An analysis of the returns of high education in Spain

Human Capital theory considers education as an investment. Thus, those individuals which invest in education, will have a higher productivity that somehow will imply higher job incomes. For the Spanish case, from the early 90s to the end of the twentieth century, there exist several works which analyse the returns of high education. However, during the last decade, there are practically any works on the subject, a fact that encouraged us to initiate the present work. Thereby, the objective of this article is to evaluate the returns to high education in Spain. For this purpose we make use of the Continuous Sample of Working Lives which contains information of the working live of more than 1.2 million people resident in Spain for a given year. The sample provides a large quantity of information related to the individual characteristics of the worker, to the job-contract and the nature of the job, and to the employer's characteristics. The use of this sample implies an advantage against previous work on the subject, given the large sample size and the information availability. The estimation of the returns to high education is done on the basis of the model proposed by Mincer ( 1979), and we apply to different estimation methods: Ordinary Least Squares and quantile regression methods. The analysis is carried out not only for the whole sample of workers, but also we distinguish by sex, firm size and by economic activity. Our results suggest that the wage of workers with high education is approximately a 60% higher than the wage of the rest of workers.