Structure of schooling systems and earnings differentials: insight into Western Europe
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The paper deals with the effects of formal education on workers’ earnings comparatively for Germany, Italy and the United Kingdom, three countries of Western Europe with three alternative combinations of stratification/standardisation processes and vocational specificity in their education systems. The aim is to evaluate cross-country differences in returns on education along the conditional earnings distributions as well as their role in affecting the between-levels and within-levels inequality in light of institutional variety in the design of national education systems. Drawing upon 2005 EU-SILC data, a series of two-stage probit models with quantile regression (QR) in the second stage allows estimating Mincerian equations with sample selection by employment status (employees vs self-employed) and gender. In short, a clear contrast in terms of differentials in returns on education exists in favour of the highly stratified and more vocationally oriented system of Germany even though the gaps with Italy and the United Kingdom vary along the conditional earnings distributions.
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