Good returns

Click to enlarge

People who have completed tertiary education can generally expect to earn more than those who don’t. But governments and societies benefit from these people’s investments as well.

On average across OECD countries, public investment in an individual’s tertiary education is $39,000 higher than that for an individual’s upper secondary or post-secondary education. Yet, in most countries, the public returns from tertiary education are substantially higher than those from upper secondary or post-secondary non-tertiary education, thanks to the higher taxes and social contributions that flow from the higher incomes of those with tertiary qualifications. On average across OECD countries, the public net return from an investment in tertiary education is over $100,000 for a man and over $57,000 for a woman. After direct costs, foregone earnings, and public grants, are taken into account, the public benefits from a man in tertiary education are four times higher than the public costs, and from a tertiary-educated woman, more than two times higher.     

Overall, differences in returns to both the individual and the public sector depend on how equal wages in that country are. The Nordic countries and New Zealand, for example, have small wage differences and consequently lower public returns to higher education. The former have generally offset these lower returns by providing a higher-education system that is almost free of charge and through a generous student-grant system.

See www.oecd.org/education 

© OECD Observer No 295 Q2 2013




Economic Data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter

Twitter feed

Editor's Choice

  • Economic Outlook_video
  • Economic Outlook: The global economy is expected to continue expanding at a moderate pace over the coming two years, but policymakers must ensure that instability in financial markets and underlying fragility in major economies are not allowed to derail growth.Click to watch the video.
  • OECD Forum 2014
    A public event that brings together all sectors of society to share policies and ideas to help shape responses to global challenges.
    Join us on 5-6 May.
  • "There is no shortcut to equipping people with the right skills and to providing them with opportunities to use their skills effectively."

    - Andreas Schleicher, Special Advisor on Education Policy to the Secretary-General, OECD Yearbook 2014

  • Data Lab Image
  • Interactive charts showing aid (ODA) provided by DAC members; by recipient countries and by sector. Click to compare your country.
  • OECD Insights Blog
    OECD Insights Blog by Brian Keeley:
    Results are out for the OECD’s PISA student assessments on “creative problem solving”.
  • Better Life Index
    How do you measure a Better Life?
    On 5 May, the OECD will be launching a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the opinion of the OECD or its member countries.

All rights reserved. OECD 2014