Returns to Education and Wage Inequality

Returns to Education and Wage Inequality

In general, the aim of the project is to estimate the returns to education and the spread of wages for West - Germany, based on the wage und structural census (GLS) 1990 and 1995.In the first part of the project the object of investigation is to analyse the spread of wages between several groups of employees and the spread within groups. Therefore, the following classifications were made: Group of male employees working full time, group of female employees working full time, group of female employees working part time. Each of these groups is also broken down according to several vocational qualification criteria. These are: no vocational qualification, vocational qualification, university degree. The analysis is based on the GLS data in the years 1990 and 1995. The main results are that gender related spreads in wages increase with rising income but the spreads decrease over time. This holds especially for part time working women without any qualification and such having an university degree. With the improvement of vocational qualification, the earnings and spread of wages also increase, especially for male employees. Among the group of part time working women the spread is higher than for other groups. This spread rose over time. The differences in the wages are not as eminent at the bottom of the distribution, though.In the second part of the project, the pattern of the wages were compared for West Germany for the years of 1990 and 1995, also based on GLS and IABS. Therefore, the analysis rests upon the assumption that there are differences in vocational qualification, gender, status quo of employment, the industrial sector and the age of workers. The research method which was used is quantile regression, which is purely descriptive. Both of the data sources differ in the composition of the sample. There are noticeable differences in the estimated relations of earnings, whereas differences based on gender and on vocational qualification rise with the age of the employees. The second part of the project is still work in progress.

Project members

Frank Reize

Frank Reize

Project Coordinator

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Bernd Fitzenberger

Bernd Fitzenberger

Research Associate

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Cooperation partner
University of Frankfurt, Frankfurt am Main, DE