Indicator 17: Education and Relative Earnings
Annual earnings not only reflect the market evaluation of the economic contribution an individual makes to society, but are also a direct link to one's socioeconomic status. Education is one of the most important factors determining earnings levels. By examining the average annual earnings for males and females with various levels of education attainment, Indicator 17 informs us about the relationship between education, sex, and annual earnings levels. To provide relative comparisons, the average annual earnings of 25- to 64-year-olds with various levels of education attainment are expressed as a ratio (multiplied by 100) to the average annual earnings of those for whom upper secondary (roughly equivalent to high school) was the highest level of education. Thus, by definition, the ratio for those with a high school education is 100. Ratios that are below or above 100 reveal average annual earnings that do not reach or that exceed the earnings of those with a high school education. These comparisons do not take into account potential differences between males and females in the total number of years in the labor force.
- In the United States and all other countries reported, average annual earnings increased with education attainment. For instance, in 1992 the average annual earnings of U.S. 25- to 64-year-old males and females with a lower secondary education (roughly equivalent to ninth or tenth grade)* or below were 66 and 65 percent of the earnings of their counterparts with a high school education, respectively. In contrast, the average annual earnings of U.S. 25- to 64-year-old female university graduates were 170 percent of the earnings of female high school graduates; and the average annual earnings of U.S. male university graduates were 164 percent of the earnings of male high school graduates.
- In the United States, the payoff for having a university degree, compared with a high school degree, was in the middle of the range among the countries reported. Having university credentials increased average annual earnings by 64 and 70 percent for U.S. males and females, respectively, compared with the earnings of those with high school credentials. The comparable increases in all the other countries surveyed ranged from 18 percent (New Zealand) to 92 percent (Finland) for males, and 16 percent (Italy) to 106 percent (United Kingdom) for females.
- Women received larger returns than men for a university education in about half the countries reported, including the United States. In some countries, such as Sweden and Switzerland, the returns for women and men were quite similar. In France, Italy, Austria, Denmark, Finland, and Norway, men received larger returns than women for completing a university education.
*For further explanation of education levels, see the sidebar entitled ISCED levels of education.
Table 17: Ratio of mean annual earnings of 25- to 64-year-olds by highest level of education attainment to mean annual earnings at the upper secondary level, by sex and country: 1992
---------------------------------------------------------------------------------------------------------------------------------------------------------
Female Male
------------------------------------------------------------- ---------------------------------------------------------------
Higher
Lower education Higher Lower Higher Higher
secondary (non- education secondary education education
and below university) (university) and below (non-university) (university)
---------------------------------------------------------------------------------------------------------------------------------------------------------
G-7/1
Canada/2 72 116 174 81 107 162
France 81 131 142 87 127 174
Germany 84 114 175 88 116 170
italy2 86 (3) 116 84 /3 134
United Kingdom 70 156 206 80 121 171
United States 65 130 170 66 120 164
Other
Australia/2 90 124 175 88 121 158
Austria 81 (3) 134 85 (3) 146
Belgium 78 137 164 86 115 149
Denmark/2 86 111 135 86 110 146
Finland/2 94 132 176 93 132 192
Netherlands 73 (/3) 147 84 3//3 132
New Zealand 73 98 154 74 85 118
Norway 76 131 157 80 131 165
Portugal/4 67 117 188 65 124 179
Spain/2 71 (/3) 149 78 (3) 138
Sweden 92 119 156 88 118 160
Switzerland/2 67 126 152 76 127 152
----------------------------------------------------------------------------------------------------------------------------------------------------------
1/ No data available for Japan. 2/ 1991 data. 3/ Data included in another category. 4/ 1993 data.
NOTE: Table values represent the ratio multiplied by 100. See supplemental note to Indicator 17 for details on indicator calculation for Austria, Belgium, Portugal, and Switzerland.
SOURCE: Organization for Economic Co-operation and Development, Center for Educational Research and Innovation, International Indicators Project, 1995.
Figure 17: Ratio of mean annual earnings of 25- to 64-year-olds by highest level of education attainment to mean annual earnings at the upper secondary level, by sex and selected country:/1 1992
1/ Countries are sorted in descending order by the ratio of mean annual
earnings of female university graduates to females for whom high school is the
highest level of education attained.
2/ 1991 data.
NOTE: A value of 100 indicates mean annual earnings equal to that of individuals for whom high school is the highest level of education attained whereas a value less than 100 reveals that mean annual earnings at a given education level are less than that of individuals for whom high school is the highest level of education attained.
SOURCE: Organization for Economic Co-operation and Development, Center for Educational Research and Innovation, International Indicators Project, 1995.
See Supplemental Notes on Figure and Tables.
[Indicator 16]
[Indicator 18]