (%)

13.8

17.3

17.1

17.3

-4.5

-6.6

17.6

19.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

31.0

31.3

30.8

29.6

9.1

2.8

25.1

25.1

Government Costs and Returns

Government Educational Costs

17640

22388

22388

22388

14590

14590

22388

20338

Marginal Returns to Costs Ratio

0.35

0.67

0.67

0.67

0.12

0.12

0.68

0.86

Average Returns to Costs Ratio (Assumed 15% Return)

2.28

2.62

2.40

1.94

0.18

0.15

1.14

1.25

 http://dx.doi.org/10.1787/888933447038

Mexico

Table C.33. Comparing Financial Incentives for College Education with Different Financing Scenarios - Mexico

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: MXN

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

19719

19719

19719

19719

19719

Pre-Tax Scholarship Income

2458

2458

2458

2458

2458

Income Before Education

63710

63710

63710

63710

63710

Income During Education

25211

25211

25211

25211

25211

Pre-Tax Foregone Earnings

38499

38499

38499

38499

38499

AETR Before Education (%)

0.4

0.4

0.4

0.4

0.4

AETR During Education (Exclusive of Tax Expenditures) (%)

-14.3

-14.3

-14.3

-14.3

-14.3

Value of Education Tax Credits % of Direct Costs

6.9

6.9

6.9

6.9

6.9

AETR During Education (Inclusive of Tax Expenditures) (%)

-19.0

-19.0

-19.0

-19.0

-19.0

METR on Foregone Earnings (%)

10.1

10.1

10.1

10.1

10.1

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

50680

50680

50680

50680

50680

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

19719

50680

19719

50680

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

1676

4308

6704

17231

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

77407

74809

71600

79451

82661

AETR After Education (%)

3.4

2.5

2.1

3.6

3.9

Breakeven Earnings Increment

13697

11099

7890

15741

18951

Breakeven Earnings Increment % of Previous Wage

21.5

17.4

12.4

24.7

29.7

METR Breakeven Earnings Increment (%)

17.1

14.1

15.4

16.3

15.4

Marginal Effective Tax Rate on Skills (%)

8.8

3.8

7.0

9.0

6.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

19.0

22.3

25.8

14.5

3.8

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

18.9

21.5

24.2

15.5

7.3

Government Costs and Returns

Government Educational Costs

48133

56267

69039

39999

27227

Marginal Returns to Costs Ratio

0.22

0.18

0.23

0.21

0.24

Average Returns to Costs Ratio (Return based on Labour Market Premium)

1.28

1.09

0.89

1.54

2.26

 http://dx.doi.org/10.1787/888933447044

Table C.34. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Mexico

Single, No Children, Annual Data

Currency: MXN

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

19719

19719

19719

19719

8994

8994

19719

19719

Pre-Tax Scholarship Income

2458

2458

2458

2458

0

0

2458

0

Income Before Education

63710

91014

91014

91014

91014

91014

91014

91014

Income During Education

25211

25211

25211

25211

90787

90787

25211

22754

Pre-Tax Foregone Earnings

38499

65803

65803

65803

228

228

65803

68261

AETR Before Education (%)

0.4

7.9

7.9

7.9

7.9

7.9

7.9

7.9

AETR During Education (Exclusive of Tax Expenditures) (%)

-14.3

-14.3

-14.3

-14.3

7.8

7.8

-14.3

-16.5

Value of Education Tax Credits % of Direct Costs

6.9

6.9

6.9

6.9

44.7

44.7

6.9

5.3

AETR During Education (Inclusive of Tax Expenditures) (%)

-19.0

-19.0

-19.0

-19.0

3.4

3.4

-19.0

-21.1

METR on Foregone Earnings (%)

10.1

16.3

16.3

16.3

13.5

13.5

16.3

16.0

Total Costs of Education (Direct Costs & Foregone Earnings)

50680

71122

71122

71122

5170

5170

71122

76037

Financial Returns to Up-Skilling

Breakeven Earnings Level

77407

95912

96275

97169

91397

91462

99725

100328

AETR After Education (%)

