Further education and income dynamics. A longitudinal study considering social selectivity

This longitudinal study analyses the impact of further education on the dynamics of labour earnings. We use longitudinal data from of the German Life History Study which provides detailed information on educational trajectories and occupational careers of men and women of the birth cohorts 1929-31, 1939-41 and 1949-51. Considering social selection, dynamics and time dependency of the chances for participation in further education, the complete selection process of participation in further education is integrated into the multivariate estimates. The effects of further education on incomes is measured in a first step by hazard rates for transition into further educating. The advantages of such an approach is the valid control of further training effects as well as the exact measurement of selection processes, Further education increases men's income significantly if they change jobs within firms. For women, further education is favourable for their incomes if they change employers. In contrast to men, they can realize significant increases in their earnings within the same job via further education. However, the returns from further education has decreased significantly over time for both men and women.