How does education affect labour market outcomes

Abstract

The paper aims to identify and characterize certain relationships that might appear between the access to education and the labour market outcomes. It emphasizes several aspects of education influencing labour market outcomes pointing out which are the main outcomes impacted by education. The analysis is focused on 32 European countries, while data on United States and Japan are also considered. Within this study, the access to education is defined in terms of participation and investments (expenditure on education and research, financial aid to students, funding of education). Labour market outcomes are assessed mainly using different employment/ unemployment rates as well as elements of wages and earnings. The findings show that the higher one's level of education, the better one's chances of getting a job and keeping the status of employed person in times of crisis on labour market. A higher participation in education is not necessarily associated with a higher employment rate, since the entry on the labour market occurs for some individuals as an alternative to continuing their education.