3.4

8.3

8.3

8.4

7.9

7.9

8.6

8.6

Breakeven Earnings Increment

13697

4898

5260

6155

382

447

8711

9313

Breakeven Earnings Increment % of Previous Wage

21.5

5.4

5.8

6.8

0.4

0.5

9.6

10.2

METR Breakeven Earnings Increment (%)

17.1

15.9

15.9

15.9

15.9

15.9

15.9

15.9

Marginal Effective Tax Rate on Skills (%)

8.8

1.8

1.8

1.8

-49.9

-49.9

1.8

2.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

19.0

12.5

12.3

11.6

-11.7

-16.5

9.6

9.6

Government Costs and Returns

Government Educational Costs

48133

54996

54996

54996

44647

44647

54996

52538

Marginal Returns to Costs Ratio

0.22

0.25

0.25

0.25

0.02

0.02

0.25

0.27

Average Returns to Costs Ratio (Assumed 15% Return)

1.00

0.93

0.87

0.74

0.05

0.04

0.53

0.55

 http://dx.doi.org/10.1787/888933447057

Netherlands

Table C.35. Comparing Financial Incentives for College Education with Different Financing Scenarios - Netherlands

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

2212

2212

2212

2212

2212

Pre-Tax Scholarship Income

1869

1869

1869

1869

1869

Income Before Education

32401

32401

32401

32401

32401

Income During Education

13441

13441

13441

13441

13441

Pre-Tax Foregone Earnings

18960

18960

18960

18960

18960

AETR Before Education (%)

6.1

6.1

6.1

6.1

6.1

AETR During Education (Exclusive of Tax Expenditures) (%)

0.8

0.8

0.8

0.8

0.8

Value of Education Tax Credits % of Direct Costs

14.4

14.4

14.4

14.4

14.4

AETR During Education (Inclusive of Tax Expenditures) (%)

0.5

0.5

0.5

0.5

0.5

METR on Foregone Earnings (%)

9.8

9.8

9.8

9.8

9.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

17405

17405

17405

17405

17405

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

2212

17405

2212

17405

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

188

1479

752

5917

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

39008

38667

36325

39348

41690

AETR After Education (%)

12.0

11.7

9.9

12.2

13.8

Breakeven Earnings Increment

6607

6266

3924

6948

9289

Breakeven Earnings Increment % of Previous Wage

20.4

19.3

12.1

21.4

28.7

METR Breakeven Earnings Increment (%)

41.0

41.0

41.6

40.9

40.7

Marginal Effective Tax Rate on Skills (%)

34.5

34.2

35.2

34.8

34.2

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

39.8

40.7

44.6

38.9

29.4

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

37.9

39.2

45.1

36.6

22.2

Government Costs and Returns

Government Educational Costs

14100

15012

21279

13187

6920

Marginal Returns to Costs Ratio

0.86

0.85

0.99

0.87

1.22

Average Returns to Costs Ratio (Return based on Labour Market Premium)

2.20

2.06

1.46

2.35

4.48

 http://dx.doi.org/10.1787/888933447063

Table C.36. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Netherlands

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

2212

2212

2212

2212

4590

4590

2212

2212

Pre-Tax Scholarship Income

1869

1869

1869

1869

0

0

1869

0

Income Before Education

32401

46287

46287

46287

46287

46287

46287

46287

Income During Education

13441

13441

13441

13441

46171

46171

13441

11572

Pre-Tax Foregone Earnings

18960

32846

32846

32846

116

116

32846

34715

AETR Before Education (%)

6.1

16.4

16.4

16.4

16.4

16.4

16.4

16.4

AETR During Education (Exclusive of Tax Expenditures) (%)

0.8

0.8

0.8

0.8

16.3

16.3

0.8

0.8

Value of Education Tax Credits % of Direct Costs

14.4

14.4

14.4

14.4

42.0

42.0

14.4

1.2

AETR During Education (Inclusive of Tax Expenditures) (%)

0.5

0.5

0.5

0.5

12.1

12.1

0.5

0.5

METR on Foregone Earnings (%)

9.8

22.7

22.7

22.7

40.1

40.1

22.7

21.6

Total Costs of Education (Direct Costs & Foregone Earnings)

