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Risk-Return Trade-Offs to Complete Educational Paths: Vocational, Academic and Mixed

Author

Listed:
  • Simone Tuor

    (Department of Business Administration, University of Zurich)

  • Uschi Backes-Gellner

    (Department of Business Administration, University of Zurich)

Abstract
This paper investigates the rates of return and the risks of different types of educational paths after compulsory education. We distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. To study the labor market outcome we compare earnings and calculate net return rates as well as risk measures to investigate whether different educational paths are characterized by different risk-return trade-offs. We use Lazear's jack-of-all-trades theory on entrepreneurship to derive testable predictions about the labour market outcome of different combinations of education for entrepreneurs and employees. Our empirical results are based on the Swiss Labor Force Survey (SLFS) and demonstrate that mixed educational paths are well rewarded in the labor market. However, a high return is also associated with a high income variance which is driven by those who end up as entrepreneurs.

Suggested Citation

  • Simone Tuor & Uschi Backes-Gellner, 2008. "Risk-Return Trade-Offs to Complete Educational Paths: Vocational, Academic and Mixed," Economics of Education Working Paper Series 0031, University of Zurich, Department of Business Administration (IBW).
    • Handle: RePEc:iso:educat:0031
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    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0031_lhwpaper.pdf
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    Citations

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    Cited by:

    1. Regula Geel & Uschi Backes-Gellner, 2010. "Earning While Learning: Labor Market Returns to Student Employment During Tertiary Education," Economics of Education Working Paper Series 0049, University of Zurich, Department of Business Administration (IBW).
    2. Polona Domadenik & Dasa Farcnik, 2011. "Did Bologna reform improve school-to-work transition of graduates? Evidence from Slovenia," Investigaciones de Economía de la Educación volume 6, in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 40, pages 649-665, Asociación de Economía de la Educación.
    3. Uschi Backes-Gellner & Johannes Mure, 2008. "The Swiss Leading House on Economics of Education, Firm Behaviour and Training Policies," Economics of Education Working Paper Series 0014, University of Zurich, Department of Business Administration (IBW).

    More about this item

    Keywords

    risk-return trade-off; complete educational paths; occupational choice;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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