The return to higher education: evidence from Romania

TL;DR

This study estimates the rate of return to higher education in Romania across different degrees and fields, finding it higher than in most EU countries, with medicine offering the highest returns.

Contribution

It provides a detailed analysis of the rate of return to higher education in Romania using the Mincer equation, considering various socio-demographic factors and fields of study.

Findings

Higher return rates to higher education in Romania compared to most EU countries.

Medicine field yields the highest rate of return among studied disciplines.

Returns vary significantly across different educational levels and fields.

Abstract

Education is one of the most important components of the human capital, and an important determinant of the personal income. Estimating the rate of return to education is a main topic of economic research. In this paper we analyzed the rate of return to higher education in Romania using the well-known Mincer equation. Besides the educational level and the number of years of experience on the labor market we also used a series of socio-demographic variables such as gender, civil status, the area of residence. We were interested mainly in calculating the rate of return to higher education, therefore we computed this rate for bachelor, master and doctoral degrees separately. We also investigated the rate of return to higher education on technical, science, economics, law, medicine, and arts fields. Our results showed that the rate of return to higher education has a greater value than most of the developed countries of EU and the field of higher education that brings the highest rate of return is medicine