17405

25669

25669

25669

2730

2730

25669

29407

Financial Returns to Up-Skilling

Breakeven Earnings Level

39008

48767

48951

49404

46570

46618

50697

51339

AETR After Education (%)

12.0

17.6

17.7

17.9

16.5

16.6

18.4

18.7

Breakeven Earnings Increment

6607

2480

2664

3117

283

331

4410

5052

Breakeven Earnings Increment % of Previous Wage

20.4

5.4

5.8

6.7

0.6

0.7

9.5

10.9

METR Breakeven Earnings Increment (%)

41.0

40.1

40.1

40.1

40.1

40.1

40.1

40.1

Marginal Effective Tax Rate on Skills (%)

34.5

22.5

22.5

22.5

-3.3

-3.3

22.5

24.7

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

39.8

35.8

35.5

34.6

13.5

9.0

32.2

32.2

Government Costs and Returns

Government Educational Costs

14100

19722

19722

19722

12309

12309

19722

17853

Marginal Returns to Costs Ratio

0.86

0.87

0.87

0.87

0.15

0.15

0.87

1.10

Average Returns to Costs Ratio (Assumed 15% Return)

3.40

3.29

3.06

2.62

0.24

0.21

1.85

2.04

 http://dx.doi.org/10.1787/888933447073

New Zealand

Table C.37. Comparing Financial Incentives for College Education with Different Financing Scenarios - New Zealand

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: NZD

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

5581

5581

5581

5581

5581

Pre-Tax Scholarship Income

2829

2829

2829

2829

2829

Income Before Education

34577

34577

34577

34577

34577

Income During Education

15178

15178

15178

15178

15178

Pre-Tax Foregone Earnings

19399

19399

19399

19399

19399

AETR Before Education (%)

13.2

13.2

13.2

13.2

13.2

AETR During Education (Exclusive of Tax Expenditures) (%)

11.0

11.0

11.0

11.0

11.0

Value of Education Tax Credits % of Direct Costs

13.8

13.8

13.8

13.8

13.8

AETR During Education (Inclusive of Tax Expenditures) (%)

8.5

8.5

8.5

8.5

8.5

METR on Foregone Earnings (%)

14.8

14.8

14.8

14.8

14.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

18896

18896

18896

18896

18896

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

5581

18896

5581

18896

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

474

1606

1897

6425

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

39709

39084

37592

40334

41826

AETR After Education (%)

13.7

13.7

13.5

13.8

13.9

Breakeven Earnings Increment

5133

4507

3015

5758

7250

Breakeven Earnings Increment % of Previous Wage

14.8

13.0

8.7

16.7

21.0

METR Breakeven Earnings Increment (%)

17.5

17.5

17.5

17.5

17.5

Marginal Effective Tax Rate on Skills (%)

3.3

1.3

3.3

4.8

3.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

23.2

25.1

28.6

20.8

11.6

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

12.3

17.4

26.3

6.1

-17.4

Government Costs and Returns

Government Educational Costs

16227

18529

24021

13925

8432

Marginal Returns to Costs Ratio

0.25

0.25

0.28

0.26

0.34

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.56

0.49

0.38

0.66

1.09

 http://dx.doi.org/10.1787/888933447083

Table C.38. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - New Zealand

Single, No Children, Annual Data

Currency: NZD

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

5581

5581

5581

5581

4940

4940

5581

5581

Pre-Tax Scholarship Income

2829

2829

2829

2829

0

0

2829

0

Income Before Education

34577

49395

49395

49395

49395

49395

49395

49395

Income During Education

15178

15178

15178

15178

49272

49272

15178

12349

Pre-Tax Foregone Earnings

19399

34217

34217

34217

123

123

34217

37046

AETR Before Education (%)

13.2

15.9

15.9

15.9

15.9

15.9

15.9

15.9

AETR During Education (Exclusive of Tax Expenditures) (%)

11.0

11.0

11.0

11.0

15.8

15.8

11.0

10.5

Value of Education Tax Credits % of Direct Costs

13.8

13.8

13.8

13.8

0.0

0.0

13.8

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

8.5

8.5

8.5

8.5

15.8

15.8

8.5

10.5

METR on Foregone Earnings (%)

