Does adult education at upper secondary level influence annual wage earnings?



An argument brought forward by Borghans and Golsteyn (2005) is that general
knowledge is complementary to other types of skills and has a low level of de-
preciation. It could therefore still be beneficial to the individual, if general
knowledge enhances the ability to take in specific (and faster depreciating)
knowledge during future working life. There is no evidence of such effects.

To sum up so far, the estimated effects of a year of AE credits on annual
wage earnings differ depending on educational level prior to enrolment. Esti-
mates land at almost 15 per cent for males with compulsory school and around
10 per cent for females. For those with a prior two-year upper secondary
schooling, parameter estimates are close to 5 per cent. A prior three-year upper
secondary education is associated with negative effects for males and positive
for females. It is important to stress that the data at hand contains no source of
exogenous variation in AE participation and this is problematic as the decision
to enrol in AE is non-random. In this aspect the present study is similar to ear-
lier studies. The positive effects found in this section are high compared with
Ekstrom (2003) and Albrecht et al. (2004). However, they are below the aver-
age effects reported in Axelsson and Westerlund (2005) on participants in the
AEI, Stenberg and Westerlund (2007) on long-term unemployed in the AEI and
Jacobson et al. (2005), who considered laid-off workers enrolled at community
colleges in the US. The latter study is the only one of these that used the num-
ber of credits attained as a measure of adult schooling. The other studies have
approximated the human capital investment in AE by the number of semesters
registered. The mixed results could well be driven by varying amounts of AE
conducted. The participants in Ekstrom’s sample were registered in AE in 1993
at the latest. Plausibly, the average number of credits was then considerably
lower than a few years later when the financial conditions for studying were
more generous.

32


IFAU - Does adult education at upper secondary level influence annual wage earnings?



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