Open access
Date
2024-07Type
- Working Paper
ETH Bibliography
yes
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Abstract
This paper proposes a model of returns to education based on the permeability of the education system. We define permeability as the availability of different program types up to the highest education levels and the ability to transition between programs (Caves et al., 2023). We develop six ideal-types that reflect variation in the availability of programs and transitions. Building on Heckman et al. (2006)’s work on returns to education by skill type, we formulatry te a model of returns to education in each type based on skill types and schooling type. We then specify this model for each permeability type. We use Monte Carlo simulations to demonstrate how the model performs for each permeability type as we progressively relax assumptions. We find that education system permeability is necessary but not sufficient for maximizing individual returns to education. Population skills are also higher in higher-permeability systems. We further find that high overall ability cannot compensate for the “wrong” skill type in a low-permeability system. After considering the literature, we show that permeability is also necessary for the accurate comparison of program types and that permeability increases the attractiveness of non-dominant programs by increasing further education opportunities. Program quality is crucial since permeability does not yield effects on its own, but high-quality programs cannot overcome the limitations of a low-permeability system. Show more
Permanent link
https://doi.org/10.3929/ethz-b-000684870Publication status
publishedJournal / series
CES Working Paper SeriesVolume
Publisher
ETH Zurich, Chair of Education SystemsSubject
Returns to education; Permeability; Education System; SkillsOrganisational unit
09704 - Renold, Ursula / Renold, Ursula
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Is new version of: https://doi.org/10.3929/ethz-b-000657028
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ETH Bibliography
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