14.8

18.0

18.0

18.0

30.0

30.0

18.0

17.7

Total Costs of Education (Direct Costs & Foregone Earnings)

18896

30427

30427

30427

5026

5026

30427

36085

Financial Returns to Up-Skilling

Breakeven Earnings Level

39709

51911

52098

52557

49841

49917

53871

54703

AETR After Education (%)

13.7

16.6

16.6

16.7

16.0

16.0

17.0

17.2

Breakeven Earnings Increment

5133

2516

2703

3162

446

522

4476

5308

Breakeven Earnings Increment % of Previous Wage

14.8

5.1

5.5

6.4

0.9

1.1

9.1

10.7

METR Breakeven Earnings Increment (%)

17.5

30.0

30.0

30.0

30.0

30.0

30.0

30.0

Marginal Effective Tax Rate on Skills (%)

3.3

15.0

15.0

15.0

29.5

29.5

15.0

17.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

23.2

26.2

25.9

25.2

29.5

29.5

23.2

23.2

Government Costs and Returns

Government Educational Costs

16227

19514

19514

19514

10180

10180

19514

16685

Marginal Returns to Costs Ratio

0.25

0.67

0.67

0.67

0.21

0.21

0.67

0.93

Average Returns to Costs Ratio (Assumed 15% Return)

1.96

2.62

2.44

2.09

0.23

0.20

1.48

1.73

 http://dx.doi.org/10.1787/888933447091

Norway

Table C.39. Comparing Financial Incentives for College Education with Different Financing Scenarios - Norway

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: NOK

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

5815

5815

5815

5815

5815

Pre-Tax Scholarship Income

29732

29732

29732

29732

29732

Income Before Education

343708

343708

343708

343708

343708

Income During Education

152485

152485

152485

152485

152485

Pre-Tax Foregone Earnings

191223

191223

191223

191223

191223

AETR Before Education (%)

18.3

18.3

18.3

18.3

18.3

AETR During Education (Exclusive of Tax Expenditures) (%)

9.9

9.9

9.9

9.9

9.9

Value of Education Tax Credits % of Direct Costs

-22.3

-22.3

-22.3

-22.3

-22.3

AETR During Education (Inclusive of Tax Expenditures) (%)

6.4

6.4

6.4

6.4

6.4

METR on Foregone Earnings (%)

25.0

25.0

25.0

25.0

25.0

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

114108

114108

114108

114108

114108

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

5815

114108

5815

114108

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

494

9699

1977

38796

Debt Finance Multiplier

1.00

0.58

0.58

1.42

1.42

Returns to Education

Breakeven Earnings Level

378556

377813

363983

379298

393129

AETR After Education (%)

19.2

19.2

18.9

19.2

19.5

Breakeven Earnings Increment

34848

34105

20275

35591

49421

Breakeven Earnings Increment % of Previous Wage

10.1

9.9

5.9

10.4

14.4

METR Breakeven Earnings Increment (%)

28.0

28.0

28.0

28.0

28.0

Marginal Effective Tax Rate on Skills (%)

-5.6

-6.3

-5.6

-4.9

-5.6

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

28.6

28.9

33.6

28.3

18.9

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

17.8

18.5

29.9

17.1

-5.4

Government Costs and Returns

Government Educational Costs

245037

247469

292755

242605

197319

Marginal Returns to Costs Ratio

0.18

0.18

0.26

0.18

0.16

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.60

0.59

0.50

0.60

0.74

 http://dx.doi.org/10.1787/888933447108

Table C.40. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Norway

Single, No Children, Annual Data

Currency: NOK

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

5815

5815

5815

5815

48732

48732

5815

5815

Pre-Tax Scholarship Income

29732

29732

29732

29732

0

0

29732

0

Income Before Education

343708

491011

491011

491011

491011

491011

491011

491011

Income During Education

152485

152485

152485

152485

489783

489783

152485

122753

Pre-Tax Foregone Earnings

191223

338526

338526

338526

1228

1228

338526

368258

AETR Before Education (%)

18.3

21.6

21.6

21.6

21.6

21.6

21.6

21.6

AETR During Education (Exclusive of Tax Expenditures) (%)

