The marginal returns on tertiary education are lower in Denmark than many countries in the Organization for Economic Co-operation and Development (OECD), according to their latest education report.
A man with a tertiary (university) education can expect a net gain of between USD 52,000 and USD 74,000 over his working life here, a woman from USD 32,000 to USD 47, 000.
These figures are low compared to the United States, where an investment in tertiary education generates a net gain of over USD 300,000 and thus provides a strong incentive to finish a degree.
Risk that the best leave
There are trade-offs between taxes and the direct costs of education (tuition fees) that are linked to government support for higher education. In countries with low or no tuition fees, individuals typically pay back public subsidies later in life through progressive tax systems.
»As younger generations become more mobile, a reward structure that does not adequately compensate more highly educated individuals could eventually lead to a loss of these individuals to countries with higher earnings potentials,« reads the report, which is called Education at a Glance, 2012.
See the report here
Minister: Danish system gives results
During times of economic gloom, the well educated have higher chances of keeping their jobs. In Denmark, the employment rate among the highly educated is 86 percent while it is 63 percent for people with a primary education and 79 percent for people with a secondary education. The OECD average is 83 percent.
»The increase in revenue that comes with a higher level of education also contributes to growth and prosperity of the country,« according to the report. Denmark is one of the OECD countries where public spending in education is the highest.
Education Minister Morten Østergaard puts a positive spin on this in a Ministry press release: »It clearly shows that Denmark's massive investment in education gives results that are essential for Denmark's growth and prosperity«, he says.
Danish parents’ level of education doesn’t matter
In Denmark, Danes may well make it to the league of the most educated even if they come from a low educated family.
»Young people (25-34 year-old non-students) from families with low levels of education enjoy the greatest educational opportunities in Australia, Canada, Denmark, Finland, France, Iceland,Ireland, the Netherlands, Spain and Sweden,« according to the report.
This is explained by the very high public investment in education, which lowers the advantage of having highly educated parents. Only Denmark and the other Nordic countries have a model with free access to higher education combined with generous education subsidies. In Denmark education assistance for students accounts for 0.65 percent of GDP, compared to an OECD average of 0.29 percent.
See the report here
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