9.9

9.9

9.9

9.9

21.6

21.6

9.9

8.0

Value of Education Tax Credits % of Direct Costs

-22.3

-22.3

-22.3

-22.3

0.0

0.0

-22.3

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

6.4

6.4

6.4

6.4

21.6

21.6

6.4

8.0

METR on Foregone Earnings (%)

25.0

26.9

26.9

26.9

37.0

37.0

26.9

26.1

Total Costs of Education (Direct Costs & Foregone Earnings)

114108

218383

218383

218383

49506

49506

218383

277847

Financial Returns to Up-Skilling

Breakeven Earnings Level

378556

510591

511918

515102

495750

496472

523561

532424

AETR After Education (%)

19.2

22.2

22.2

22.3

21.7

21.8

22.5

22.8

Breakeven Earnings Increment

34848

19580

20907

24091

4739

5461

32550

41413

Breakeven Earnings Increment % of Previous Wage

10.1

4.0

4.3

4.9

1.0

1.1

6.6

8.4

METR Breakeven Earnings Increment (%)

28.0

37.0

37.0

37.0

37.0

37.0

37.0

37.0

Marginal Effective Tax Rate on Skills (%)

-5.6

9.2

9.2

9.2

36.4

36.4

9.2

15.2

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

28.6

31.5

31.1

30.2

36.4

36.4

27.8

27.8

Government Costs and Returns

Government Educational Costs

245037

288065

288065

288065

162561

162561

288065

258333

Marginal Returns to Costs Ratio

0.18

0.45

0.45

0.45

0.18

0.18

0.45

0.63

Average Returns to Costs Ratio (Assumed 15% Return)

1.68

2.23

2.09

1.81

0.19

0.16

1.34

1.50

 http://dx.doi.org/10.1787/888933447110

Poland

Table C.41. Comparing Financial Incentives for College Education with Different Financing Scenarios - Poland

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: PLN

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

3982

3982

3982

3982

3982

Pre-Tax Scholarship Income

1860

1860

1860

1860

1860

Income Before Education

27112

27112

27112

27112

27112

Income During Education

11543

11543

11543

11543

11543

Pre-Tax Foregone Earnings

15569

15569

15569

15569

15569

AETR Before Education (%)

5.9

5.9

5.9

5.9

5.9

AETR During Education (Exclusive of Tax Expenditures) (%)

1.9

1.9

1.9

1.9

1.9

Value of Education Tax Credits % of Direct Costs

-22.8

-22.8

-22.8

-22.8

-22.8

AETR During Education (Inclusive of Tax Expenditures) (%)

6.1

6.1

6.1

6.1

6.1

METR on Foregone Earnings (%)

8.8

8.8

8.8

8.8

8.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

16796

16796

16796

16796

16796

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

3982

16796

3982

16796

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

338

1428

1354

5710

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

31241

30837

29537

31644

32944

AETR After Education (%)

6.3

6.3

6.1

6.3

6.4

Breakeven Earnings Increment

4129

3725

2426

4533

5832

Breakeven Earnings Increment % of Previous Wage

15.2

13.7

8.9

16.7

21.5

METR Breakeven Earnings Increment (%)

8.8

8.8

8.8

8.8

8.8

Marginal Effective Tax Rate on Skills (%)

4.0

3.5

4.0

4.4

4.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

7.9

9.5

12.7

6.0

-3.1

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

8.1

9.4

11.8

6.6

-0.3

Government Costs and Returns

Government Educational Costs

16054

17697

22983

14412

9126

Marginal Returns to Costs Ratio

0.10

0.10

0.12

0.10

0.13

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.69

0.63

0.49

0.77

1.22

 http://dx.doi.org/10.1787/888933447127

Table C.42. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Poland

Single, No Children, Annual Data

Currency: PLN

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

3982

3982

3982

3982

3856

3856

3982

3982

Pre-Tax Scholarship Income

1860

1860

1860

1860

0

0

1860

0

Income Before Education

27112

38731

38731

38731

38731

38731

38731

38731

Income During Education

11543

11543

11543

11543

38634

38634

11543

9683

Pre-Tax Foregone Earnings

15569

27188

27188

27188

97

97

27188

29048

AETR Before Education (%)

5.9

6.8

6.8

6.8

6.8

6.8

6.8

6.8

AETR During Education (Exclusive of Tax Expenditures) (%)

1.9

1.9

1.9

1.9

6.8

6.8

1.9

0.6

Value of Education Tax Credits % of Direct Costs

-22.8

7.8

7.8

7.8

0.0

0.0

7.8

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

6.1

0.5

0.5

0.5

6.8

6.8

0.5

0.6

METR on Foregone Earnings (%)

8.8

8.8

8.8

8.8

8.8

8.8

8.8

8.8

Total Costs of Education (Direct Costs & Foregone Earnings)

16796

26740

26740

26740

3944

3944

26740

30461

Financial Returns to Up-Skilling

Breakeven Earnings Level

31241

40429

40555

40865

39000

39046

41751

42172

AETR After Education (%)

6.3

6.9

6.9

6.9

6.8

6.8

6.9

7.0

Breakeven Earnings Increment

4129

1698

1824

2134

269

315

3020

3441

Breakeven Earnings Increment % of Previous Wage

15.2

4.4

4.7

5.5

0.7

0.8

7.8

8.9

METR Breakeven Earnings Increment (%)

8.8

8.8

8.8

8.8

8.8

8.8

8.8

8.8

Marginal Effective Tax Rate on Skills (%)

4.0

0.1

0.1

0.1

8.6

8.6

0.1

1.2

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

7.9

6.9

6.8

6.4

8.7

8.7

5.4

5.4

Government Costs and Returns

Government Educational Costs

16054

17730

17730

17730

13309

13309

17730

15869

Marginal Returns to Costs Ratio

0.10

0.15

0.15

0.15

0.03

0.03

0.15

0.19

Average Returns to Costs Ratio (Assumed 15% Return)

0.53

0.67

0.62

0.53

0.04

0.04

0.38

0.42

 http://dx.doi.org/10.1787/888933447135

Portugal

Table C.43. Comparing Financial Incentives for College Education with Different Financing Scenarios - Portugal

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

1347

1347

1347

1347

1347

Pre-Tax Scholarship Income

708

708

708

708

708

Income Before Education

11346

11346

11346

11346

11346

Income During Education

4760

4760

4760

4760

4760

Pre-Tax Foregone Earnings

6586

6586

6586

6586

6586

AETR Before Education (%)

5.7

5.7

5.7

5.7

5.7

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

9.8

9.8

9.8

9.8

9.8

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

6580

6580

6580

6580

6580

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

1347

6580

1347

6580

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

114

559

458

2237

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

13369

13196

12524

13542

14214

AETR After Education (%)

8.9

8.7

7.7

9.2

10.1

Breakeven Earnings Increment

2023

1850

1179

2196

2868

Breakeven Earnings Increment % of Previous Wage

17.8

16.3

10.4

19.4

25.3

METR Breakeven Earnings Increment (%)

27.1

27.0

26.5

27.2

27.4

Marginal Effective Tax Rate on Skills (%)

20.0

19.2

19.3

20.6

20.3

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.2

27.6

31.2

24.6

15.2

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

27.2

28.3

31.1

26.0

18.7

Government Costs and Returns

Government Educational Costs

5501

6057

8215

4945

2787

Marginal Returns to Costs Ratio

0.45

0.44

0.49

0.46

0.63

Average Returns to Costs Ratio (Return based on Labour Market Premium)

2.72

2.47

1.82

3.02

5.37

 http://dx.doi.org/10.1787/888933447141

Table C.44. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Portugal

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

1347

1347

1347

1347

1759

1759

1347

1347

Pre-Tax Scholarship Income

708

708

708

708

0

0

708

0

Income Before Education

11346

16208

16208

16208

16208

16208

16208

16208

Income During Education

4760

4760

4760

4760

16167

16167

4760

4052

Pre-Tax Foregone Earnings

6586

11448

11448

11448

41

41

11448

12156

AETR Before Education (%)

5.7

12.3

12.3

12.3

12.3

12.3

12.3

12.3

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

12.2

12.2

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

2.7

2.7

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

11.9

11.9

0.0

0.0

METR on Foregone Earnings (%)

9.8

17.4

17.4

17.4

28.0

28.0

17.4

16.4

Total Costs of Education (Direct Costs & Foregone Earnings)

6580

10098

10098

10098

1740

1740

10098

11513

Financial Returns to Up-Skilling

Breakeven Earnings Level

13369

17020

17080

17228

16358

16384

17652

17854

AETR After Education (%)

8.9

13.0

13.1

13.2

12.4

12.4

13.6

13.7

Breakeven Earnings Increment

2023

812

872

1020

150

176

1444

1646

Breakeven Earnings Increment % of Previous Wage

17.8

5.0

5.4

6.3

0.9

1.1

8.9

10.2

METR Breakeven Earnings Increment (%)

27.1

28.0

28.0

28.0

28.0

28.0

28.0

28.0

Marginal Effective Tax Rate on Skills (%)

20.0

13.8

13.8

13.8

25.5

25.5

13.8

15.6

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

26.0

24.0

24.0

24.0

26.0

25.0

22.0

22.0

Government Costs and Returns

Government Educational Costs

5501

6845

6845

6845

4207

4207

6845

6137

Marginal Returns to Costs Ratio

0.45

0.57

0.57

0.57

0.16

0.16

0.57

0.73

Average Returns to Costs Ratio (Assumed 15% Return)

2.05

2.29

2.13

1.82

0.17

0.15

1.29

1.44

 http://dx.doi.org/10.1787/888933447154

Slovak Republic

Table C.45. Comparing Financial Incentives for College Education with Different Financing Scenarios - Slovak Republic

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

641

641

641

641

641

Pre-Tax Scholarship Income

640

640

640

640

640

Income Before Education

6714

6714

6714

6714

6714

Income During Education

3038

3038

3038

3038

3038

Pre-Tax Foregone Earnings

3677

3677

3677

3677

3677

AETR Before Education (%)

6.4

6.4

6.4

6.4

6.4

AETR During Education (Exclusive of Tax Expenditures) (%)

-1.7

-1.7

-1.7

-1.7

-1.7

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

-1.7

-1.7

-1.7

-1.7

-1.7

METR on Foregone Earnings (%)

13.0

13.0

13.0

13.0

13.0

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

3200

3200

3200

3200

3200

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

641

3200

641

3200

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

54

272

218

1088

Debt Finance Multiplier

1.00

0.60

0.60

1.40

1.40

Returns to Education

Breakeven Earnings Level

7600

7528

7243

7671

7957

AETR After Education (%)

7.6

7.5

7.1

7.6

8.0

Breakeven Earnings Increment

885

814

528

957

1242

Breakeven Earnings Increment % of Previous Wage

13.2

12.1

7.9

14.3

18.5

METR Breakeven Earnings Increment (%)

16.5

16.5

16.5

16.5

16.5

Marginal Effective Tax Rate on Skills (%)

4.0

2.9

4.0

4.9

4.0

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

14.4

15.6

19.0

13.0

4.6

Average Effective Tax Rate on Skills (Return based on Labour Market Premium, %)

14.4

15.6

19.1

13.0

4.5

Government Costs and Returns

Government Educational Costs

4316

4574

5606

4057

3025

Marginal Returns to Costs Ratio

0.15

0.15

0.19

0.14

0.15

Average Returns to Costs Ratio (Return based on Labour Market Premium)

0.88

0.83

0.68

0.94

1.26

 http://dx.doi.org/10.1787/888933447167

Table C.46. Comparing Financial Incentives for Differing Savings-Financed Education Scenarios - Slovak Republic

Single, No Children, Annual Data

Currency: EUR

Age

17

27

32

40

32

40

50

50

Income Before Education, %AW

70

100

100

100

100

100

100

100

Income During Education, %AW

25

25

25

25

95

95

25

25

Years of Education

4

1

1

1

0.05

0.05

1

1

Education is Job Related

No

No

No

No

Yes

Yes

No

Yes

Financial Costs of Up-Skilling

Direct Costs of Education

641

641

641

641

966

966

641

641

Pre-Tax Scholarship Income

640

640

640

640

0

0

640

0

Income Before Education

6714

9592

9592

9592

9592

9592

9592

9592

Income During Education

3038

3038

3038

3038

9568

9568

3038

2398

Pre-Tax Foregone Earnings

3677

6554

6554

6554

24

24

6554

7194

AETR Before Education (%)

6.4

9.4

9.4

9.4

9.4

9.4

9.4

9.4

AETR During Education (Exclusive of Tax Expenditures) (%)

-1.7

-1.7

-1.7

-1.7

9.4

9.4

-1.7

-2.1

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

-1.7

-1.7

-1.7

-1.7

9.4

9.4

-1.7

-2.1

METR on Foregone Earnings (%)

13.0

14.5

14.5

14.5

16.5

16.5

14.5

13.2

Total Costs of Education (Direct Costs & Foregone Earnings)

3200

5604

5604

5604

986

986

5604

6883

Financial Returns to Up-Skilling

Breakeven Earnings Level

7600

9997

10031

10121

9669

9685

10415

10603

AETR After Education (%)

7.6

9.7

9.7

9.8

9.5

9.5

10.0

10.1

Breakeven Earnings Increment

885

405

439

529

77

93

823

1011

Breakeven Earnings Increment % of Previous Wage

13.2

4.2

4.6

5.5

0.8

1.0

8.6

10.5

METR Breakeven Earnings Increment (%)

16.5

16.5

16.5

16.5

16.5

16.5

16.5

16.5

Marginal Effective Tax Rate on Skills (%)

4.0

2.3

2.3

2.3

16.1

16.1

2.3

4.9

Average Effective Tax Rate on Skills (Assumed 15% Return, %)

14.4

13.5

13.2

12.5

16.2

16.1

10.4

10.4

Government Costs and Returns

Government Educational Costs

4316

4789

4789

4789

3201

3201

4789

4150

Marginal Returns to Costs Ratio

0.15

0.23

0.23

0.23

0.06

0.06

0.23

0.33

Average Returns to Costs Ratio (Assumed 15% Return)

0.89

1.09

1.01

0.84

0.08

0.06

0.54

0.62

 http://dx.doi.org/10.1787/888933447177

Slovenia

Table C.47. Comparing Financial Incentives for College Education with Different Financing Scenarios - Slovenia

Single, No Children, 17 Year-Old, Four Years of Education, 70% of the Average Wage

Currency: EUR

Scenario

No Borrowing

Direct Costs Borrowed, Low Interest Rate

All Costs Borrowed, Low Interest Rate

Direct Costs Borrowed, High Interest Rate

All Costs Borrowed, High Interest Rate

Non-Financing Education Costs

Direct Costs of Education

646

646

646

646

646

Pre-Tax Scholarship Income

1589

1589

1589

1589

1589

Income Before Education

12161

12161

12161

12161

12161

Income During Education

5932

5932

5932

5932

5932

Pre-Tax Foregone Earnings

6229

6229

6229

6229

6229

AETR Before Education (%)

8.3

8.3

8.3

8.3

8.3

AETR During Education (Exclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

Value of Education Tax Credits % of Direct Costs

0.0

0.0

0.0

0.0

0.0

AETR During Education (Inclusive of Tax Expenditures) (%)

0.0

0.0

0.0

0.0

0.0

METR on Foregone Earnings (%)

16.3

16.3

16.3

16.3

16.3

Total Annual Non-Financing Costs of Education (Direct Costs & Foregone Earnings)

4273

4273

4273

4273

4273

Education Financing Costs

Fraction of Costs Borrowed

None

Direct Costs

All Costs

Direct Costs

All Costs

Total Amount Borrowed

0

646

4273

646

4273

Interest Rate (%)

NA

0.0

0.0

6.0

6.0

Annual Repayments

0

55

363

220

1453

Debt Finance Multiplier

1.00

0.59

0.59

1.41

1.41

Returns to Education

Breakeven Earnings Level

13277

13209

12823

13346

13731

AETR After Education (%)

8.7

8.7

8.5

8.7

8.8

Breakeven Earnings Increment

1116

1048

663

1185

1570

Breakeven Earnings Increment % of Previous Wage

9.2

8.6

5.4

9.7

12.9

METR Breakeven Earnings Increment (%)

12.5

12.5

12.5

12.5

12.5

Marginal Effective Tax Rate on Skills (%)